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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





LOGO

FORM 10-K

(Mark One)



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

For the fiscal year ended January 31, 2009

OR



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

For the transition period from                      to

Commission
file number 1-12557





CASCADE CORPORATION

(Exact name of
registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Oregon                                                         |  | 93-0136592                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

2201 N.E. 201st Ave. Fairview, Oregon 97024-9718

(Address of principal executive office) (Zip Code)

Registrants telephone number, including area code: 503-669-6300

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

Common Stock, par value $.50 per share

Name of exchange on which registered: New York Stock Exchange

Securities registered
pursuant to Section 12(g) of the Act: None





Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes   ̈    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes   ̈    No  x

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 the 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.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                      |  |                                               |  |                             
|-------------------------- |  | -------------------- |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer  x |  | Non-accelerated filer   ̈                      |  | Smaller reporting company   ̈
|                           |  |                      |  | (Do not check if a smaller reporting company) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act).  Yes   ̈    No  x

The aggregate market value of common stock held by non-affiliates of the registrant as of July 31, 2008 was $476,209,016, based on the closing sale price of the common stock on the New York Stock Exchange on that date.

The number of shares outstanding of the registrants common stock as of March 11, 2009 was 10,852,530.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement to be filed within 120 days after the registrants fiscal year end of January 31, 2009, to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held
June 2, 2009 are incorporated by reference into Part III.









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TABLE OF
CONTENTS



|           |  |          |  |                                                                                                              |  |   
|---------- |  | -------- |  | ------------------------------------------------------------------------------------------------------------ |  | --
|PART I     |  | 4       
|           |  | Item 1.  |  | Business                                                                                                     |  | 4 
|           |  |          |  | General                                                                                                      |  | 4 
|           |  |          |  | Products                                                                                                     |  | 4 
|           |  |          |  | Markets                                                                                                      |  | 4 
|           |  |          |  | Competition                                                                                                  |  | 5 
|           |  |          |  | Customers                                                                                                    |  | 6 
|           |  |          |  | Backlog                                                                                                      |  | 6 
|           |  |          |  | Research and Development                                                                                     |  | 6 
|           |  |          |  | Environmental Matters                                                                                        |  | 6 
|           |  |          |  | Employees                                                                                                    |  | 6 
|           |  |          |  | Construction Attachments                                                                                     |  | 6 
|           |  |          |  | Foreign Operations                                                                                           |  | 6 
|           |  |          |  | Available Information                                                                                        |  | 7 
|           |  | Item 1A. |  | Risk Factors                                                                                                 |  | 7 
|           |  | Item 1B. |  | Unresolved Staff Comments                                                                                    |  | 11
|           |  | Item 2.  |  | Properties                                                                                                   |  | 12
|           |  | Item 3.  |  | Legal Proceedings                                                                                            |  | 12
|           |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                          |  | 12
|           |  |          |  | Officers of the Registrant                                                                                   |  | 13
|PART II    |  | 14      
|           |  | Item 5.  |  | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |  | 14
|           |  | Item 6.  |  | Selected Financial Data                                                                                      |  | 16
|           |  | Item 7.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 17
|           |  | Item 7A. |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 37
|           |  | Item 8.  |  | Financial Statements and Supplementary Data                                                                  |  | 39
|           |  | Item 9.  |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                         |  | 72
|           |  | Item 9A. |  | Controls and Procedures                                                                                      |  | 72
|           |  | Item 9B. |  | Other Information                                                                                            |  | 72
|PART III   |  | 73      
|           |  | Item 10. |  | Directors, Executive Officers and Corporate Governance                                                       |  | 73
|           |  | Item 11. |  | Executive Compensation                                                                                       |  | 73
|           |  | Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |  | 73
|           |  | Item 13. |  | Certain Relationships and Related Transactions, and Director Independence                                    |  | 74
|           |  | Item 14. |  | Principal Accounting Fees and Services                                                                       |  | 74
|PART IV    |  | 75      
|           |  | Item 15. |  | Exhibits and Financial Statement Schedules                                                                   |  | 75
|SIGNATURES |  | 77      

NOTE: All references to fiscal years are defined as year ended January 31, 2009 (fiscal
2009), year ended January 31, 2008 (fiscal 2008) and year ended January 31, 2007 (fiscal 2007).



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Forward-looking Statements

This Annual Report on Form 10-K, including Managements Discussion and Analysis of Financial Condition and Results of
Operations (Item 7) contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or
implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of revenue, gross profit, expenses, earnings or losses from
operations, synergies or other financial items; any statements of plans, strategies, and objectives of management for future operations; any statements regarding future economic conditions or performance; any statements of expectation or belief; and
any statements of assumptions underlying any of the foregoing. The risks, uncertainties, and assumptions referred to above include, but are not limited to:



| |  |  | Competitive factors and the cyclical nature of the materials handling industry and lift truck orders;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | General business and economic conditions globally, in particular North America, Europe, Asia Pacific and China;
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | Effectiveness of our cost reduction initiatives and reorganization plans;
| | - |  | -------------------------------------------------------------------------



| |  |  | Ability to comply with debt covenants;
| | - |  | --------------------------------------



| |  |  | Foreign currency fluctuations;
| | - |  | ------------------------------



| |  |  | Cost and availability of raw materials;
| | - |  | ---------------------------------------



| |  |  | Risks associated with international operations;
| | - |  | -----------------------------------------------



| |  |  | Levels of construction activity;
| | - |  | --------------------------------



| |  |  | Environmental matters;
| | - |  | ----------------------



| |  |  | Assumptions relating to pension and other postretirement costs;
| | - |  | ---------------------------------------------------------------



| |  |  | Fluctuations in interest rates;
| | - |  | -------------------------------



| |  |  | Impact of acquisitions.
| | - |  | -----------------------

We undertake
no obligation to publicly revise or update forward-looking statements to reflect events or circumstances that arise after the date of this report. See Risk Factors (Item 1A) for additional information on risk factors with the potential
to impact our business.



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PART I



|Item 1. | Business
|------- | --------

General

Cascade Corporation (Cascade) was organized in 1943 under the laws of the state of Oregon. The terms Cascade, we, and
our include Cascade Corporation and its subsidiaries. Our headquarters are located in Fairview, Oregon, a suburb of Portland, Oregon. We are one of the worlds leading manufacturers of materials handling load engagement devices and
related replacement parts, primarily for the lift truck industry and to a lesser extent the construction industry. We also manufacture construction attachments for the construction industry.

Products

We manufacture an
extensive range of materials handling load engagement products that are widely used on lift trucks and, to a lesser extent, on construction and agricultural vehicles.

Our products are primarily manufactured and distributed under the Cascade name and symbol, for which we have secured trademark protection. The primary function of lift truck related products is to provide the lift
truck with the capability of engaging, lifting, repositioning, carrying and depositing various types of loads and products. We offer a wide variety of functionally different products, each of which has numerous sizes, models, capacities and optional
combinations. Lift truck related products are designed to handle loads with pallets and for specialized application loads without pallets. Examples of specialized products include devices specifically designed to handle loads such as appliances,
carpet and paper rolls, baled materials, textiles, beverage containers, drums, canned goods, bricks, masonry blocks, lumber, plywood, and boxed, packaged and containerized products. Certain construction related products allow vehicles such as
loaders, backhoes and rough terrain lift trucks to move materials in much the same manner as conventional lift trucks. Our other construction related products are used on excavators and loaders for both conventional and specialized ground engagement
applications.

Our products are subject to strict design, construction and safety requirements established by industry associations and the
International Organization for Standardization (ISO). Our major manufacturing facilities are ISO certified. Product specifications and characteristics are determined by the expected capacity to be lifted, the characteristics of the load, the
environment in which employed, the terrain over which the load will be moved and the operational life cycle of the vehicle. Accordingly, while there are some standard products, the market demands a wide range of products in custom configurations and
capacities.

The manufacturing of our products includes the purchase of raw materials and components: principally rolled bar, plate and
extruded steel products; unfinished castings and forgings; hydraulic cylinders and motors; and hardware items such as fasteners, rollers, hydraulic seals and hose assemblies. Certain purchased parts are provided worldwide by a limited number of
suppliers. Difficulties in obtaining alternative sources of rolled bar, plate and extruded steel products and other materials from a limited number of suppliers could affect operating results. We are not currently experiencing any shortages in
obtaining raw materials, purchased parts, or other steel products.

Markets

We market our products throughout the world. Our primary customers are companies and industries that use lift trucks for materials handling. Examples of
these industries include pulp and paper, grocery products, textiles, recycling and general consumer goods. Our products are sold to the end-user customer through the retail lift truck dealer distribution channel and to lift truck manufacturers as
original equipment manufacturer (OEM) equipment.

In major industrialized countries, lift trucks are a widely utilized method of materials
handling. In these markets lift trucks are generally considered maintenance capital investment. This tends to subject the industry in general to the cyclical patterns similar to the broader capital goods economic sector.



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However, many of our
products measurably improve overall materials handling and lift truck productivity. Further, we are continually developing products to serve new types of materials handling applications to meet specific customer and industry requirements. In this
sense, our products may also be generally considered a productivity enhancing investment. Historically, this has somewhat cushioned the negative impact of downward trends in the lift truck market on our net sales.

In emerging industrialized countries, China in particular, lift trucks are replacing manual labor and other less productive methods of materials handling.
As such, lift trucks are generally considered productivity enhancing investments in these markets. We believe this makes the lift truck markets in these countries generally less susceptible to downward trends in overall capital goods spending.

See Recent Trends and Developments Affecting Our Results in Managements Discussion and Analysis of Financial
Condition and Results of Operations (Item 7) for further discussion on how the economic recession, which accelerated in the fourth quarter of fiscal 2009, is affecting the markets we serve.

Competition

We are one of
the leading global independent suppliers of load engagement products for industrial lift trucks. We compete with a number of companies in different parts of the world. Our primary competitor is Bolzoni Auramo, an Italian public company. Most of our
remaining competitors are privately-owned companies with a strong presence in local and regional markets. A smaller number of these competitors compete with us globally.

In addition, several lift truck manufacturers, who are customers of ours, are also competitors in varying degrees to the extent they manufacture a portion of their load engagement product requirements. Since we offer
a broad line of products capable of supplying a significant part of the total requirements for the entire lift truck industry, our experience has shown that lower costs resulting from our relatively high unit volume would be difficult for any
individual lift truck manufacturer to achieve for most products. We design and position our products to be the performance and service leaders in their respective product categories and geographic markets.

Our market share and gross profit throughout the world vary by geographic region due to the different competitive environments we face in each of these
regions. Fluctuations in gross profit within a geographic region over time are generally due to a change in the competitive environment, such as new competitors entering a market or existing entities merging or otherwise leaving the market.
Additionally, cyclical variations in product demand directly affect margins as higher manufacturing volumes generally result in greater fixed cost absorption and increased gross profit.

A further discussion of the competition in each geographic region follows:

North AmericaWe are the leading manufacturer in North America and the preferred supplier of many OEMs as well as OEDs (original equipment dealers) and distributors. We compete in this region
primarily with smaller regionally-based companies and a limited number of smaller foreign competitors. Our leading position is the result of our continued focus on providing high quality products and outstanding customer service.

EuropeWhile we are also a leading manufacturer in Europe, we compete with Bolzoni Auramo and several privately-owned companies with a strong
presence in local and regional markets. Competition in this region is based principally on price, resulting in lower gross profit.

Asia
PacificThis region includes operations in Japan, Australia, New Zealand, Korea and South Africa. The competitive environment varies somewhat from country to country, and competitors vary in size from smaller regionally-based private
companies to some larger lift truck manufacturers. In general, we believe we have established a strong presence in all markets throughout the region.

ChinaWe have operated in China for over 20 years and have established a strong presence in the lift truck market. As a result of the continued growth in Chinas economy and the expanded use of lift
trucks for various industrial purposes, we are seeing an increase in the number of competitors in the Chinese market, including European based manufacturers.



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Customers

Our products are marketed and sold primarily to lift truck OEDs, OEMs and distributors globally. Our primary markets are North America,
Europe, China and Asia Pacific. In addition to sales to the lift truck market, we do sell products to OEMs who manufacture construction, mining, agricultural and industrial vehicles other than lift trucks.

No single customer accounts for more than 10% of our consolidated net sales. Our sales to OEM customers account for approximately 45% of our consolidated
net sales.

Backlog

Our products are manufactured with short lead times of generally less than one month. Accordingly, the level of backlog orders is not a significant factor in evaluating our overall level of business activity.

Research and Development

The
majority of our research and development activities are performed at our corporate headquarters in Fairview, Oregon and at our manufacturing facility in Guelph, Ontario, Canada. Our engineering staff develops and designs substantially all of the
products we sell and is continually involved in developing products for new applications. We generally do not consider patents to be important to our business.

Environmental Matters

From time to time, we are the subject of investigations, conferences,
discussions and negotiations with various federal, state, local and foreign agencies with respect to cleanup of hazardous waste and compliance with environmental laws and regulations. Risk Factors (Item 1A), Notes to Consolidated
Financial Statements (Item 8), Legal Proceedings (Item 3) and Managements Discussion and Analysis of Financial Condition and Results of Operations (Item 7) contain additional information concerning our
environmental matters.

Employees

At March 31, 2009, we had approximately 2,000 full-time employees throughout the world. The majority of these employees are not subject to collective bargaining agreements. We believe our relations with our
employees are excellent.

Construction Attachments

We manufacture attachments for construction vehicles at two facilities on the West coast of the United States. The construction attachments are for medium
and heavy duty construction vehicles used in a variety of construction markets, including infrastructure, demolition, recycling, forestry, utility and general construction. The prevailing levels of commercial, infrastructure and general construction
activity have a significant influence on sales of these products. Housing construction has some overall influence. These products are sold through construction equipment dealers and major equipment manufacturers throughout the western United States.
We have approximately 40 employees working to design, manufacture and market these products.

Foreign Operations

We have substantial operations outside the United States. There are additional business risks attendant to our foreign operations,
including the risk that the relative value of the underlying local currencies may weaken when compared to the U.S. dollar. For further information about foreign operations, see Risk Factors (Item 1A), Managements Discussion
and Analysis of Financial Condition and Results of Operations (Item 7) and Notes to Consolidated Financial Statements (Item 8).



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Available
Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on or through our website at www.cascorp.com when such reports are available on
the Securities and Exchange Commission (SEC) websitewww.sec.gov. Once filed with the SEC, such documents may be read and/or copied at the SECs Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the
operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.



|Item 1A. | Risk Factors
|-------- | ------------

In addition to the other information
contained in this Form 10-K, the following are certain risks that we believe should be considered carefully in evaluating Cascades business. Our business, financial condition, cash flows or results of operations could be materially adversely
affected by any of these risks. The risks summarized below do not represent an exhaustive list, and additional risks not presently known to us or that the we currently consider immaterial may also impair our business and operations.

Economic or industry downturns

Our business has
historically experienced periodic cyclical downturns generally consistent with economic cycles in the markets in which we operate. The level of sales of our products reflects to a significant extent the capital investment decisions of the customers
who buy our products and the lift trucks and other vehicles on which our products are used. These customers have had a tendency to delay capital projects, including the purchase of new equipment or upgrades, during industry or general economic
downturns. Past downturns have been characterized by diminished product demand, excess manufacturing capacity and erosion of gross profit and net income. Therefore, a significant downturn in the markets of our customers, including lift truck
manufacturers and to a lesser extent construction equipment manufacturers, or in general economic conditions, such as the current global economic recession, will result in a reduction in demand for our products and negatively affect our business.

Fluctuations in raw material costs and availability

To manufacture our products we purchase a variety of raw materials and components. These consist principally of rolled bar, plate and extruded specialty steel products, unfinished castings and forgings, hydraulic
cylinders and motors and various hardware items. The price of steel is particularly significant to our manufacturing costs since most of our products are manufactured using specialty steel as a primary raw material and specialty steel based
components as purchased parts. As a result, we are exposed to increases in the market prices of raw materials and components. We may not be able to mitigate these increases by changing the selling prices of our products or
through other means.

Significant cost decreases in raw materials and components could result in pressure from customers to lower our sales
prices. Due to large quantities of raw material on hand at the end of the year, these lower sales prices could result in a write down of inventory costs to market value.

We may also experience shortages of raw materials and purchased parts, which in certain cases are provided by a limited number of suppliers. Shortages may require us to curtail production or to devote additional
financial resources to maintaining inventories of raw materials and purchased parts in excess of our normal requirements.

Credit and Equity Markets

Our results of operations are materially affected by the conditions in the global economy. The current global financial crisis has
caused extreme volatility and disruptions in the capital and credit markets, principally in the U.S. and Europe. These conditions have decreased availability of liquidity and credit capacity for certain issuers and customers.



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Although we generally
generate funds from our operations to pay our operating expenses, fund our capital expenditures, pay dividends and fund our employee retirement benefit programs, our ability to continue to meet these cash requirements over the long-term will require
substantial liquidity and access to sources of funds, including capital and credit markets. Changes in global economic conditions, including material cost increases and decreases in economic activity in many of the markets that we serve, and our
success in managing cost increases, inventory and other important elements of our business may significantly impact our ability to generate funds from operations. Continuing market volatility, the impact of government intervention in financial
markets and general economic conditions may also adversely impact our ability to access capital and credit markets to fund operating needs.

Our line of credit agreement requires us to achieve certain financial and operating results and maintain compliance with specified financial ratios as outlined in Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations, Financial Condition and Liquidity. Our ability to comply with these provisions will be affected by the depth and duration of the current recession. Failure to comply with the terms of our line of credit
agreement could result in a default allowing our lenders to declare all borrowings under the line of credit to be immediately due and payable. This would require us to obtain additional financing or renegotiate the terms of our line of credit
agreement. The terms under which we could obtain new or revised financing would likely be less favorable and require higher interest rates, significant fees and tighter restrictions and covenants.

Impact of acquisitions

We have historically expanded
our business through acquisitions and expect we will do so in the future if appropriate opportunities arise. If we are not successful in integrating acquisitions, we may not realize the operating results we anticipated at the time of acquisition. In
addition, industry downturns in the markets the acquired companies serve and general economic conditions may adversely affect our financial results. Future acquisitions may require us to incur additional debt and contingent liabilities, which may
materially and adversely affect our business, operating results, cash flows and financial condition. The acquisition and integration of businesses involve a number of risks, including:



| |  |  | Doing business in industries outside the lift truck material handling business;
| | - |  | -------------------------------------------------------------------------------



| |  |  | Difficulties in matching the business culture of the acquired business with our culture;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | Difficulties in the assimilation and retention of employees;
| | - |  | ------------------------------------------------------------



| |  |  | Difficulties in retaining customers and integrating customer bases;
| | - |  | -------------------------------------------------------------------



| |  |  | Diversion of managements attention from existing operations due to the integration of acquired businesses;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | Difficulties in integrating operations and systems; and
| | - |  | -------------------------------------------------------



| |  |  | Assumption of unexpected liabilities.
| | - |  | -------------------------------------

Due to the decreased availability of, and the related high cost in accessing, liquidity and credit in this current volatile credit and capital market, we may, in a bid to conserve cash for operations, undertake acquisitions that would be
financed in part through public offerings or private placements of debt or equity securities, or other arrangements. Such acquisition financing could result in a decrease of our ratio of earnings to fixed charges and adversely affect other leverage
measures. We cannot guarantee any such acquisition financing would be available to us on acceptable terms if and when required. If we were to undertake an acquisition by issuing equity securities, the issued securities may have a dilutive effect on
the interests of the holders of our common shares.

Economic, political and other risks associated with international operations

Foreign operations represent a significant portion of our business. We expect revenue from foreign markets to continue to represent a significant portion
of our total sales. As noted in Properties (Item 2), we own or lease



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facilities in several foreign countries throughout the world. Since we manufacture and sell our products worldwide, our business is subject to risks
associated with doing business internationally. Accordingly, our future results could be harmed by a variety of factors, including:



| |  |  | Foreign currency exchange risks;
| | - |  | --------------------------------



| |  |  | Imposition of foreign exchange controls;
| | - |  | ----------------------------------------



| |  |  | Changes in a specific countrys or regions political or economic conditions, particularly in emerging markets such as China;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | Seizure of our property or assets by a foreign government;
| | - |  | ----------------------------------------------------------



| |  |  | Tariffs, quotas, other trade protection measures and import or export licensing requirements;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | Potentially negative consequences from changes in tax laws;
| | - |  | -----------------------------------------------------------



| |  |  | Difficulty in staffing and managing global operations;
| | - |  | ------------------------------------------------------



| |  |  | Differing labor regulations;
| | - |  | ----------------------------



| |  |  | Requirements relating to withholding taxes on remittances and other payments by subsidiaries;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | Restrictions on our ability to own or operate or repatriate profits from our subsidiaries, make investments or acquire new businesses in foreign jurisdictions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Civil unrest or war in any of the countries in which we operate;
| | - |  | ----------------------------------------------------------------



| |  |  | Unexpected transportation delays or interruptions;
| | - |  | --------------------------------------------------



| |  |  | Difficulty in enforcement of contractual obligations governed by non-U.S. law and complying with multiple and potentially conflicting laws; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Unexpected changes in regulatory requirements.
| | - |  | ----------------------------------------------

Foreign currency fluctuations

Changes in economic or political conditions globally and in any of the countries in which we
operate could result in exchange rate movements, new currency or exchange controls or other restrictions being imposed on our operations.

Because our combined financial results are reported in U.S. dollars, translation of sales or earnings generated in other currencies into U.S. dollars can result in a significant increase or decrease in the amount of those sales or
earnings. In addition, our debt service requirements are primarily in U.S. dollars, even though a portion of our cash flow is generated in foreign currencies. Significant changes in the value of these foreign currencies relative to the
U.S. dollar could have a material adverse effect on our financial condition and our ability to meet interest and principal payments on U.S. dollar-denominated debt.

Fluctuations in currencies relative to currencies in which our earnings are generated make it more difficult to perform period-to-period comparisons of
our reported results of operations. For purposes of accounting, the assets and liabilities of our foreign operations, where the local currency is the functional currency, are translated using period-end exchange rates, and the revenues, expenses and
cash flows of our foreign operations are translated using average exchange rates during each period.

In addition to currency translation
risks, we incur currency transaction risk whenever we enter into either a purchase or a sales transaction using a currency other than the local currency of the transacting entity. Given the volatility of exchange rates, we cannot be assured we will
be able to effectively manage our currency transaction and/or translation risks. We have purchased and may continue to purchase foreign currency hedging instruments protecting or offsetting positions in certain currencies to reduce the risk of
adverse currency fluctuations. We only purchase these instruments to cover actual currency exposures. We have in the past experienced and expect to experience at times in the future an impact on earnings as a result of foreign currency exchange rate
fluctuations.



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Original equipment manufacturers sourcing
practices

We sell approximately 45% of our products directly to OEMs, several of which are global manufacturers. The following actions
taken by these OEMs could significantly affect our business:



| |  |  | Shifting from local or regional sourcing of products to lower cost global sourcing.
| | - |  | -----------------------------------------------------------------------------------



| |  |  | Altering the distribution channels of certain products by acquiring all or part of their dealer network or by exerting influence over their sale of replacement
parts and attachments through their distribution channels.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Adjusting their inventories of finished products as part of ongoing operations.
| | - |  | -------------------------------------------------------------------------------



| |  |  | Manufacturing their own attachments.
| | - |  | ------------------------------------

Competition

Our products do not depend upon proprietary technology to any significant degree, and therefore can be subject to intense competition.
Competitive characteristics of our products include overall performance, ease of use, quality, safety, customer service and support, manufacturing lead times, global reach, brand reputation, breadth of product line and price. Our customers
increasingly demand more technologically advanced and integrated products in certain cases and we must continue to develop our expertise and technical capabilities in order to manufacture and market these products successfully. To retain our
competitive position, we will need to invest continuously in research and development and improve our manufacturing, marketing, customer service and support and our distribution networks.

Loss of senior management

The success of our
business is dependent on our ability to attract and retain qualified personnel. Several members of our senior management team have been with us for over 20 years, including our President and Chief Operating Officer, who have each been with us for
over 35 years. We may lose the services of key management personnel or fail to attract and develop additional personnel who may be required.

Reliance on customers

Approximately 55% of our products are sold to the end-user customer through OEDs. Therefore, a
significant portion of our sales is dependent on the quality and effectiveness of these dealers, who are not subject to our control. In addition, under current economic conditions customers may experience difficulty in obtaining credit to fund
purchases of our products.

Environmental compliance costs and liabilities

Our operations and properties are subject to stringent U.S. and foreign, federal, state and local laws and regulations relating to environmental
protection. These laws and regulations govern the investigation and cleanup of contaminated properties as well as air emissions, water discharges, waste management and disposal and workplace health and safety. We can be held responsible under these
laws and regulations no matter if the original actions were legal or illegal and no matter if we knew of, or were responsible for, the presence of such hazardous or toxic substances. We could be responsible for payment of the full amount of any
liability, whether or not any other responsible party also is liable.

These laws and regulations affect a significant percentage of our
operations, are different in every jurisdiction and can impose substantial fines and sanctions for violations. Further, they may require substantial clean-up costs for our properties, many of which are sites of long-standing manufacturing
operations, and the installation of costly pollution control equipment or operational changes to limit pollution emissions and/or decrease the likelihood of accidental hazardous substance releases. We must conform our operations and properties to
these laws and adapt to regulatory requirements in all jurisdictions as these requirements change.



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We routinely deal with
natural gas, oil and other petroleum products. As a result of our operations, we generate, manage and dispose of or recycle hazardous wastes and substances such as solvents, thinner, waste paint, waste oil, wash-down wastes and sandblast material.
Hydrocarbons or other hazardous substances or wastes may have been disposed or released on, under or from properties owned, leased or operated by us or on, under or from other locations where such substances or wastes have been taken for disposal.
These properties may be subject to investigatory, clean-up and monitoring requirements under U.S. and foreign, federal, state and local environmental laws and regulations.

We released all rights we might have under insurance policies issued by insurance providers. In prior years, we entered into settlement agreements with these providers with respect to litigation to recover various
expenses incurred in connection with environmental and related proceedings.

Underfunded benefit plans

Our obligations under our postretirement benefit plan and certain foreign subsidiaries defined benefit pension plans are currently
underfunded. At some time in the future we may have to make significant cash payments to fund these plans, which would reduce the cash available for our business.

As of January 31, 2009, our projected benefit obligations under our defined benefit pension plans exceed the fair value of assets by $1 million. As of January 31, 2009 our accumulated postretirement benefit
obligation under our postretirement benefit plan, which is not funded, was $7.1 million. The underfunding in our defined benefit pension plans is due in part to fluctuations in the financial markets that caused the valuation of the assets to
decrease. We expect any required cash payments to our plans that are not fully funded will be made from future cash flows from operations. If our cash contributions are insufficient to adequately fund the plans to cover our future obligations, the
performance of the pension plan assets do not meet our expectations or assumptions are modified, our contributions could be materially higher than we expect. This would reduce the cash available for our business. Changes in U.S. or foreign laws
governing these plans could require us to make additional contributions and changes to generally accepted accounting principles in the United States could require the recording of additional costs related to these plans.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

None.



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

We own and lease various types of
properties located throughout the world. Our executive offices are located in Fairview, Oregon. We generally consider the productive capacity of our manufacturing facilities to be adequate and suitable to meet our requirements. Our primary locations
are presented below:



|                                |  |                                     |  |                          |  |       
|------------------------------- |  | ----------------------------------- |  | ------------------------ |  | ------
|Location                        |  | Primary Activity                    |  | ApproximateSquareFootage |  | Status
|NORTH AMERICA                   |  |                                     |  |                          |  |       
|Springfield, Ohio               |  | Manufacturing                       |  | 200,000                  |  | Owned 
|Fairview, Oregon                |  | Manufacturing/Headquarters          |  | 155,000                  |  | Owned 
|Guelph, Ontario Canada          |  | Manufacturing                       |  | 125,000                  |  | Owned 
|Toronto, Ontario Canada         |  | Manufacturing                       |  | 73,000                   |  | Leased
|Woodinville, Washington         |  | Manufacturing                       |  | 68,000                   |  | Leased
|Warner Robins, Georgia          |  | Manufacturing                       |  | 65,000                   |  | Owned 
|Findlay, Ohio                   |  | Manufacturing                       |  | 52,000                   |  | Owned 
|San Juan Capistrano, California |  | Manufacturing                       |  | 9,000                    |  | Leased
|EUROPE                          |  |                                     |  |                          |  |       
|Almere, The Netherlands         |  | Manufacturing/European Headquarters |  | 162,000                  |  | Owned 
|Schalksmuhle, Germany           |  | Manufacturing                       |  | 81,000                   |  | Owned 
|Verona, Italy                   |  | Manufacturing                       |  | 74,000                   |  | Leased
|Manchester, England             |  | Manufacturing                       |  | 44,000                   |  | Owned 
|La Machine, France              |  | Manufacturing                       |  | 37,000                   |  | Owned 
|Brescia, Italy                  |  | Manufacturing                       |  | 19,000                   |  | Owned 
|Ancenis, France                 |  | Distribution                        |  | 12,000                   |  | Owned 
|Vaggeryd, Sweden                |  | Sales                               |  | 2,000                    |  | Leased
|Epignay, France                 |  | Sales                               |  | 2,000                    |  | Leased
|Barcelona, Spain                |  | Sales                               |  | 1,000                    |  | Leased
|Vantaa, Finland                 |  | Sales                               |  | 500                      |  | Leased
|ASIA PACIFIC                    |  |                                     |  |                          |  |       
|Brisbane, Australia             |  | Manufacturing                       |  | 46,000                   |  | Leased
|Osaka, Japan                    |  | Sales/Distribution                  |  | 24,000                   |  | Owned 
|Inchon, Korea                   |  | Manufacturing                       |  | 12,000                   |  | Owned 
|Auckland, New Zealand           |  | Sales/Distribution                  |  | 9,000                    |  | Leased
|Johannesburg, South Africa      |  | Sales/Distribution                  |  | 9,000                    |  | Leased
|CHINA                           |  |                                     |  |                          |  |       
|Hebei, China                    |  | Manufacturing                       |  | 88,000                   |  | Leased
|Xiamen, China                   |  | Manufacturing                       |  | 78,000                   |  | Leased
|Xiamen, China                   |  | Manufacturing                       |  | 72,000                   |  | Leased
|Hebei, China                    |  | Manufacturing                       |  | 65,000                   |  | Leased



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

Neither Cascade nor any of our
subsidiaries are involved in any material pending legal proceedings. We believe we are adequately insured against product liability, personal injury and property damage claims, which may occasionally arise.



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

None.



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Officers of the
Registrant

Robert C. Warren, Jr.Chief Executive Officer and President (1)Mr. Warren, 60, has served as
President and Chief Executive Officer of Cascade since 1996. He was President and Chief Operating Officer from 1993 until 1996 and was formerly Vice PresidentMarketing. Mr. Warren joined Cascade in 1972.

Richard S. AndersonSenior Vice President and Chief Operating Officer (1)Mr. Anderson, 61, has served as Chief Operating Officer
since 2008. Mr. Anderson has been employed by Cascade since 1972 and held several positions including his appointments as Chief Financial Officer from 2001 to 2008, Vice PresidentMaterial Handling Product Group in 1996 and Senior Vice
PresidentInternational in 1999.

Frank R. Altenhofen, Vice PresidentAsia Pacific (1)Mr. Altenhofen, 47, was
appointed Vice PresidentAsia Pacific in June 2008 and was appointed Vice President, Americas in 2007. He started his career with Cascade in 1983 and held numerous manufacturing, marketing, and management positions including General Manager of
Cascades operations in China, until his departure in 2001. Mr. Altenhofens experience from 2001 to 2007 includes four years as President of an international medical device company.

Peter D. Drake, Vice PresidentAmericas (1)Mr. Drake, 41, was appointed Vice PresidentAmericas in June 2008. He started his
career with Cascade in 1991 and has held a number of management positions including serving as Plant Manager for Cascades Portland facility since 2000.

Michael E. Kern, Vice PresidentConstruction Attachment Division (1)Mr. Kern, 62, has served as Vice President  Construction Attachment Division since 2007. He has been employed by Cascade
since 1966 and has held several positions, including his appointments as Vice PresidentSales and Marketing in 2003, as Vice PresidentDirector of Dealer Marketing and Sales in 2001 and Aftermarket Sales Manager in 1999.

Kevin B. Kreiter, Vice PresidentEngineering and Marketing (1)Mr. Kreiter, 55, has served in his current position since 2007. He
has been employed by Cascade since 1979 and has held several positions within the engineering group, including his appointment as Vice PresidentEngineering in 2006.

Jeffrey K. Nickoloff, Vice PresidentCorporate Manufacturing (1)Mr. Nickoloff, 53, has served in his current position since 2002. He has held several positions with Cascade, including his
appointments as Director of North American Manufacturing in 2000 and Plant Manager in 1993. Mr. Nickoloff joined Cascade in 1979.

Joseph G. Pointer, Vice President and Chief Financial Officer (1)Mr. Pointer, 48, has served as Chief Financial Officer since 2008. He was the Vice PresidentFinance from 2000 to 2008. Prior to joining Cascade in
2000, Mr. Pointer was a partner at PricewaterhouseCoopers LLP in Portland, Oregon.

Davide Roncari, Vice PresidentEurope
(1)Mr. Roncari, 36, was appointed Vice PresidentEurope in June 2008. He has held a number of management positions in Cascades European operations since 2003, including his most recent assignment as Director of
EngineeringEurope and Director of Production for the Verona, Italy manufacturing operations.

Susan Chazin-Wright, Vice
PresidentHuman Resources (1)Susan Chazin-Wright, 57, was appointed as Vice PresidentHuman Resources in March 2008. Prior to joining Cascade, Ms. Wright served as Director of Human Resources at the Stanford Graduate
School of Business and as Vice President of Corporate Services at Denso Corporation, a Toyota affiliate automotive component manufacturer.

John A. CushingTreasurerMr. Cushing, 48, has served as Treasurer since 2001. He previously was Assistant Treasurer from 1999 until 2001. Prior to joining Cascade in 1999, Mr. Cushing was Assistant Treasurer for
Fred Meyer, Inc., a retail company in Portland, Oregon.





(1)These individuals are considered executive
officers of Cascade Corporation.



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PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

As of March 11, 2009, there were 167 shareholders of record of Cascades common stock including blocks of shares held by various depositories.
It is our belief that when the shares held by the depositories are attributed to the beneficial owners, the total exceeds 2,000.

Performance Graph

The following graph compares the annual percentage change in the cumulative shareholder return on our common stock with the cumulative
total return of the Russell 2000 Index and an industry group of peer companies, in each case assuming investment of $100 on January 31, 2004, and reinvestment of dividends. The stock price performance shown in the graph below is not necessarily
indicative of future stock price performance. Notwithstanding anything to the contrary set forth in any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, the stock performance graph shall not be incorporated by
reference into any such filings and shall not otherwise be deemed filed under such acts.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Cascade Corporation, The Russell 2000 Index

And A Peer Group

LOGO



|* | $100 invested on 1/31/04 in stock & index-including reinvestment of dividends. Fiscal year ending January 31.
|- | -------------------------------------------------------------------------------------------------------------

The peer group comprises the following companies: Actuant Corporation., Alamo Group Inc., Ampco-Pittsburgh Corporation, Astec Industries, Inc.,
Columbus-McKinnon Corporation, Gulf Island Fabrication, Inc., IDEX Corporation, Lindsay Manufacturing Company, Nordson Corporation.



14



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##### Table of Contents



Market Information

The high and low sales prices of our common stock based on intra-day prices on the New York Stock Exchange for each quarter during the last two fiscal
years were as follows:



|               |      |                       |       |  |      |       |     |   |       |  |   |      
|-------------- | ---- | --------------------- | ----- |  | ---- | ----- | --- | - | ----- |  | - | -----
|               |      | Year ended January 31
|               | 2009 |                       | 2008 
|               | High |                       | Low   |  | High |       | Low
|First quarter  |      | $                     | 54.87 |  | $    | 39.70 |     | $ | 66.20 |  | $ | 53.28
|Second quarter |      |                       | 51.05 |  |      | 39.01 |     |   | 89.87 |  |   | 60.02
|Third quarter  |      |                       | 53.76 |  |      | 27.65 |     |   | 77.85 |  |   | 54.92
|Fourth quarter |      |                       | 36.16 |  |      | 20.60 |     |   | 64.87 |  |   | 40.06

Common Stock Dividends

The common stock dividends declared during each quarter of the last two fiscal years were as follows:



|               |  |                      |      |      |   |     
|-------------- |  | -------------------- | ---- | ---- | - | ----
|               |  | Year endedJanuary 31
|               |  | 2009                 |      | 2008
|First quarter  |  | $                    | 0.18 |      | $ | 0.16
|Second quarter |  |                      | 0.20 |      |   | 0.18
|Third quarter  |  |                      | 0.20 |      |   | 0.18
|Fourth quarter |  |                      | 0.20 |      |   | 0.18
|               |  |                      |      |      |   |     
|Total          |  | $                    | 0.78 |      | $ | 0.70
|               |  |                      |      |      |   |     

Common Stock Repurchase

During the first quarter of fiscal 2009 we concluded our share repurchase program. In total, we repurchased 2,435,000 shares of common stock for $130 million over an 18 month period.

Stock Exchange Listing and Transfer Agent

Cascades stock is traded on the New York Stock Exchange under the symbol CAE.

Cascades registrar and transfer agent is
BNY Mellon Shareowner Services, P.O. Box 358015, Pittsburgh, P.A., 15252, (877) 268-3023.

Equity Compensation Plan Information

For information on our equity compensation plans, see Item 12 of this report.



15



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##### Table of Contents



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

The following selected
financial data should be read in conjunction with our consolidated financial statements and accompanying notes contained in Item 8 of this Form 10-K.



|                                            |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------------------- |  | ------------------------------------------------------ | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                            |  | Year Ended January 31                                  |        
|                                            |  | 2009                                                   |         |   | 2008 |   |         | 2007 |  |   | 2006    |   |  | 2005 |        
|                                            |  | (In thousands, except per share amounts and employees) |        
|Income statement data:                      |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Net sales                                   |  | $                                                      | 534,172 |   |      | $ | 558,073 |      |  | $ | 478,850 |   |  | $    | 450,503 |   |  | $ | 385,719 |  
|Operating income(1)                         |  | $                                                      | 11,477  |   |      | $ | 95,613  |      |  | $ | 68,351  |   |  | $    | 63,894  |   |  | $ | 47,777  |  
|Net income(2)                               |  | $                                                      | 1,267   |   |      | $ | 60,147  |      |  | $ | 45,481  |   |  | $    | 42,051  |   |  | $ | 28,490  |  
|Cash flow data:                             |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash flows from operating activities        |  | $                                                      | 41,086  |   |      | $ | 53,326  |      |  | $ | 57,109  |   |  | $    | 50,425  |   |  | $ | 37,808  |  
|Cash flows from investing activities        |  | $                                                      | (16,134 | ) |      | $ | (31,627 | )    |  | $ | (33,582 | ) |  | $    | (31,723 | ) |  | $ | (14,857 | )
|Cash flows from financing activities        |  | $                                                      | (20,382 | ) |      | $ | (33,432 | )    |  | $ | (22,153 | ) |  | $    | (13,191 | ) |  | $ | (16,892 | )
|Stock information:                          |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Basic earnings per share(2)                 |  | $                                                      | 0.12    |   |      | $ | 5.08    |      |  | $ | 3.64    |   |  | $    | 3.40    |   |  | $ | 2.34    |  
|Diluted earnings per share(2)               |  | $                                                      | 0.11    |   |      | $ | 4.88    |      |  | $ | 3.48    |   |  | $    | 3.27    |   |  | $ | 2.24    |  
|Book value per common share(3)              |  | $                                                      | 21.84   |   |      | $ | 24.73   |      |  | $ | 22.51   |   |  | $    | 20.69   |   |  | $ | 17.82   |  
|Dividends declared                          |  | $                                                      | 0.78    |   |      | $ | 0.70    |      |  | $ | 0.61    |   |  | $    | 0.54    |   |  | $ | 0.45    |  
|Balance sheet information:                  |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash and marketable securities              |  | $                                                      | 31,185  |   |      | $ | 21,223  |      |  | $ | 36,593  |   |  | $    | 58,497  |   |  | $ | 31,985  |  
|Working capital(4)                          |  | $                                                      | 161,718 |   |      | $ | 151,971 |      |  | $ | 113,130 |   |  | $    | 124,962 |   |  | $ | 94,154  |  
|Property, plant and equipment, net          |  | $                                                      | 93,826  |   |      | $ | 98,350  |      |  | $ | 84,151  |   |  | $    | 75,374  |   |  | $ | 82,027  |  
|Total assets                                |  | $                                                      | 397,583 |   |      | $ | 462,500 |      |  | $ | 397,432 |   |  | $    | 361,283 |   |  | $ | 328,092 |  
|Total debt                                  |  | $                                                      | 102,763 |   |      | $ | 110,716 |      |  | $ | 51,119  |   |  | $    | 29,922  |   |  | $ | 40,564  |  
|Shareholders equity                        |  | $                                                      | 236,967 |   |      | $ | 268,025 |      |  | $ | 271,636 |   |  | $    | 259,406 |   |  | $ | 217,883 |  
|Other:                                      |  |                                                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Capital expenditures                        |  | $                                                      | 16,709  |   |      | $ | 22,808  |      |  | $ | 18,078  |   |  | $    | 10,580  |   |  | $ | 13,581  |  
|Depreciation                                |  | $                                                      | 13,801  |   |      | $ | 13,898  |      |  | $ | 13,753  |   |  | $    | 14,562  |   |  | $ | 13,912  |  
|Amortization                                |  | $                                                      | 2,519   |   |      | $ | 3,214   |      |  | $ | 1,472   |   |  | $    | 1,443   |   |  | $ | 658     |  
|Share-based compensation expense(5)         |  | $                                                      | 4,421   |   |      | $ | 4,451   |      |  | $ | 4,033   |   |  | $    | 2,278   |   |  | $ | 2,492   |  
|Interest expense, net of interest income    |  | $                                                      | 3,475   |   |      | $ | 3,315   |      |  | $ | 400     |   |  | $    | 1,762   |   |  | $ | 3,008   |  
|Diluted weighted average shares outstanding |  |                                                        | 11,077  |   |      |   | 12,333  |      |  |   | 13,071  |   |  |      | 12,850  |   |  |   | 12,726  |  
|Number of employees                         |  |                                                        | 2,100   |   |      |   | 2,400   |      |  |   | 2,100   |   |  |      | 1,900   |   |  |   | 1,800   |  



|(1) | Amount includes a $46,376 asset impairment charge in 2009 and a $15,977 insurance litigation recovery in 2008.
|--- | --------------------------------------------------------------------------------------------------------------



|(2) | Amount includes an after-tax asset impairment charge in 2009 of $31,576 ($2.85 per diluted share) and an after-tax insurance litigation recovery in 2008 of $10,026 ($0.81 per
diluted share).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Defined as equity divided by number of common shares at year end.
|--- | -----------------------------------------------------------------



|(4) | Defined as current assets less current liabilities.
|--- | ---------------------------------------------------



|(5) | See Notes 2 and 12 to the Consolidated Financial Statements for additional information on share-based compensation.
|--- | -------------------------------------------------------------------------------------------------------------------



16



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

The following is a discussion and analysis of certain significant factors that have affected our financial condition as of January 31, 2009, and the
results of operations and cash flows for the fiscal years ended January 31, 2009, 2008 and 2007. This information should be read in conjunction with our consolidated financial statements and notes thereto under Item 8, Financial
Statements and Supplementary Data of this report.

OVERVIEW

Our businesses globally manufacture and distribute material handling load engagement products primarily for the lift truck industry and to a lesser
extent the construction industry. We operate our business in four geographic segments: North America, Europe, Asia Pacific and China. A further discussion of the nature of our business is contained in Item 1, Business, of this
report.

RECENT TRENDS AND DEVELOPMENTS AFFECTING OUR RESULTS

Global Economic Downturn

The financial and banking crisis that occurred in the fourth quarter of
fiscal 2009 triggered a significant decline in global economic conditions, which included depressed demand for lift trucks and our products. Global lift truck order rates in January 2009 were 56% below the prior year and are at their lowest levels
since 1983. Financial markets also continue to be under stress. The uncertainty around the depth and duration of this recession makes it very difficult to estimate the effect on our business in the future. As a result, we are executing plans and
implementing actions throughout Cascade to deal with this very challenging global business environment. The actions to date have included:



| |  |  | Reduction of our global workforce by 20% at locations where business is expected to remain at current levels in the near term
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | 10% reduction in both salaries for our executive team and fees paid to our board of directors
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | Pay and hiring freezes at all locations
| | - |  | ---------------------------------------



| |  |  | Reduced work schedules, including plant shutdowns for limited time periods, at most manufacturing facilities
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | Controls and limits over all spending to reduce production and administrative costs
| | - |  | -----------------------------------------------------------------------------------



| |  |  | Controls and limits over capital expenditures
| | - |  | ---------------------------------------------

We believe the steps we have taken will position us to emerge from this economic cycle a stronger company, able to take advantage of improved markets and increase our market share.

Europe Restructuring

We have taken a number of steps
to improve the structure of our European operations. These steps have included changes in management personnel, workforce reductions at two facilities, movement of certain production to Italy and the planned closure of a fork manufacturing facility
in France. These changes have not yet translated into improved financial results because they have involved significant costs and caused considerable operational disruption. However we believe that over the long-term our objective of increased
profitability in Europe will be met. The global economic recession has also had a significant impact on these activities and our evaluation of future steps.

Construction Business

During the fourth quarter of fiscal 2009 we recorded an impairment charge of $46 million related to
goodwill and intangible assets from our North American construction attachment business. This charge is a result



17



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of operating losses incurred in our construction business during fiscal 2009 due to severely depressed levels of construction activity in the United States.
These factors prompted a revaluation of the recorded value of this business in comparison with the estimated fair value as part of our impairment tests.

COMPARISON OF FISCAL 2009 AND FISCAL 2008

Executive Summary



|                           |  |                                         |         |        |   |         |          |   |         |   |  |     |   
|-------------------------- |  | --------------------------------------- | ------- | ------ | - | ------- | -------- | - | ------- | - |  | --- | --
|                           |  | Year Ended January 31                   |         | Change |   |         | Change % |  
|                           |  | 2009                                    |         | 2008   |   |        
|                           |  | (In thousands except per share amounts) |         |        |   |        
|Net sales                  |  | $                                       | 534,172 |        | $ | 558,073 |          | $ | (23,901 | ) |  | (4  | )%
|Operating income           |  | $                                       | 11,477  |        | $ | 95,613  |          | $ | (84,136 | ) |  | (88 | )%
|Net income                 |  | $                                       | 1,267   |        | $ | 60,147  |          | $ | (58,880 | ) |  | (98 | )%
|Diluted earnings per share |  | $                                       | 0.11    |        | $ | 4.88    |          | $ | (4.77   | ) |  | (98 | )%

During the fourth quarter of fiscal 2009 we recognized a $46.4 million asset impairment charge for
goodwill and intangible assets associated with our construction attachment business, which decreased net income $31.6 million. During the first quarter of fiscal 2008 we settled an insurance litigation matter which accounted for a $16 million
increase to operating income and a $10 million increase to net income. We believe the following exclusion of the asset impairment charge and insurance litigation recovery provides a more appropriate comparison of fiscal 2009 and fiscal 2008
financial results.



|                                                                  |  |                                         |        |        |   |        |          |   |         |   |  |     |   
|----------------------------------------------------------------- |  | --------------------------------------- | ------ | ------ | - | ------ | -------- | - | ------- | - |  | --- | --
|                                                                  |  | Year Ended January 31                   |        | Change |   |        | Change % |  
|                                                                  |  | 2009                                    |        | 2008   |   |       
|                                                                  |  | (In thousands except per share amounts) |        |        |   |       
|Net of asset impairment charge and insurance litigation recovery: |  |                                         |        |        |   |        |          |   |         |   |  |     |   
|Operating income                                                  |  | $                                       | 57,853 |        | $ | 79,636 |          | $ | (21,783 | ) |  | (27 | )%
|Net income                                                        |  | $                                       | 32,843 |        | $ | 50,121 |          | $ | (17,278 | ) |  | (34 | )%
|Diluted earnings per share                                        |  | $                                       | 2.96   |        | $ | 4.06   |          | $ | (1.10   | ) |  | (27 | )%

The calculation of operating income, net income and diluted earnings per share, excluding the asset
impairment charge and insurance litigation recovery is as follows (in thousands, except per share amounts):



|                                                                                                |  |                       |        |      |   |         |  
|----------------------------------------------------------------------------------------------- |  | --------------------- | ------ | ---- | - | ------- | -
|                                                                                                |  | Year Ended January 31 |       
|                                                                                                |  | 2009                  |        | 2008 |  
|Operating income as reported                                                                    |  | $                     | 11,477 |      | $ | 95,613  |  
|Add: asset impairment charge                                                                    |  |                       | 46,376 |      |   |        |  
|Less: insurance litigation recovery                                                             |  |                       |       |      |   | (15,977 | )
|                                                                                                |  |                       |        |      |   |         |  
|Adjusted operating income, excluding asset impairment charge and insurance litigation recovery  |  | $                     | 57,853 |      | $ | 79,636  |  
|                                                                                                |  |                       |        |      |   |         |  
|Net income as reported                                                                          |  | $                     | 1,267  |      | $ | 60,147  |  
|Add: asset impairment charge, net of income taxes of $14,800                                    |  |                       | 31,576 |      |   |        |  
|Less: insurance litigation recovery, net of income taxes of $5,951                              |  |                       |       |      |   | (10,026 | )
|                                                                                                |  |                       |        |      |   |         |  
|Adjusted net income, excluding asset impairment charge and insurance litigation recovery        |  | $                     | 32,843 |      | $ | 50,121  |  
|                                                                                                |  |                       |        |      |   |         |  
|Diluted weighted average shares outstanding                                                     |  |                       | 11,077 |      |   | 12,333  |  
|                                                                                                |  |                       |        |      |   |         |  
|Diluted earnings per share, excluding asset impairment charge and insurance litigation recovery |  | $                     | 2.96   |      | $ | 4.06    |  
|                                                                                                |  |                       |        |      |   |         |  



18



---

##### Table of Contents



The following are financial
highlights for fiscal 2009:



| |  |  | During the current year consolidated net sales were down 6%, excluding the impact of foreign currency changes. Global lift truck shipments were flat compared to
fiscal 2008.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2009, gross profit percentages decreased in all geographic regions as a result of lower sales volumes and material price increases. Our consolidated
gross profit percentage decreased to 28% in the current year from 31% in the prior year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

North America



|                                          |  |                       |         |   |        |     |    |          |   |         |   |  |     |    |  |   |         |   |  |      |   
|----------------------------------------- |  | --------------------- | ------- | - | ------ | --- | -- | -------- | - | ------- | - |  | --- | -- |  | - | ------- | - |  | ---- | --
|                                          |  | Year Ended January 31 |         |   | Change |     |    | Change % |  
|                                          |  | 2009                  |         |   | %      |     |    | 2008     |   |         | % |  |     |   
|                                          |  | (In thousands)        |         |   |        |     |    |          |  
|Net sales                                 |  | $                     | 257,077 |   |        | 90  | %  |          | $ | 286,832 |   |  | 90  | %  |  | $ | (29,755 | ) |  | (10  | )%
|Transfers between areas                   |  |                       | 29,083  |   |        | 10  | %  |          |   | 33,118  |   |  | 10  | %  |  |   | (4,035  | ) |  | (12  | )%
|                                          |  |                       |         |   |        |     |    |          |   |         |   |  |     |    |  |   |         |   |  |      |   
|Net sales and transfers                   |  |                       | 286,160 |   |        | 100 | %  |          |   | 319,950 |   |  | 100 | %  |  |   | (33,790 | ) |  | (11  | )%
|                                          |  |                       |         |   |        |    
|Cost of goods sold                        |  |                       | 198,236 |   |        | 69  | %  |          |   | 210,118 |   |  | 66  | %  |  |   | (11,882 | ) |  | (6   | )%
|                                          |  |                       |         |   |        |     |    |          |   |         |   |  |     |    |  |   |         |   |  |      |   
|Gross profit                              |  |                       | 87,924  |   |        | 31  | %  |          |   | 109,832 |   |  | 34  | %  |  |   | (21,908 | ) |  | (20  | )%
|                                          |  |                       |         |   |        |    
|Selling and administrative                |  |                       | 45,451  |   |        | 16  | %  |          |   | 51,020  |   |  | 16  | %  |  |   | (5,569  | ) |  | (11  | )%
|Loss (gain) on disposition of assets, net |  |                       | 178     |   |        |    |    |          |   | (1,135  | ) |  | (1  | )% |  |   | 1,313   |   |  |     |   
|Amortization                              |  |                       | 2,221   |   |        | 1   | %  |          |   | 2,482   |   |  | 1   | %  |  |   | (261    | ) |  | (11  | )%
|Insurance litigation recovery, net        |  |                       |        |   |        |    |    |          |   | (15,977 | ) |  | (5  | )% |  |   | 15,977  |   |  |     |   
|Asset impairment                          |  |                       | 46,376  |   |        | 16  | %  |          |   |        |   |  |    |    |  |   | 46,376  |   |  |     |   
|                                          |  |                       |         |   |        |     |    |          |   |         |   |  |     |    |  |   |         |   |  |      |   
|Operating income (loss)                   |  | $                     | (6,302  | ) |        | (2  | )% |          | $ | 73,442  |   |  | 23  | %  |  | $ | (79,744 | ) |  | (109 | )%
|                                          |  |                       |         |   |        |     |    |          |   |         |   |  |     |    |  |   |         |   |  |      |   

Details of the change in net sales compared to the prior year are as follows (in thousands):



|                        |  |        |         |   |          |     |   
|----------------------- |  | ------ | ------- | - | -------- | --- | --
|                        |  | Amount |         |   | Change % |    
|Net sales change        |  | $      | (29,354 | ) |          | (10 | )%
|Foreign currency change |  |        | (401    | ) |          | (0  | )%
|                        |  |        |         |   |          |     |   
|Total                   |  | $      | (29,755 | ) |          | (10 | )%
|                        |  |        |         |   |          |     |   

The following summarizes financial results for North America for fiscal 2009. All percentage
comparisons to the prior year exclude the impact of foreign currencies:



| |  |  | Net sales decreased 10% during fiscal 2009 primarily as a result of lower sales volumes due to the general economic downturn, which worsened during the fourth
quarter, but was partially offset by sales price increases. North America lift truck industry shipments decreased 12% from 2008 to 2009. We have found that lift truck industry statistics provide an indication of the direction of our business
activity. However, changes in our net sales do not correspond directly to the percentage changes in lift truck industry shipments, because certain industry sectors of the economy use our products more than others.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Transfers to other Cascade geographic areas decreased 12% during fiscal 2009 due to lower global customer demand.
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage decreased 3% during fiscal 2009 due to higher material costs, changes in product mix, lower production volumes, new product introduction
costs and other cost increases, which were partially offset by sales price increases. Our gross profit percentage has been consistent each quarter during the current year.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative costs decreased 11% during the current year due to a reduction in personnel and consulting costs combined with significant discretionary
spending reductions in other areas.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19



---

##### Table of Contents



| |  |  | During the fourth quarter of fiscal 2009, we recognized a $46.4 million asset impairment charge for goodwill and intangible assets associated with our construction
attachment business. See Critical Accounting Policies and Estimates for further discussion related to the asset impairment charge.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2008, we realized a $1.1 million pre-tax gain on the sale of land in Fairview, Oregon.
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2008, we entered into a settlement agreement with Employers Reinsurance Corporation with respect to litigation to recover various expenses incurred in
connection with environmental and related proceedings. The recovery from this settlement was $16 million, net of expenses.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Europe



|                                   |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |        |   |  |      |   
|---------------------------------- |  | --------------------- | ------- | - | ------ | --- | -- | -------- | - | ------- |  | --- | - |  | - | ------ | - |  | ---- | --
|                                   |  | Year Ended January 31 |         |   | Change |     |    | Change % |  
|                                   |  | 2009                  |         |   | %      |     |    | 2008     |   | %       |  |     |  
|                                   |  | (In thousands)        |         |   |        |     |    |          |  
|Net sales                          |  | $                     | 167,955 |   |        | 99  | %  |          | $ | 171,435 |  | 99  | % |  | $ | (3,480 | ) |  | (2   | )%
|Transfers between areas            |  |                       | 1,686   |   |        | 1   | %  |          |   | 1,497   |  | 1   | % |  |   | 189    |   |  | 13   | % 
|                                   |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |        |   |  |      |   
|Net sales and transfers            |  |                       | 169,641 |   |        | 100 | %  |          |   | 172,932 |  | 100 | % |  |   | (3,291 | ) |  | (2   | )%
|                                   |  |                       |         |   |        |    
|Cost of goods sold                 |  |                       | 144,388 |   |        | 85  | %  |          |   | 145,288 |  | 84  | % |  |   | (900   | ) |  | (1   | )%
|                                   |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |        |   |  |      |   
|Gross profit                       |  |                       | 25,253  |   |        | 15  | %  |          |   | 27,644  |  | 16  | % |  |   | (2,391 | ) |  | (9   | )%
|                                   |  |                       |         |   |        |    
|Selling and administrative         |  |                       | 26,148  |   |        | 15  | %  |          |   | 26,201  |  | 15  | % |  |   | (53    | ) |  |     |   
|Loss on disposition of assets, net |  |                       | 108     |   |        |    |    |          |   |        |  |    |   |  |   | 108    |   |  |     |   
|Amortization                       |  |                       | 298     |   |        |    |    |          |   | 732     |  | 1   | % |  |   | (434   | ) |  | (59  | )%
|European restructuring costs       |  |                       | 2,544   |   |        | 2   | %  |          |   |        |  |    |   |  |   | 2,544  |   |  |     |   
|                                   |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |        |   |  |      |   
|Operating income (loss)            |  | $                     | (3,845  | ) |        | (2  | )% |          | $ | 711     |  | 0   | % |  | $ | (4,556 | ) |  | (641 | )%
|                                   |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |        |   |  |      |   

Details of the change in net sales compared to the prior year are as follows (in thousands):



|                        |  |        |        |   |          |    |   
|----------------------- |  | ------ | ------ | - | -------- | -- | --
|                        |  | Amount |        |   | Change % |   
|Net sales change        |  | $      | (8,249 | ) |          | (5 | )%
|Foreign currency change |  |        | 4,769  |   |          | 3  | % 
|                        |  |        |        |   |          |    |   
|Total                   |  | $      | (3,480 | ) |          | (2 | )%
|                        |  |        |        |   |          |    |   

The following summarizes financial results for Europe for fiscal 2009. All percentage comparisons
to the prior year exclude the impact of foreign currencies:



| |  |  | During fiscal 2009 net sales decreased 5%, primarily as a result of weakening economic conditions in the fourth quarter. Although lift truck industry shipments for
the year increased 1%, European lift truck shipments for the fourth quarter 2009 were down 27% and appear to be more reflective of the current economic conditions.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our current year gross profit percentage decreased 1%, primarily due to increased material costs, which have been mitigated in part by sales price increases and
more efficient manufacturing as a result of cost reductions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative expenses decreased 4%, due to lower personnel, selling, and other general costs.
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2009, we incurred $2.5 million in restructuring costs, primarily severance and legal costs, related to optimization of operations at our facilities in
Almere, The Netherlands and Hagen, Germany. Continued restructuring activities are in process which will result in additional costs in the coming year. Included among these activities is the closure of our fork manufacturing facility in France in
March 2009, at an estimated cost of $2.7 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



---

##### Table of Contents



Asia Pacific



|                                          |  |                       |        |   |        |   |          |   |        |   |  |     |   |  |   |       |  |    |  
|----------------------------------------- |  | --------------------- | ------ | - | ------ | - | -------- | - | ------ | - |  | --- | - |  | - | ----- |  | -- | -
|                                          |  | Year Ended January 31 |        |   | Change |   | Change % |  
|                                          |  | 2009                  |        | % |        |   | 2008     |   |        | % |  |     |  
|                                          |  | (In thousands)        |        |   |        |   |          |  
|Net sales                                 |  | $                     | 68,466 |   | 99     | % |          | $ | 59,776 |   |  | 100 | % |  | $ | 8,690 |  | 15 | %
|Transfers between areas                   |  |                       | 355    |   | 1      | % |          |   | 179    |   |  |    |   |  |   | 176   |  | 98 | %
|                                          |  |                       |        |   |        |   |          |   |        |   |  |     |   |  |   |       |  |    |  
|Net sales and transfers                   |  |                       | 68,821 |   | 100    | % |          |   | 59,955 |   |  | 100 | % |  |   | 8,866 |  | 15 | %
|                                          |  |                       |        |   |        |  
|Cost of goods sold                        |  |                       | 52,458 |   | 76     | % |          |   | 44,892 |   |  | 75  | % |  |   | 7,566 |  | 17 | %
|                                          |  |                       |        |   |        |   |          |   |        |   |  |     |   |  |   |       |  |    |  
|Gross profit                              |  |                       | 16,363 |   | 24     | % |          |   | 15,063 |   |  | 25  | % |  |   | 1,300 |  | 9  | %
|                                          |  |                       |        |   |        |  
|Selling and administrative                |  |                       | 9,040  |   | 13     | % |          |   | 8,297  |   |  | 14  | % |  |   | 743   |  | 9  | %
|Loss (gain) on disposition of assets, net |  |                       | 47     |   |       |   |          |   | (34    | ) |  |    |   |  |   | 81    |  |   |  
|                                          |  |                       |        |   |        |   |          |   |        |   |  |     |   |  |   |       |  |    |  
|Operating income                          |  | $                     | 7,276  |   | 11     | % |          | $ | 6,800  |   |  | 11  | % |  | $ | 476   |  | 7  | %
|                                          |  |                       |        |   |        |   |          |   |        |   |  |     |   |  |   |       |  |    |  

Details of the change in net sales compared to the prior year are as follows (in thousands):



|                        |  |        |       |          |    |  
|----------------------- |  | ------ | ----- | -------- | -- | -
|                        |  | Amount |       | Change % |   
|Net sales change        |  | $      | 8,180 |          | 14 | %
|Foreign currency change |  |        | 510   |          | 1  | %
|                        |  |        |       |          |    |  
|Total                   |  | $      | 8,690 |          | 15 | %
|                        |  |        |       |          |    |  

The following summarizes the financial results for Asia Pacific for fiscal 2009. All percentage
comparisons to the prior year exclude the impact of foreign currencies:



| |  |  | Net sales increased 14% due to higher shipping volumes as a result of strong business activity in the region. Lift truck industry shipments for the year increased
3%. However, Asia Pacific lift truck shipments for the fourth quarter 2009 were down 20% and appear to be more reflective of the current economic conditions.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage in Asia Pacific decreased 1% due to material cost increases and fluctuations in foreign currency rates.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative costs increased 6% due to higher personnel, marketing and other general expenses. However, as a percentage of net sales and transfers,
selling and administrative costs decreased from 14% in fiscal 2008 to 13% in fiscal 2009.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

China



|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |       |   |  |    |   
|---------------------------------- |  | --------------------- | ------ | - | ------ | - | ---- | -------- | ------ |  | --- | - |  | - | ----- | - |  | -- | --
|                                   |  | Year Ended January 31 |        |   | Change |   |      | Change % |       
|                                   |  | 2009                  |        | % |        |   | 2008 |          | %      |  |     |  
|                                   |  | (In thousands)        |        |   |        |   |      |          |       
|Net sales                          |  | $                     | 40,674 |   | 64     | % |      | $        | 40,030 |  | 70  | % |  | $ | 644   |   |  | 2  | % 
|Transfers between areas            |  |                       | 23,219 |   | 36     | % |      |          | 17,410 |  | 30  | % |  |   | 5,809 |   |  | 33 | % 
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |       |   |  |    |   
|Net sales and transfers            |  |                       | 63,893 |   | 100    | % |      |          | 57,440 |  | 100 | % |  |   | 6,453 |   |  | 11 | % 
|                                   |  |                       |        |   |        |  
|Cost of goods sold                 |  |                       | 44,885 |   | 70     | % |      |          | 38,805 |  | 68  | % |  |   | 6,080 |   |  | 16 | % 
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |       |   |  |    |   
|Gross profit                       |  |                       | 19,008 |   | 30     | % |      |          | 18,635 |  | 32  | % |  |   | 373   |   |  | 2  | % 
|                                   |  |                       |        |   |        |  
|Selling and administrative         |  |                       | 4,590  |   | 8      | % |      |          | 3,927  |  | 6   | % |  |   | 663   |   |  | 17 | % 
|Loss on disposition of assets, net |  |                       | 70     |   |       |   |      |          | 48     |  |    |   |  |   | 22    |   |  |   |   
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |       |   |  |    |   
|Operating income                   |  | $                     | 14,348 |   | 22     | % |      | $        | 14,660 |  | 26  | % |  | $ | (312  | ) |  | (2 | )%
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |       |   |  |    |   



21



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##### Table of Contents



Details of the change in net
sales compared to the prior year are as follows (in thousands):



|                        |  |        |        |   |          |    |   
|----------------------- |  | ------ | ------ | - | -------- | -- | --
|                        |  | Amount |        |   | Change % |   
|Net sales change        |  | $      | (2,764 | ) |          | (7 | )%
|Foreign currency change |  |        | 3,408  |   |          | 9  | % 
|                        |  |        |        |   |          |    |   
|Total                   |  | $      | 644    |   |          | 2  | % 
|                        |  |        |        |   |          |    |   

The following summarizes the financial results for China for fiscal 2009. All percentage
comparisons to the prior year exclude the impact of foreign currencies:



| |  |  | During fiscal 2009 net sales decreased 7% due to a general slowdown in the Chinese economy during the fourth quarter, which included a decline in the lift truck
industry. Lift truck industry shipments for the year decreased 4%. China lift truck shipments for the fourth quarter 2009 were down 45% and appear to be more reflective of the current economic conditions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Transfers to other Cascade geographic areas increased during fiscal 2009 due to the export of products to Europe and Asia Pacific.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | The current year gross profit percentage decreased 2% due to material cost increases, changes in product mix and higher intercompany transfers, which carry lower
gross margins. Price increases implemented during the current year helped to mitigate these factors to some extent.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative costs increased 7% during fiscal 2009 due to marketing, consulting and other general costs.
| | - |  | ----------------------------------------------------------------------------------------------------------------------

Non-Operating Items

The following are financial
highlights for non-operating items during fiscal 2009:



| |  |  | Interest expense, net of interest income, remained relatively constant during fiscal 2009.
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Foreign currency losses increased $2.2 million during fiscal 2009. This is a result of significant changes in the Euro, British Pound, Korean Won, Canadian Dollar
and Australian Dollar.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table represents the percentage change from January 31, 2008 to
January 31, 2009 in our most significant foreign currency rates.



|                  |  |          |   
|----------------- |  | -------- | --
|Currency          |  | Change % |   
|Korean Won        |  | (32      | )%
|Australian Dollar |  | (29      | )%
|British Pound     |  | (27      | )%
|Canadian Dollar   |  | (18      | )%
|Euro              |  | (14      | )%
|Chinese Yuan      |  | 5        | % 



| |  |  | The effective tax rate for fiscal 2009 was 71% compared to 34% in the prior fiscal year. The increase is primarily attributable to a low level of net income for
fiscal 2009 as a result of impairments of intangible assets and goodwill that are not deductible for tax purposes, offset in part by benefits from foreign tax credits.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Lift Truck Market Outlook

The uncertainty around the depth and duration of this recession makes it
very difficult to estimate the effect on the global lift truck market in the future. However, we are anticipating that the current decline in global demand for lift trucks will continue through fiscal 2010 and into 2011.



22



---

##### Table of Contents



Additional information on
lift truck industry trends can be found at www.cascorp.com/investor/industrytrends. This website address is intended to provide an inactive, textual reference only. The information at this website is not part of this Form 10-K and is not
incorporated by reference.

Fourth Quarter Results (2009/2008)



|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|----------------------------------- |  | ----------------------------- | ------- | - | ------ | --- | -- | -------- | - | ------- | - |  | --- | - |  | - | ------- | - |  | ---- | --
|                                    |  | Three Months Ended January 31 |         |   | Change |     |    | Change % |  
|                                    |  | 2009                          |         |   | %      |     |    | 2008     |   |         | % |  |     |  
|                                    |  | (In thousands)                |         |   |        |     |    |          |  
|Net sales                           |  | $                             | 95,068  |   |        | 100 | %  |          | $ | 136,247 |   |  | 100 | % |  | $ | (41,179 | ) |  | (30  | )%
|Cost of goods sold                  |  |                               | 72,122  |   |        | 76  | %  |          |   | 97,629  |   |  | 72  | % |  |   | (25,507 | ) |  | (26  | )%
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Gross profit                        |  |                               | 22,946  |   |        | 24  | %  |          |   | 38,618  |   |  | 28  | % |  |   | (15,672 | ) |  | (41  | )%
|                                    |  |                               |         |   |        |    
|Selling and administrative expenses |  |                               | 17,614  |   |        | 19  | %  |          |   | 23,603  |   |  | 17  | % |  |   | (5,989  | ) |  | (25  | )%
|Loss on disposition of assets       |  |                               | 236     |   |        |    |    |          |   | 57      |   |  |    |   |  |   | 179     |   |  | 314  | % 
|Amortization                        |  |                               | 518     |   |        |    |    |          |   | 808     |   |  | 1   | % |  |   | (290    | ) |  | (36  | )%
|Asset impairment charge             |  |                               | 46,376  |   |        | 49  | %  |          |   |        |   |  |    |   |  |   | 46,376  |   |  |     |   
|European restructuring costs        |  |                               | 806     |   |        | 1   | %  |          |   |        |   |  |    |   |  |   | 806     |   |  |     |   
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Operating income (loss)             |  |                               | (42,604 | ) |        | (45 | )% |          |   | 14,150  |   |  | 10  | % |  |   | (56,754 | ) |  | (401 | )%
|Interest expense, net               |  |                               | 399     |   |        |    |    |          |   | 988     |   |  | 1   | % |  |   | (589    | ) |  | (60  | )%
|Foreign currency losses, net        |  |                               | 1,239   |   |        | 2   | %  |          |   | 412     |   |  |    |   |  |   | 827     |   |  | 201  | % 
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Income (loss) before taxes          |  |                               | (44,242 | ) |        | (47 | )% |          |   | 12,750  |   |  | 9   | % |  |   | (56,992 | ) |  | (447 | )%
|Provision for (benefit from) taxes  |  |                               | (13,741 | ) |        | (15 | )% |          |   | 3,963   |   |  | 3   | % |  |   | (17,704 | ) |  | (447 | )%
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Net income (loss)                   |  | $                             | (30,501 | ) |        | (32 | )% |          | $ | 8,787   |   |  | 6   | % |  | $ | (39,288 | ) |  | (447 | )%
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Diluted earnings (loss) per share   |  | $                             | (2.82   | ) |        |     |    |          | $ | 0.74    |   |  |     |   |  |   |         |   |  |      |   
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|Operating income (loss) by region:  |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|North America                       |  | $                             | (41,827 | ) |        |     |    |          | $ | 10,277  |   |  |     |   |  | $ | (52,104 | ) |  | (507 | )%
|Europe                              |  |                               | (3,439  | ) |        |     |    |          |   | (1,974  | ) |  |     |   |  |   | (1,465  | ) |  | (74  | )%
|Asia Pacific                        |  |                               | 1,065   |   |        |     |    |          |   | 1,752   |   |  |     |   |  |   | (687    | ) |  | (39  | )%
|China                               |  |                               | 1,597   |   |        |     |    |          |   | 4,095   |   |  |     |   |  |   | (2,498  | ) |  | (61  | )%
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   
|                                    |  | $                             | (42,604 | ) |        |     |    |          | $ | 14,150  |   |  |     |   |  | $ | (56,754 | ) |  | (401 | )%
|                                    |  |                               |         |   |        |     |    |          |   |         |   |  |     |   |  |   |         |   |  |      |   

The following summarizes the financial results from the fourth quarter of fiscal 2009. All
percentage comparisons to the prior year exclude the impact of foreign currencies:



| |  |  | Based on order rates from October 2008, we projected that our net sales for the fourth quarter 2009 would be down approximately 30%. The following table compares
the declines in our net sales and lift truck industry shipments from the fourth quarter of fiscal 2008 to fiscal 2009:
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|              |  |           |    |  |                               |   
|------------- |  | --------- | -- |  | ----------------------------- | --
|              |  | Net Sales |    |  | Lift Truck Industry Shipments |   
|North America |  | (27       | )% |  | (15                           | )%
|Europe        |  | (25       | )% |  | (27                           | )%
|Asia Pacific  |  | (4        | )% |  | (20                           | )%
|China         |  | (51       | )% |  | (45                           | )%
|Global        |  | (26       | )% |  | (25                           | )%



| |  |  | We experienced a decrease in gross profit percentage in every region primarily as a result of lower sales volumes and material price increases experienced in all
geographic segments.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative expenses decreased 24%, due to reductions in personnel, consulting, selling, and other general costs.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



23



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| |  |  | Decreases in operating results in all regions are attributable to a significant slowing in the global economy during the fourth quarter.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the fourth quarter we recorded a $46.4 million ($31.6 million after tax) asset impairment charge for goodwill and intangible assets associated with our North
American construction attachment business. Excluding this impairment charge, net income for the fourth quarter would have been $1.1 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The tax benefit for the fourth quarter of fiscal 2009 was 31%. We were unable to realize a tax benefit for a portion of the asset impairment charge incurred during
the quarter, as this amount is not currently deductible for tax purposes.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

COMPARISON OF FISCAL 2008 AND FISCAL 2007

Executive Summary



|                           |  |                                         |         |        |   |          |  |   |        |  |    |  
|-------------------------- |  | --------------------------------------- | ------- | ------ | - | -------- |  | - | ------ |  | -- | -
|                           |  | Year Ended January 31                   |         | Change |   | Change % | 
|                           |  | 2008                                    |         | 2007   |   |         
|                           |  | (In thousands except per share amounts) |         |        |   |          | 
|Net sales                  |  | $                                       | 558,073 |        | $ | 478,850  |  | $ | 79,223 |  | 17 | %
|Operating income           |  | $                                       | 95,613  |        | $ | 68,351   |  | $ | 27,262 |  | 40 | %
|Net income                 |  | $                                       | 60,147  |        | $ | 45,481   |  | $ | 14,666 |  | 32 | %
|Diluted earnings per share |  | $                                       | 4.88    |        | $ | 3.48     |  | $ | 1.40   |  | 40 | %

The following are financial highlights for fiscal 2008:



| |  |  | All regions experienced higher sales and operating income levels compared to the prior year.
| | - |  | --------------------------------------------------------------------------------------------

During fiscal 2008 we posted record levels of consolidated net sales primarily as a result of the strength of lift truck markets in Europe, China and Asia
Pacific, acquisitions in North America and our capital expansion plan in China. Excluding the impact of foreign currency, net sales increased 9% during fiscal 2008, primarily due to increased shipment volumes and to a lesser extent price increases.
Global lift truck shipments increased 10% compared to the prior year.



| |  |  | During fiscal 2008 we settled an insurance litigation matter which resulted in a $16 million increase in operating income and a $10 million increase in net income
($0.81 per diluted share). See Comparison of Fiscal 2009 and Fiscal 2008 for calculations of operating income, net income and diluted earnings per share, excluding the insurance litigation recovery.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

North America



|                                          |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |         |   |  |    |  
|----------------------------------------- |  | --------------------- | ------- | - | ------ | --- | -- | -------- | - | ------- |  | --- | - |  | - | ------- | - |  | -- | -
|                                          |  | Year Ended January 31 |         |   | Change |     |    | Change % |  
|                                          |  | 2008                  |         |   | %      |     |    | 2007     |   | %       |  |     |  
|                                          |  | (In thousands)        |         |   |        |     |    |          |  
|Net sales                                 |  | $                     | 286,832 |   |        | 90  | %  |          | $ | 263,312 |  | 91  | % |  | $ | 23,520  |   |  | 9  | %
|Transfers between areas                   |  |                       | 33,118  |   |        | 10  | %  |          |   | 25,367  |  | 9   | % |  |   | 7,751   |   |  | 31 | %
|                                          |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |         |   |  |    |  
|Net sales and transfers                   |  |                       | 319,950 |   |        | 100 | %  |          |   | 288,679 |  | 100 | % |  |   | 31,271  |   |  | 11 | %
|Cost of goods sold                        |  |                       | 210,118 |   |        | 66  | %  |          |   | 185,869 |  | 64  | % |  |   | 24,249  |   |  | 13 | %
|                                          |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |         |   |  |    |  
|Gross profit                              |  |                       | 109,832 |   |        | 34  | %  |          |   | 102,810 |  | 36  | % |  |   | 7,022   |   |  | 7  | %
|Selling and administrative                |  |                       | 51,020  |   |        | 16  | %  |          |   | 46,750  |  | 16  | % |  |   | 4,270   |   |  | 9  | %
|Loss (gain) on disposition of assets, net |  |                       | (1,135  | ) |        | (1  | )% |          |   | 16      |  |    |   |  |   | (1,151  | ) |  |   |  
|Amortization                              |  |                       | 2,482   |   |        | 1   | %  |          |   | 598     |  | 1   | % |  |   | 1,884   |   |  |   |  
|Insurance litigation recovery, net        |  |                       | (15,977 | ) |        | (5  | )% |          |   |        |  |    |   |  |   | (15,977 | ) |  |   |  
|                                          |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |         |   |  |    |  
|Operating income                          |  | $                     | 73,442  |   |        | 23  | %  |          | $ | 55,446  |  | 19  | % |  | $ | 17,996  |   |  | 32 | %
|                                          |  |                       |         |   |        |     |    |          |   |         |  |     |   |  |   |         |   |  |    |  



24



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The following are financial
highlights for North America for fiscal 2008:



| |  |  | Higher sales in fiscal 2008 were primarily the result of acquisitions made in the fourth quarter of fiscal 2007 and the second quarter of fiscal 2008. Excluding net
sales from acquisitions and the impact of currency changes, net sales increased 1% due to price increases. North America lift truck industry shipments decreased 9% from 2007 to 2008. We have found that lift truck industry statistics provide an
indication of the direction of our business activity. However, changes in our net sales do not correspond directly to the percentage changes in lift truck industry shipments, because certain industry sectors of the economy use our products more than
others.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Transfers to other Cascade geographic areas increased 31% during fiscal 2008 due to increased customer demand globally.
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage decreased 2% during fiscal 2008, due to higher material costs, transfers between areas and changes in product mix.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative costs increased 8%, excluding currency changes, mainly due to acquisitions, share-based compensation expense and personnel costs. As a
percentage of net sales and transfers, selling and administrative costs remained consistent with the prior year.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the second quarter of fiscal 2008 we realized a pre-tax gain of $1.1 million on the sale of land in Fairview, Oregon.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | Higher amortization costs in fiscal 2008 relate to the amortization of intangible assets from our acquisitions.
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | During the first quarter of fiscal 2008, we entered into a settlement agreement with Employers Reinsurance Corporation with respect to litigation to recover various
expenses incurred in connection with environmental and related proceedings. The pre-tax recovery from this settlement was $16 million, net of expenses.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Europe



|                                   |  |                       |         |   |        |   |      |          |         |   |  |     |    |  |   |        |   |  |     |   
|---------------------------------- |  | --------------------- | ------- | - | ------ | - | ---- | -------- | ------- | - |  | --- | -- |  | - | ------ | - |  | --- | --
|                                   |  | Year Ended January 31 |         |   | Change |   |      | Change % |        
|                                   |  | 2008                  |         | % |        |   | 2007 |          |         | % |  |     |   
|                                   |  | (In thousands)        |         |   |        |   |      |          |        
|Net sales                          |  | $                     | 171,435 |   | 99     | % |      | $        | 137,755 |   |  | 99  | %  |  | $ | 33,680 |   |  | 24  | % 
|Transfers between areas            |  |                       | 1,497   |   | 1      | % |      |          | 1,468   |   |  | 1   | %  |  |   | 29     |   |  | 2   | % 
|                                   |  |                       |         |   |        |   |      |          |         |   |  |     |    |  |   |        |   |  |     |   
|Net sales and transfers            |  |                       | 172,932 |   | 100    | % |      |          | 139,223 |   |  | 100 | %  |  |   | 33,709 |   |  | 24  | % 
|Cost of goods sold                 |  |                       | 145,288 |   | 84     | % |      |          | 116,582 |   |  | 84  | %  |  |   | 28,706 |   |  | 25  | % 
|                                   |  |                       |         |   |        |   |      |          |         |   |  |     |    |  |   |        |   |  |     |   
|Gross profit                       |  |                       | 27,644  |   | 16     | % |      |          | 22,641  |   |  | 16  | %  |  |   | 5,003  |   |  | 22  | % 
|                                   |  |                       |         |   |        |  
|Selling and administrative         |  |                       | 26,201  |   | 15     | % |      |          | 22,921  |   |  | 16  | %  |  |   | 3,280  |   |  | 14  | % 
|Gain on disposition of assets, net |  |                       |        |   |       |   |      |          | (588    | ) |  | (1  | )% |  |   | 588    |   |  |    |   
|Amortization                       |  |                       | 732     |   | 1      | % |      |          | 851     |   |  | 1   | %  |  |   | (119   | ) |  | (14 | )%
|                                   |  |                       |         |   |        |   |      |          |         |   |  |     |    |  |   |        |   |  |     |   
|Operating income                   |  | $                     | 711     |   |       |   |      | $        | (543    | ) |  |    |    |  | $ | 1,254  |   |  |    |   
|                                   |  |                       |         |   |        |   |      |          |         |   |  |     |    |  |   |        |   |  |     |   

The following are financial highlights for Europe for fiscal 2008:



| |  |  | During fiscal 2008, net sales increased 15%, excluding currency changes, due to increased shipment volumes, which reflect a strong European lift truck market.
European lift truck industry shipments increased 21% compared to the prior year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage remained consistent at 16% during fiscal 2008 and fiscal 2007. The benefits of fixed cost absorption due to higher sales and production
levels were offset by increases in material costs, production inefficiencies at multiple manufacturing facilities and higher freight and personnel expenses.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



25



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| |  |  | Excluding the impact of currency changes, selling and administrative expenses increased 5% in Europe, because of higher sales and marketing costs. As a percentage
of net sales and transfers, selling and administrative costs decreased from 16% in fiscal 2007 to 15% in fiscal 2008.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Asia Pacific



|                                   |  |                       |        |   |        |     |   |          |   |        |   |  |     |   |  |   |        |   |  |     |   
|---------------------------------- |  | --------------------- | ------ | - | ------ | --- | - | -------- | - | ------ | - |  | --- | - |  | - | ------ | - |  | --- | --
|                                   |  | Year Ended January 31 |        |   | Change |     |   | Change % |  
|                                   |  | 2008                  |        |   | %      |     |   | 2007     |   |        | % |  |     |  
|                                   |  | (In thousands)        |        |   |        |     |   |          |  
|Net sales                          |  | $                     | 59,776 |   |        | 100 | % |          | $ | 48,256 |   |  | 100 | % |  | $ | 11,520 |   |  | 24  | % 
|Transfers between areas            |  |                       | 179    |   |        |    |   |          |   | 220    |   |  |    |   |  |   | (41    | ) |  | (19 | )%
|                                   |  |                       |        |   |        |     |   |          |   |        |   |  |     |   |  |   |        |   |  |     |   
|Net sales and transfers            |  |                       | 59,955 |   |        | 100 | % |          |   | 48,476 |   |  | 100 | % |  |   | 11,479 |   |  | 24  | % 
|Cost of goods sold                 |  |                       | 44,892 |   |        | 75  | % |          |   | 36,383 |   |  | 75  | % |  |   | 8,509  |   |  | 23  | % 
|                                   |  |                       |        |   |        |     |   |          |   |        |   |  |     |   |  |   |        |   |  |     |   
|Gross profit                       |  |                       | 15,063 |   |        | 25  | % |          |   | 12,093 |   |  | 25  | % |  |   | 2,970  |   |  | 25  | % 
|                                   |  |                       |        |   |        |    
|Selling and administrative         |  |                       | 8,297  |   |        | 14  | % |          |   | 7,996  |   |  | 17  | % |  |   | 301    |   |  | 4   | % 
|Gain on disposition of assets, net |  |                       | (34    | ) |        |    |   |          |   | (17    | ) |  |    |   |  |   | (17    | ) |  |    |   
|Amortization                       |  |                       |       |   |        |    |   |          |   | 19     |   |  |    |   |  |   | (19    | ) |  |    |   
|                                   |  |                       |        |   |        |     |   |          |   |        |   |  |     |   |  |   |        |   |  |     |   
|Operating income                   |  | $                     | 6,800  |   |        | 11  | % |          | $ | 4,095  |   |  | 8   | % |  | $ | 2,705  |   |  | 66  | % 
|                                   |  |                       |        |   |        |     |   |          |   |        |   |  |     |   |  |   |        |   |  |     |   

The following are financial highlights for Asia Pacific for fiscal 2008:



| |  |  | Excluding currency changes, net sales increased 20% during fiscal 2008. This increase occurred in all locations throughout the region due to increased shipment
volumes. The growth in sales also reflects the benefits of our initiative in China to produce a wider selection of products for sale in this region. Lift truck industry shipments in Asia Pacific increased 7% in fiscal 2008 compared to fiscal 2007.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage in Asia Pacific remained consistent at 25% during fiscal 2008. The benefits of sourcing lower cost product from China were offset by
increased sales of lower margin products during the current year.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of currency changes, selling and administrative costs decreased 1% in fiscal 2008, due to lower general costs. Overall costs were lower as a
percentage of sales in fiscal 2008.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

China



|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |        |   |  |     |  
|---------------------------------- |  | --------------------- | ------ | - | ------ | - | ---- | -------- | ------ |  | --- | - |  | - | ------ | - |  | --- | -
|                                   |  | Year Ended January 31 |        |   | Change |   |      | Change % |       
|                                   |  | 2008                  |        | % |        |   | 2007 |          | %      |  |     |  
|                                   |  | (In thousands)        |        |   |        |   |      |          |       
|Net sales                          |  | $                     | 40,030 |   | 70     | % |      | $        | 29,527 |  | 79  | % |  | $ | 10,503 |   |  | 36  | %
|Transfers between areas            |  |                       | 17,410 |   | 30     | % |      |          | 7,853  |  | 21  | % |  |   | 9,557  |   |  | 122 | %
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |        |   |  |     |  
|Net sales and transfers            |  |                       | 57,440 |   | 100    | % |      |          | 37,380 |  | 100 | % |  |   | 20,060 |   |  | 54  | %
|Cost of goods sold                 |  |                       | 38,805 |   | 68     | % |      |          | 24,944 |  | 67  | % |  |   | 13,861 |   |  | 56  | %
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |        |   |  |     |  
|Gross profit                       |  |                       | 18,635 |   | 32     | % |      |          | 12,436 |  | 33  | % |  |   | 6,199  |   |  | 50  | %
|                                   |  |                       |        |   |        |  
|Selling and administrative         |  |                       | 3,927  |   | 6      | % |      |          | 3,042  |  | 8   | % |  |   | 885    |   |  | 29  | %
|Loss on disposition of assets, net |  |                       | 48     |   |       |   |      |          | 37     |  |    |   |  |   | 11     |   |  |    |  
|Amortization                       |  |                       |       |   |       |   |      |          | 4      |  |    |   |  |   | (4     | ) |  |    |  
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |        |   |  |     |  
|Operating income                   |  | $                     | 14,660 |   | 26     | % |      | $        | 9,353  |  | 25  | % |  | $ | 5,307  |   |  | 57  | %
|                                   |  |                       |        |   |        |   |      |          |        |  |     |   |  |   |        |   |  |     |  

The following are financial highlights for China for fiscal 2008:



| |  |  | During fiscal 2008, net sales increased 31%, excluding the impact of currency changes. Our capital expansion plan in China has increased our capabilities to
manufacture a larger volume of products, resulting in increased sales. Lift truck industry shipments in China increased 26% in fiscal 2008.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



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##### Table of Contents



| |  |  | Transfers to other Cascade geographic areas, including Asia Pacific and Europe, increased 122% during fiscal 2008, due to the expansion of operations in China.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The current year gross profit percentage decreased to 32% from 33% during fiscal 2007 due to changes in product mix and increased intercompany transfers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling and administrative costs increased 24%, excluding currency changes during fiscal 2008 due to additional costs to support our expanded operations in China.
As a percentage of net sales and transfers, selling and administrative costs decreased in fiscal 2008.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Items

The following are financial highlights for non-operating items during fiscal 2008:



| |  |  | Interest expense, net of interest income, increased $2.9 million during fiscal 2008 due to additional borrowings to fund various initiatives, including our share
repurchase program and our acquisition of American Compaction Equipment, Inc.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other expense during fiscal 2008 was comprised primarily of foreign currency losses, which were the result of stronger foreign currencies compared to the U.S.
dollar. During fiscal 2008 the value of the Euro and Canadian dollar increased 14% and 17% against the U.S. dollar.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our effective tax rate remained consistent at 34%.
| | - |  | --------------------------------------------------

CASH FLOWS

The statements of cash flows reflect the changes in cash and cash equivalents for the
three years ended January 31, 2009 by classifying transactions into three major categories of activities: operating, investing and financing.

Our overall balance of cash and cash equivalents was $31 million at January 31, 2009 including $15.7 million in China. We would expect our balance of cash and cash equivalents for ongoing operations to remain at approximately the $20
million level for the foreseeable future. Legal restrictions and tax consequences in certain jurisdictions can limit our ability to repatriate cash to the United States. Certain transactions could result in negative tax consequences.

The following table presents net changes in cash and cash equivalents for the three years ended January 31, 2009.



|                                |  |                       |         |   |      |   |         |      |  |   |         |  
|------------------------------- |  | --------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                |  | Year Ended January 31 |        
|                                |  | 2009                  |         |   | 2008 |   |         | 2007 | 
|                                |  | (In thousands)        |        
|Operating activities            |  | $                     | 41,086  |   |      | $ | 53,326  |      |  | $ | 57,109  |  
|Investing activities            |  |                       | (16,134 | ) |      |   | (31,627 | )    |  |   | (33,582 | )
|Financing activities            |  |                       | (20,382 | ) |      |   | (33,432 | )    |  |   | (22,153 | )
|Effect of exchange rate changes |  |                       | 5,392   |   |      |   | (3,637  | )    |  |   | (274    | )
|                                |  |                       |         |   |      |   |         |      |  |   |         |  
|Net change in cash              |  | $                     | 9,962   |   |      | $ | (15,370 | )    |  | $ | 1,100   |  
|                                |  |                       |         |   |      |   |         |      |  |   |         |  

Operating

Our main source of liquidity is cash generated from operating activities. The major operating activity is net income adjusted for non-cash operating items such as loss on asset impairment, depreciation, amortization,
share-based compensation and changes in working capital.

The following are operating activity highlights for fiscal 2009:



| |  |  | Net cash provided by operating activities decreased $12.3 million during fiscal 2009 compared to fiscal 2008.
| | - |  | -------------------------------------------------------------------------------------------------------------



27



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| |  |  | Lower net income in fiscal 2009, as a result of lower sales and gross profit along with the insurance settlement recognized in the prior year, were the primary
reasons for the decrease.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2009, accounts receivable decreased $21.4 million compared to an increase of $9.8 million in the prior year. The decrease in the current year is
primarily due to lower sales.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Inventories increased during the current year by $16 million, compared with $19.5 million in the prior year. Overall our inventory in fiscal 2009 has continued to
increase primarily as a result of increasing material costs, additional inventories of product produced in China and additional material purchases made in advance of price increases. We expect inventory balances to decrease in fiscal 2010 but at a
slower rate due to lower sales levels.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the current year, accounts payable decreased $13.8 million compared to an increase of $3.7 million in the prior year. The decrease in the current year is due
to decreased product demand and the elimination of most advance purchases of inventory.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following are operating
activity highlights for fiscal 2008:



| |  |  | Net cash provided by operating activities decreased $3.8 million during fiscal 2008.
| | - |  | ------------------------------------------------------------------------------------



| |  |  | Net income during fiscal 2008 was significantly higher due to the insurance settlement.
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | Accounts receivable increased during fiscal 2008 by $9.8 million, compared to $3.9 million in fiscal 2007. This increase was a result of higher sales volumes.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Inventories increased during fiscal 2008 by $19.5 million, compared with a $2.9 million decrease in fiscal 2007. This increase was a result of higher sales volumes.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investing

During
the three years ended January 31, 2009, our investing activities consisted primarily of capital expenditures, business acquisitions and the sale and purchase of marketable securities.

Capital expenditures are primarily for equipment and tooling related to product improvements, more efficient production methods and replacement for normal
wear and tear. Capital expenditures by geographic segment were as follows (in thousands):



|              |  |                       |        |      |   |        |  |   |       
|------------- |  | --------------------- | ------ | ---- | - | ------ |  | - | ------
|              |  | Year Ended January 31
|              |  | 2009                  |        | 2008 |   | 2007  
|North America |  | $                     | 6,646  |      | $ | 7,986  |  | $ | 6,174 
|Europe        |  |                       | 4,415  |      |   | 4,439  |  |   | 2,469 
|Asia Pacific  |  |                       | 2,796  |      |   | 5,302  |  |   | 481   
|China         |  |                       | 2,852  |      |   | 5,081  |  |   | 8,954 
|              |  |                       |        |      |   |        |  |   |       
|              |  | $                     | 16,709 |      | $ | 22,808 |  | $ | 18,078
|              |  |                       |        |      |   |        |  |   |       

The following are capital expenditures highlights during the three years ended January 31,
2009:



| |  |  | Capital expenditures in North America decreased during fiscal 2009. The majority of the capital expenditures made during 2009 relate to equipment and tooling
replacements.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Capital expenditures in Europe during fiscal 2009 were consistent with the prior year. Expenditures during the current year related primarily to costs for equipment
associated with the planned introduction of new products and more efficient production methods.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2009 we completed renovations on our sales/distribution facility in Korea at a cost of $827,000.
| | - |  | --------------------------------------------------------------------------------------------------------------



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| |  |  | During fiscal 2008 we purchased a new sales/distribution facility in Japan for $4.2 million. Additional expenditures of $1.6 million were made during fiscal 2009.
We moved to our new facility during fiscal 2009.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Capital expenditures in China in fiscal 2008 related primarily to the completion of two manufacturing facilities. Capital expenditures in China in fiscal 2009
related to equipment upgrades and completion of a building to manufacture construction attachments.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We completed the
following acquisitions during the three years ended January 31, 2009:



| |  |  | During fiscal 2008, we purchased American Compaction Equipment, Inc, a manufacturer of construction attachments located in San Juan Capistrano, California. The
total purchase price was approximately $11.5 million, net of assumed liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2007, we purchased the assets of Pacific Services and Manufacturing, Inc., a manufacturer of construction attachments located in Woodinville,
Washington. The total purchase price was approximately $40.3 million, net of assumed liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We held no marketable
securities at January 31, 2009, 2008 and 2007.

Financing

The following were major financing activities during the three years ended January 31, 2009:



| |  |  | Net borrowings against our line of credit were $96 million, $104 million and $34 million as of January 31, 2009, 2008, and 2007 respectively. The increase in
our line of credit borrowing was primarily a result of our share repurchase program.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We concluded our share repurchase program at the beginning of the first quarter of fiscal 2009. In total, we repurchased 2,435,000 shares of common stock for $130
million over 18 months.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We declared dividends of $0.78, $0.70 and $0.61 per share in fiscal 2009, 2008, and 2007, respectively.
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | The issuance of common stock related to the exercise of share-based awards generated $130,000, $3.8 million and $3.4 million of cash in fiscal 2009, 2008 and 2007,
respectively.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

FINANCIAL CONDITION AND LIQUIDITY

Working capital, defined as current assets less current liabilities, at January 31, 2009 was $162 million as compared to $152 million at
January 31, 2008. Our current ratio, defined as current assets divided by current liabilities, at January 31, 2009 was 4.7 to 1 in comparison to 3.4 to 1 at January 31, 2008. The increase in working capital in fiscal 2009 is a result
of additional cash and cash equivalents and inventories as well as a reduction in accounts payable and accrued expenses. These changes were offset by a drop in accounts receivable at the end of the year due to lower sales volumes.

Total outstanding debt, including notes payable to banks, at January 31, 2009 was $103 million in comparison with $111 million at January 31,
2008. During fiscal 2009 we completed our share repurchase program, in the first quarter, and used available cash to paydown long-term debt. We intend to continue to use cash generated from operations to further reduce outstanding debt balances.

Our revolving line of credit currently in place with Bank of America and Union Bank of California provides available borrowings totaling
$145 million at January 31, 2009, with available borrowings decreasing by $1.25 million each quarter through December 2011. As of January 31, 2009, we had outstanding borrowings of $96 million, with an additional $2.3 million committed
through the issuance of letters of credit.



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Our line of credit agreement
contains the following financial covenants, which are calculated quarterly based on actual results for the previous twelve months:

Fixed
charge coverage ratiorequires earnings before interest, taxes, depreciation, amortization and other non-cash charges (EBITDA), adjusted for cash taxes paid, capital expenditures and cash dividends, to exceed required debt service payments,
principal and interest on outstanding debt by 1.5 times. Actual fixed charge coverage ratio at January 31, 2009 was 7.6.

Leverage
ratiorequires outstanding debt and letters of credit to be less than three times EBITDA. Actual leverage ratio at January 31, 2009 is 1.4.

Continued compliance with our financial covenants is contingent upon the following:



| |  |  | Generating cash from operations
| | - |  | -------------------------------



| |  |  | Monitoring levels of capital expenditures
| | - |  | -----------------------------------------



| |  |  | Using available cash to reduce our outstanding debt
| | - |  | ---------------------------------------------------

We have various notes payable to banks, totaling $2.3 million at January 31, 2009. Average interest rates on these notes were 2.6% at January 31, 2009 and 4.3% at January 31, 2008.

We believe our cash and cash equivalents, existing credit facilities and cash flows from operations will be sufficient to satisfy our expected working
capital, capital expenditure and debt service requirements for fiscal 2010.

On March 31, 2009 our Board of Directors approved a
dividend of $.05 per share, which is a 75% reduction from our prior dividend level. During current economic times, the board felt it was prudent to use this cash to reduce outstanding debt.

OTHER MATTERS

Defined Benefit Pension Plans

We maintain defined benefit pension plans in England and France covering certain employees. We calculate the liability and net periodic pension costs
related to our defined benefit plans on an annual basis. The following are highlights of these defined benefit pension plans:



| |  |  | Our projected benefit obligation for defined benefit pension plans was $6.2 million at January 31, 2009 compared to $10.3 million as of January 31, 2008.
The change is a result of an increase in the discount rate and fluctuations in foreign currencies.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The allocation of assets in our pension plan in England at January 31, 2009 is comprised of equities (44%), debt (44%), cash (9%) and real estate (3%).
Equity includes domestic and international equity securities, such as common, preferred or other capital stock, as well as mutual funds. Debt includes domestic and international debt securities, such as U.S. and other foreign government securities,
corporate bonds and commercial paper.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The unfunded pension liability, net of plan assets, was $1 million and $2.3 million as of January 31, 2009 and 2008, respectively. The change is a result of
decreased obligations, partially offset by a decrease in the value of plan assets due to the financial market downturn.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During March 2009 we agreed to fund the pension plan in England annually through fiscal 2016. Our expected cash contribution in fiscal 2010 is $300,000.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

Postretirement Health Care Plan

We maintain a postretirement health care benefit plan in the United States that provides health care coverage for approximately 150 eligible retirees and qualifying dependents. Another 100 current employees, all over
54



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years of age, will be eligible to participate upon retirement. No additional employees will be eligible to participate in the plan. We calculate the
liability and net periodic cost related to this health care plan on an annual basis. The following are highlights of the postretirement plan:



| |  |  | The postretirement plan is currently unfunded with an accumulated postretirement benefit obligation of $7.1 million at January 31, 2009 and 2008.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Due to the continued trend of increasing health care costs, the overall cost of the plan may continue to rise in future years. We will continue to investigate
various options to mitigate future cost increases.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We currently fund this plan on a pay-as-you-go basis. Annual cash contributions represent gross benefit payments less required retiree contributions and the
medicare subsidy. Our expected cash contribution in fiscal 2010 is $370,000.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Environmental Matters

We are engaged in ongoing environmental remediation efforts at our Fairview, Oregon and Springfield, Ohio manufacturing facilities. Current estimates
provide for some level of remediation activities in Fairview through 2019 and Springfield through 2014. Costs of certain remediation activities at the Fairview facility are shared with The Boeing Company, with Cascade paying 70% of actual
remediation costs. The following are highlights of environmental matters:



| |  |  | The environmental liability is $4.6 million and $5.7 million as of January 31, 2009 and 2008, respectively. The decrease was due to payments during fiscal 2009
for activities at both the Fairview and Springfield sites. No other adjustments to the liability were deemed necessary.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We expect our cash payments for environmental matters during fiscal 2010 to be approximately $827,000.
| | - |  | ------------------------------------------------------------------------------------------------------

Contractual Obligations and Commitments

The
following summarizes our contractual obligations and commitments as of January 31, 2009:



|                                       |  |                            |         |      |   |             |  |             |         |            |   |       |  |   |       
|-------------------------------------- |  | -------------------------- | ------- | ---- | - | ----------- |  | ----------- | ------- | ---------- | - | ----- |  | - | ------
|                                       |  | Payment due by fiscal year
|                                       |  | Total                      |         | 2010 |   | 2011 - 2012 |  | 2013 - 2014 |         | After 2014
|                                       |  | (In thousands)            
|Notes payable to banks                 |  | $                          | 2,255   |      | $ | 2,255       |  | $           |        |            | $ |      |  | $ |      
|Long-term debt                         |  |                            | 100,508 |      |   | 501         |  |             | 97,002  |            |   | 1,002 |  |   | 2,003 
|Estimated interest payments(1)         |  |                            | 5,358   |      |   | 1,831       |  |             | 3,310   |            |   | 120   |  |   | 97    
|Operating leases                       |  |                            | 5,518   |      |   | 2,661       |  |             | 2,798   |            |   | 59    |  |   |      
|Environmental payments                 |  |                            | 4,575   |      |   | 827         |  |             | 1,440   |            |   | 1,071 |  |   | 1,237 
|Defined benefit pension obligations(2) |  |                            | 6,154   |      |   | 490         |  |             | 1,061   |            |   | 1,006 |  |   | 3,597 
|Postretirement benefit obligation(3)   |  |                            | 7,117   |      |   | 373         |  |             | 889     |            |   | 1,021 |  |   | 4,834 
|                                       |  |                            |         |      |   |             |  |             |         |            |   |       |  |   |       
|Total(4)                               |  | $                          | 131,485 |      | $ | 8,938       |  | $           | 106,500 |            | $ | 4,279 |  | $ | 11,768
|                                       |  |                            |         |      |   |             |  |             |         |            |   |       |  |   |       



|(1) | Interest payments on the line of credit are calculated using an interest rate of 1.77% and an outstanding debt balance as of January 31, 2009 through the maturity date.
Interest payments on the note payable in Japan are calculated using an interest rate of 2.39% and assumes monthly principal payments through fiscal 2018. Interest payments on notes payable to banks are calculated using an average interest rate of
2.64% at January 31, 2009 and assumes paydown of debt as of July 31, 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Represents committed and current minimum funding requirements for all plans. The total payments due in the future may vary from these estimates based on actual returns on plan
assets, changes in assumptions, plan modifications and actuarial gains and losses.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(3) | Payments represent gross benefit payments less required retiree contributions and the medicare subsidy. The total payments due in the future may vary from these estimates based on
changes in assumptions, plan modifications and actuarial gains and losses.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | We have omitted FIN48 liabilities from the contractual obligations and commitments table as amounts are immaterial.
|--- | -------------------------------------------------------------------------------------------------------------------

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Managements discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the
United States of America (GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities. We evaluate our estimates and judgments on an on-going basis, including those related to uncollectible receivables, inventories, impairment of goodwill, warranty obligations, environmental liabilities, benefit plans, share-based
compensation and deferred taxes. We base our estimates on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions
or conditions. We believe the following critical accounting policies reflect our more significant judgments and estimates in the preparation of our consolidated financial statements.

Allowances for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated
losses on accounts receivable resulting from the inability of customers to make required payments. Such allowances are based on an ongoing review of customer payments against terms and a review of customer financial statements and financial
information. If the financial condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventory Reserves

Inventories are stated at the lower of cost or market. We maintain
reserves to write down our inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value, less costs to sell, based upon assumptions about future demand and market
conditions. If actual future demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required, which would result in cost of goods sold in the consolidated statements of income being
greater than expected in the period in which more information becomes available.

Impairment of Long-Lived Assets

Long-lived assets, excluding goodwill, are reviewed for impairment in accordance with SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from
the use of the assets and eventual disposition in comparison with the carrying value. An estimate of future sales, gross margins and selling and administrative expenses are used to calculate future cash flows. The fair value of each asset is
calculated using a cash flow methodology based on these assumptions. An impairment of a long-lived asset exists when the carrying value of an asset exceeds its fair value.

See Impairment of Goodwill below for details relating to our impairment test of goodwill and long-lived assets at January 31, 2009.



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Impairment of Goodwill

Goodwill represents the excess of the cost of acquired businesses over the fair value of the net identifiable assets acquired. We
review goodwill for impairment in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, either annually or when events or changes in circumstances indicate the carrying value of the assets might exceed their current
fair values. The review is performed for our reporting units, which include North America, Europe, Australia and our construction attachment business in North America. Certain factors we consider important that could trigger an impairment review at
an interim date outside of the annual review, include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or our overall
business and significant industry or economic trends.

The impairment review is based on a discounted projected cash flow model that uses
estimates of future sales, sales growth rates, gross profits, expense and capital expenditure levels, a discount rate and estimated terminal values to determine the fair value of the operating entities should an impairment exist. We use a weighted
average cost of capital (WACC) to discount future cash flows for goodwill impairment tests. The WACC is the expected rate of return based on an industry specific debt and equity capital structure and cost of debt, adjusted for geographic and company
size specific factors. The WACC can vary by reporting unit. WACC used in our impairment test at January 31, 2009 ranged from 13.7% to 16.5%. Changes in these and other factors could result in impairments in the carrying value of goodwill, which
would require a writedown to the assets fair value. If actual results are not consistent with our assumptions and judgments, we could be exposed to a material impairment charge.

We entered the North American construction attachment business in late fiscal 2007. We believed this business was a key component to our long-term growth
strategy. The decline of housing related construction in late fiscal 2008 eventually led to a significant decline throughout the construction industry. Currently the construction industry is experiencing its biggest downturn in over 30 years. While
we have made several improvements to our construction business to make us more competitive, we continued to incur increasing operating losses through the fourth quarter of fiscal 2009. During fiscal 2009 we recorded sales in our construction
business of $11.7 million and a pre-tax loss of $4.9 million. Comparatively, we recorded sales of $19.7 million and a pre-tax loss of $1.1 million during fiscal 2008. Ongoing weak levels of construction activity, underscored by the negative effects
of the prolonged U.S. recession, prompted a reevaluation at January 31, 2009 of the recorded value of this business in comparison with its estimated fair value.

As a result of this reevaluation we completed an impairment test and determined the carrying value of goodwill and long-lived assets in our North American construction business exceeded the estimated fair value,
resulting in a $46.4 million impairment charge. All of the goodwill related to our construction business was written off. The non-cash charge does not impact our normal business operations, liquidity, cash flow or compliance with debt covenants. The
components of the impairment charge include the following (in thousands):



|                       |  |   |       
|---------------------- |  | - | ------
|Goodwill               |  | $ | 29,157
|Customer relationships |  |   | 13,269
|Intellectual property  |  |   | 3,950 
|                       |  |   |       
|                       |  | $ | 46,376
|                       |  |   |       

Our goodwill impairment test for Europe assumes future operating results will reflect the benefits
of our work to reorganize and restructure this business to improve our financial performance. If the results of this work fall short of the assumptions used in our discounted projected cash flows, an additional impairment charge for our goodwill in
Europe may be required.

Changes in certain market and economic factors, such as the fluctuation in the market price of our stock, could
trigger an impairment review at an interim date outside of the annual review. This test could result in additional impairment charges for a portion or all of the $74 million of goodwill recorded on our consolidated balance sheet at January 31,
2009.



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Warranty Obligations

We offer certain warranties with the sale of our products, which generally range from six months to one year. The warranty
obligation is recorded as a liability on the balance sheet and is estimated through historical customer claims, product failure rates, material usage and service delivery costs incurred in correcting a product failure. Changes in these factors and
statutory requirements for product warranties in markets in which we sell our products may require an adjustment to the recorded warranty obligations.

Environmental Liabilities

We accrue environmental remediation and litigation costs if it is probable a liability has
been incurred at the financial statement date and the amount can be reasonably estimated. Our liability for environmental costs, other than for costs of assessments themselves, are generally determined after the completion of investigations and
studies and are based on the estimated cost of remediation activities we are then required to undertake. The gross liability is based on our best estimate of undiscounted future costs using currently available technology and applying current
regulations, as well as our own historical experience regarding environmental cleanup costs. The reliability and precision of the estimates are affected by numerous factors, such as site evaluation and reevaluation of the degree of remediation
required, claims by third parties and changes to environmental laws and regulations. We adjust our liabilities as new remediation requirements are defined, as information becomes available permitting reasonable estimates to be made and to reflect
new facts.

Benefit Plans

We
make a number of assumptions with regard to both future financial conditions and future actions by plan participants to calculate on an actuarial basis the amount of income or expense and assets and liabilities recognized in association with our
defined benefit and postretirement benefit plans. These assumptions include the expected return on plan assets, discount rates, expected increases in compensation levels, health care cost trend rates and expected rates of retirement and life
expectancy for plan participants. We review the assumptions on an annual basis and make changes to reflect market conditions and the administration of the plans. While we believe the current assumptions are appropriate in the circumstances, actual
results and changes in these assumptions in the future will result in adjustments that could impact the income or expense recognized in future years in relation to these plans.

The assumed rate of return on plan assets for our defined benefit plans is evaluated on an annual basis. We select the assumed rate of return based on
information considering historical returns, our current and target asset allocation and the expected returns by asset class. We believe this assumption is reasonable given the asset composition and long-term historic trends. Our discount rate
reflects the rate at which the pension benefits could be effectively settled. We increased our discount rate assumption to determine the January 31, 2009 liability to 6.9% from 5.8% at January 31, 2008 due to the market increases in
interest rates during the year. Our most significant defined benefit plan is in England so interest rates on high-quality corporate bonds in that market have more influence on the overall discount rate.



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Our discount rate, used to
determine the liability for our postretirement plan, increased to 6.5% at January 31, 2009 from the discount rate of 6.25% at January 31, 2008. We determine our discount rate using a yield curve expected benefit payment
methodology. This methodology uses individual curve rates to discount each future years expected plan benefit payments. We select our health care cost trend rates based on recent plan experience and expectations about future increases in plan
costs. We assume health care costs in fiscal 2009 will increase by 8.5% and future increases will decline by 0.5% per year until 4.5% is reached in 2017. The following presents the sensitivity of the key postretirement plan assumptions (in
thousands):



|                                                                                       |  |          |    
|-------------------------------------------------------------------------------------- |  | -------- | ---
|                                                                                       |  | Increase
|The following presents the sensitivity of a 1% decrease in the discount rate:          |  |          |    
|Effect on net periodic benefit cost                                                    |  | $        | 78 
|Effect on postretirement benefit obligation                                            |  | $        | 827
|                                                                                       | 
|The following presents the sensitivity of a 1% increase in the health care cost trend: |  |          |    
|Effect on net periodic benefit cost                                                    |  | $        | 163
|Effect on postretirement benefit obligation                                            |  | $        | 853

Share-based Compensation

We account for share-based compensation, for which we receive employee services in exchange for our equity instruments, using a fair value method.
Share-based compensation cost is measured at the grant date based on the value of the award and is recognized as a corporate headquarters expense in North America over the service period the award is expected to vest. Determining the fair value of
share-based awards at the grant date requires judgment, including estimating the expected term of stock awards, the expected volatility of our common stock and expected dividends. In addition, judgment is also required in estimating the amount of
share-based awards that are expected to be forfeited. We consider many factors when estimating expected forfeitures, including types of awards, award recipient class and historical experience. Significant changes in the assumptions for future awards
and actual forfeiture rates could materially impact share-based compensation expense and our results of operations. Subsequent changes in forfeiture rates will be recorded as a cumulative adjustment in the period estimates are revised. See Note 12
to the Consolidated Financial Statements (Item 8) for further discussion of our share-based awards and the related accounting treatment.

Deferred
Taxes

Our provision for income taxes and the determination of the resulting deferred tax assets and liabilities involves a
significant amount of management judgment. We are subject to taxation from federal, state and international jurisdictions. The taxes paid to these jurisdictions are subject to audit, although to date the results of any tax audits have been minor.

Judgment is also applied in determining whether deferred tax assets will be realized in full or in part. We record a valuation allowance to
reduce our deferred tax assets when it is more likely than not that all or some portion of specific deferred tax assets, such as foreign tax credit carryovers or net operating loss carryforwards, will not be realized. We have recorded on our
consolidated balance sheets a valuation allowance against various deferred tax assets. We consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In the event we were
to determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged against income in the period such determination was made. Likewise, should we
determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax assets would increase income in the period such determination was made. We continually evaluate
strategies that could allow for the future utilization of our deferred tax assets.



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OFF BALANCE SHEET
ARRANGEMENTS

At January 31, 2009 and 2008, we did not have any relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited
purposes. As such, we are not exposed to any financing, liquidity market or credit risk that could arise if we had engaged in such relationships.

RECENT ACCOUNTING PRONOUNCEMENTS

SFAS 157In September 2006, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 provides a common definition of fair value, establishes a framework for measuring fair
value and expands the related disclosure requirements. In February 2008, the FASB issued final Staff Positions that will (1) defer the effective date of this statement for one year for certain nonfinancial assets and nonfinancial liabilities
and (2) remove certain leasing transactions from the scope of the statement. We applied SFAS 157 to all other fair value measurements effective February 1, 2008. The adoption of SFAS 157 did not have a material impact on our financial
statements.

FSP 157-2In February 2008, the FASB issued FASB Staff Position on Statement 157, Effective Date of FASB
Statement No. 157 (FSP 157-2). FSP 157-2 delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed on a recurring basis, to fiscal years beginning after
November 15, 2008. Our significant nonfinancial assets and liabilities that could be impacted by this deferral include assets and liabilities initially measured at fair value in a business combination and goodwill tested annually for
impairment. FSP 157-2 will become effective for the fiscal year beginning February 1, 2009. We are currently evaluating the impact of the adoption of FSP 157-2 on our financial statements.

FSP 157-3In October 2008, the FASB issued FASB Staff Position No. 157-3 Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active (FSP 157-3). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial
asset when the market for that financial asset is not active. FSP 157-3 was effective upon issuance. We adopted FSP 157-3 for the period ended October 31, 2008. The adoption did not have a material impact on our financial statements.

SFAS 159In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for Financial Assets
and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS 159 allows companies the choice to measure many financial instruments and certain other items at fair value. Application of SFAS 159 was required for
our financial statements beginning February 1, 2008. The adoption of SFAS 159 did not have a material impact on our financial statements.

SFAS 141(R) & SFAS 160In December 2007, the FASB issued SFAS No. 141(R) (SFAS 141(R)), Business Combinations, and SFAS No. 160 (SFAS 160), Noncontrolling Interests in Consolidated Financial
Statements, an amendment of ARB No. 51. SFAS 141(R) requires the acquiring entity in a business combination to recognize the assets acquired and liabilities assumed. Further, SFAS 141(R) also changes the accounting for acquired in-process
research and development assets, contingent consideration, partial acquisitions and transaction costs. Under SFAS 160, all entities are required to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated
financial statements. In addition, transactions between an entity and noncontrolling interests will be treated as equity transactions. SFAS 141(R) and SFAS 160 will become effective for business combinations for which the acquisition date is on or
after February 1, 2009.

SFAS 161In March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about
Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133. SFAS 161 expands disclosures for derivative instruments by requiring entities to disclose the fair value of derivative instruments and their
gains or losses in tabular format. SFAS 161 also requires disclosure of information about credit risk-related



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contingent features in derivative agreements, counterparty credit risk, and strategies and objectives for using derivative instruments. SFAS 161 will
become effective for fiscal years beginning after November 15, 2008. We will adopt this new accounting standard on February 1, 2009. We are currently evaluating the impact of the adoption of this standard on our financial
statements.

SFAS 162In May 2008, the FASB issuedSFAS No. 162 (SFAS 162), The Hierarchy of
Generally Accepted Accounting Principles. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles in the United States. SFAS 162 will become effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411,
The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not expect any changes to our financial accounting and reporting as a result of the adoption of this standard.



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

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency exchange rate and interest rate fluctuations. A significant portion of our net sales are denominated in currencies from
international markets outside the United States. As a result, our operating results could become subject to significant fluctuations based upon changes in the exchange rates of the foreign currencies in relation to the United States dollar.

The table below illustrates the hypothetical increase or decrease in fiscal 2009 net sales of a 10% change in the U.S. dollar against
foreign currencies which impact our operations (in millions):



|                                                             |  |   |     
|------------------------------------------------------------ |  | - | ----
|Euro                                                         |  | $ | 13.2
|Chinese yuan                                                 |  |   | 4.1 
|British pound                                                |  |   | 3.1 
|Japanese yen                                                 |  |   | 2.9 
|Canadian dollar                                              |  |   | 2.5 
|Other currencies (representing 8% of consolidated net sales) |  |   | 4.4 

We enter into foreign currency forward exchange contracts to offset the impact of currency
fluctuations on certain nonfunctional currency assets and liabilities. The principal currencies hedged are denominated in Japanese yen, Canadian dollars, Euros, Swedish Krona, Korean Won, Chinese Yuan and British pounds. Our foreign currency forward
exchange contracts have terms lasting up to six months, but generally less than one month. We do not enter into derivatives or other financial instruments for trading or speculative purposes. See Note 17 to the Consolidated Financial Statements
(Item 8).

A majority of our products are manufactured using specialty steel. As such, our cost of goods sold is sensitive to fluctuations
in specialty steel prices, either directly through the purchase of raw materials or indirectly through the purchase of components. However, due to the nature of specialty steel, we are not impacted by changes in commodity steel prices to the extent
others might be.

Presuming that the full impact of steel price increases is reflected in all steel and steel based component purchases, we
estimate our gross profit percentage would decrease by approximately 0.4% for each 1.0% increase in steel prices. Based on our statement of income for the year ended January 31, 2009, a 1.0% increase in steel prices would have decreased
consolidated gross profit by approximately $1.9 million.



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During fiscal 2009, we
continued to experience some increases in prices for steel and steel components, which comprise approximately 50% of our total product cost. We have continued to move aggressively to offset these increases through a variety of means, including sales
price increases, cost reduction activities and alternative sourcing arrangements. In general we were more successful in North America, China and Asia Pacific in realizing some of the benefits of these mitigating measures. In Europe the measures have
not been as successful, resulting in some erosion of gross profit for certain products.

The majority of our debt as of January 31,
2009 has a variable interest rate, which is currently based on LIBOR plus a margin of 1%. During fiscal 2009 our interest rate on our debt fluctuated between 1% and 6% due to fluctuations in the LIBOR rate. Based on the outstanding balance of our
variable rate debt at January 31, 2009, a 1% increase in our interest rate would result in a $960,000 increase in annual interest expense.



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

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Cascade Corporation

In our opinion, the consolidated financial statements listed in the index appearing under
Item 15(a)(1) present fairly, in all material respects, the financial position of Cascade Corporation and its subsidiaries at January 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years
in the period ended January 31, 2009 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the appendix appearing under
Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of January 31, 2009, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Companys management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control
over financial reporting, included in the accompanying Managements Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the
Companys internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the
financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis
for our opinions.

As discussed in Note 2, to the consolidated financial statements, the Company changed the manner in which it accounts for
defined benefit pension and other post retirement plans effective January 31, 2007.

A companys internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the companys assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers LLP

Portland, Oregon

April 6, 2009



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Cascade Corporation

Consolidated Statements of Income



|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|------------------------------------------- |  | ---------------------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                            |  | Year Ended January 31                    |        
|                                            |  | 2009                                     |         |   | 2008 |   |         | 2007 | 
|                                            |  | (In thousands, except per share amounts) |        
|Net sales                                   |  | $                                        | 534,172 |   |      | $ | 558,073 |      |  | $ | 478,850 |  
|Cost of goods sold                          |  |                                          | 385,624 |   |      |   | 386,899 |      |  |   | 328,870 |  
|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|Gross profit                                |  |                                          | 148,548 |   |      |   | 171,174 |      |  |   | 149,980 |  
|                                            |  |                                          |        
|Selling and administrative expenses         |  |                                          | 85,229  |   |      |   | 89,445  |      |  |   | 80,709  |  
|Loss (gain) on disposition of assets, net   |  |                                          | 403     |   |      |   | (1,121  | )    |  |   | (552    | )
|Amortization                                |  |                                          | 2,519   |   |      |   | 3,214   |      |  |   | 1,472   |  
|Asset impairment charge                     |  |                                          | 46,376  |   |      |   |        |      |  |   |        |  
|European restructuring costs                |  |                                          | 2,544   |   |      |   |        |      |  |   |        |  
|Insurance litigation recovery, net          |  |                                          |        |   |      |   | (15,977 | )    |  |   |        |  
|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|Operating income                            |  |                                          | 11,477  |   |      |   | 95,613  |      |  |   | 68,351  |  
|Interest expense                            |  |                                          | 4,083   |   |      |   | 4,094   |      |  |   | 2,294   |  
|Interest income                             |  |                                          | (608    | ) |      |   | (779    | )    |  |   | (1,894  | )
|Foreign currency losses, net                |  |                                          | 3,611   |   |      |   | 1,460   |      |  |   | (1,304  | )
|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|Income before provision for income taxes    |  |                                          | 4,391   |   |      |   | 90,838  |      |  |   | 69,255  |  
|Provision for income taxes                  |  |                                          | 3,124   |   |      |   | 30,691  |      |  |   | 23,774  |  
|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|Net income                                  |  | $                                        | 1,267   |   |      | $ | 60,147  |      |  | $ | 45,481  |  
|                                            |  |                                          |         |   |      |   |         |      |  |   |         |  
|Basic earnings per share                    |  | $                                        | 0.12    |   |      | $ | 5.08    |      |  | $ | 3.64    |  
|Diluted earnings per share                  |  | $                                        | 0.11    |   |      | $ | 4.88    |      |  | $ | 3.48    |  
|                                            |  |                                          |        
|Basic weighted average shares outstanding   |  |                                          | 10,794  |   |      |   | 11,841  |      |  |   | 12,505  |  
|Diluted weighted average shares outstanding |  |                                          | 11,077  |   |      |   | 12,333  |      |  |   | 13,071  |  

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



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Cascade Corporation

Consolidated Balance Sheets



|                                                                                                        |  |                                         |         |      |   |        
|------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------- | ---- | - | -------
|                                                                                                        |  | As of January 31                       
|                                                                                                        |  | 2009                                    |         | 2008
|                                                                                                        |  | (In thousands, exceptper share amounts)
|ASSETS                                                                                                  |  |                                         |         |      |   |        
|Current assets:                                                                                         |  |                                         |         |      |   |        
|Cash and cash equivalents                                                                               |  | $                                       | 31,185  |      | $ | 21,223 
|Accounts receivable, less allowance for doubtful accounts of $1,441 and $1,623                          |  |                                         | 64,568  |      |   | 93,117 
|Inventories                                                                                             |  |                                         | 90,806  |      |   | 85,049 
|Deferred income taxes                                                                                   |  |                                         | 4,712   |      |   | 6,213  
|Prepaid expenses and other                                                                              |  |                                         | 13,603  |      |   | 10,887 
|                                                                                                        |  |                                         |         |      |   |        
|Total current assets                                                                                    |  |                                         | 204,874 |      |   | 216,489
|Property, plant and equipment, net                                                                      |  |                                         | 93,826  |      |   | 98,350 
|Goodwill                                                                                                |  |                                         | 74,387  |      |   | 118,826
|Deferred income taxes                                                                                   |  |                                         | 21,347  |      |   | 5,948  
|Intangible assets, net                                                                                  |  |                                         | 1,151   |      |   | 20,916 
|Other assets                                                                                            |  |                                         | 1,998   |      |   | 1,971  
|                                                                                                        |  |                                         |         |      |   |        
|Total assets                                                                                            |  | $                                       | 397,583 |      | $ | 462,500
|                                                                                                        |  |                                         |         |      |   |        
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                    |  |                                         |         |      |   |        
|Current liabilities:                                                                                    |  |                                         |         |      |   |        
|Notes payable to banks                                                                                  |  | $                                       | 2,255   |      | $ | 2,484  
|Current portion of long-term debt                                                                       |  |                                         | 501     |      |   | 423    
|Accounts payable                                                                                        |  |                                         | 19,704  |      |   | 32,727 
|Accrued payroll and payroll taxes                                                                       |  |                                         | 8,504   |      |   | 10,148 
|Other accrued expenses                                                                                  |  |                                         | 12,192  |      |   | 18,736 
|                                                                                                        |  |                                         |         |      |   |        
|Total current liabilities                                                                               |  |                                         | 43,156  |      |   | 64,518 
|Long-term debt, net of current portion                                                                  |  |                                         | 100,007 |      |   | 107,809
|Accrued environmental expenses                                                                          |  |                                         | 3,748   |      |   | 4,314  
|Deferred income taxes                                                                                   |  |                                         | 2,337   |      |   | 5,710  
|Employee benefit obligations                                                                            |  |                                         | 7,413   |      |   | 8,824  
|Other liabilities                                                                                       |  |                                         | 3,955   |      |   | 3,300  
|                                                                                                        |  |                                         |         |      |   |        
|Total liabilities                                                                                       |  |                                         | 160,616 |      |   | 194,475
|                                                                                                        |  |                                         |         |      |   |        
|Commitments and contingencies (Note 10)                                                                 |  |                                         |         |      |   |        
|                                                                                                        |  |                                        
|Shareholders equity:                                                                                   |  |                                         |         |      |   |        
|Common stock, $.50 par value, 40,000 authorized shares; 10,852 and 10,840 shares issued and outstanding |  |                                         | 5,426   |      |   | 5,420  
|Additional paid-in capital                                                                              |  |                                         | 3,574   |      |   |        
|Retained earnings                                                                                       |  |                                         | 219,700 |      |   | 226,932
|Accumulated other comprehensive income                                                                  |  |                                         | 8,267   |      |   | 35,673 
|                                                                                                        |  |                                         |         |      |   |        
|Total shareholders equity                                                                              |  |                                         | 236,967 |      |   | 268,025
|                                                                                                        |  |                                         |         |      |   |        
|Total liabilities and shareholders equity                                                              |  | $                                       | 397,583 |      | $ | 462,500
|                                                                                                        |  |                                         |         |      |   |        

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



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Cascade Corporation

Consolidated Statements of Changes in Shareholders Equity

(In thousands, except per share amounts)



|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------- |  | ------------ | - |  | ------------------------ | ----- | - | ---------------- | - | ------- | ------------------------------------------ |  | - | -------------------------------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                                 |  | Common Stock |   |  | AdditionalPaid-InCapital |       |   | RetainedEarnings |   |         | AccumulatedOtherComprehensiveIncome (Loss) |  |   | AnnualComprehensiveIncome (Loss) |  
|                                                                                 |  | Shares       |   |  | Amount                   |       |   |                  |   |        
|Balance at January 31, 2006                                                      |  | 12,536       |   |  | $                        | 6,268 |   |                  | $ | 21,590  |                                            |  | $ | 223,867                          |   |  |   | 7,681   |   |  |   |         |  
|Net income                                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | 45,481                           |   |  |   |        |   |  | $ | 45,481  |  
|Dividends ($.61 per share)                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | (7,603                           | ) |  |   |        |   |  |   |        |  
|Common stock issued                                                              |  | 291          |   |  |                          | 145   |   |                  |   | 3,296   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Tax effect from share-based compensation awards                                  |  |             |   |  |                          |      |   |                  |   | 1,083   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Common stock repurchase                                                          |  | (757         | ) |  |                          | (378  | ) |                  |   | (30,002 | )                                          |  |   | (8,438                           | ) |  |   |        |   |  |   |        |  
|Share-based compensation                                                         |  |             |   |  |                          |      |   |                  |   | 4,033   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Translation adjustment                                                           |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   |                                 |   |  |   | 4,008   |   |  |   | 4,008   |  
|Minimum pension/postretirement liability adjustment, net of tax effect of $360   |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   |                                 |   |  |   | 605     |   |  |   | 605     |  
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|Balance at January 31, 2007                                                      |  | 12,070       |   |  |                          | 6,035 |   |                  |   |        |                                            |  |   | 253,307                          |   |  |   | 12,294  |   |  | $ | 50,094  |  
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|Net income                                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | 60,147                           |   |  |   |        |   |  | $ | 60,147  |  
|Dividends ($.70 per share)                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | (8,243                           | ) |  |   |        |   |  |   |        |  
|Common stock issued                                                              |  | 430          |   |  |                          | 215   |   |                  |   | 3,628   |                                            |  |   |                                  |   |  |   |        |   |  |   |        |  
|Tax effect from share-based compensation awards                                  |  |             |   |  |                          |      |   |                  |   | 3,070   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Common stock repurchase                                                          |  | (1,660       | ) |  |                          | (830  | ) |                  |   | (11,149 | )                                          |  |   | (78,279                          | ) |  |   |         |   |  |   |        |  
|Share-based compensation                                                         |  |             |   |  |                          |      |   |                  |   | 4,451   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Translation adjustment                                                           |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   |                                 |   |  |   | 22,817  |   |  |   | 22,817  |  
|Minimum pension/postretirement liability adjustment, net of tax effect of ($304) |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   |                                 |   |  |   | 562     |   |  |   | 562     |  
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|Balance at January 31, 2008                                                      |  | 10,840       |   |  |                          | 5,420 |   |                  |   |        |                                            |  |   | 226,932                          |   |  |   | 35,673  |   |  | $ | 83,526  |  
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|Net income                                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | 1,267                            |   |  |   |        |   |  | $ | 1,267   |  
|Dividends ($.78 per share)                                                       |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | (8,460                           | ) |  |   |        |   |  |   |        |  
|Common stock issued                                                              |  | 30           |   |  |                          | 15    |   |                  |   | 115     |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Tax effect from share-based compensation awards                                  |  |             |   |  |                          |      |   |                  |   | (61     | )                                          |  |   |                                 |   |  |   |        |   |  |   |        |  
|Common stock repurchase                                                          |  | (18          | ) |  |                          | (9    | ) |                  |   | (901    | )                                          |  |   |                                 |   |  |   |        |   |  |   |        |  
|Share-based compensation                                                         |  |             |   |  |                          |      |   |                  |   | 4,421   |                                            |  |   |                                 |   |  |   |        |   |  |   |        |  
|Translation adjustment                                                           |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   |                                 |   |  |   | (28,550 | ) |  |   | (28,550 | )
|Minimum pension/postretirement liability adjustment, net of tax effect of ($319) |  |             |   |  |                          |      |   |                  |   |        |                                            |  |   | (39                              | ) |  |   | 1,144   |   |  |   | 1,144   |  
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  
|Balance at January 31, 2009                                                      |  | 10,852       |   |  | $                        | 5,426 |   |                  | $ | 3,574   |                                            |  | $ | 219,700                          |   |  | $ | 8,267   |   |  | $ | (26,139 | )
|                                                                                 |  |              |   |  |                          |       |   |                  |   |         |                                            |  |   |                                  |   |  |   |         |   |  |   |         |  

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



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Cascade Corporation

Consolidated Statements of Cash Flows



|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|--------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ---- | - | -------- | ---- |  | - | ------- | -
|                                                                                  |  | Year Ended January 31 |        
|                                                                                  |  | 2009                  |         |   | 2008 |   |          | 2007 | 
|                                                                                  |  | (In thousands)        |        
|Cash flows from operating activities:                                             |  |                       |         |   |      |   |          |      |  |   |         |  
|Net income                                                                        |  | $                     | 1,267   |   |      | $ | 60,147   |      |  | $ | 45,481  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                       |         |   |      |   |          |      |  |   |         |  
|Loss on asset impairment                                                          |  |                       | 46,376  |   |      |   |         |      |  |   |        |  
|Depreciation                                                                      |  |                       | 13,801  |   |      |   | 13,898   |      |  |   | 13,753  |  
|Amortization                                                                      |  |                       | 2,519   |   |      |   | 3,214    |      |  |   | 1,472   |  
|Share-based compensation                                                          |  |                       | 4,421   |   |      |   | 4,451    |      |  |   | 4,033   |  
|Deferred income taxes                                                             |  |                       | (15,911 | ) |      |   | 2,560    |      |  |   | (1,132  | )
|Loss (gain) on disposition of assets                                              |  |                       | 403     |   |      |   | (1,121   | )    |  |   | (552    | )
|Changes in operating assets and liabilities, net of effects of acquisitions:      |  |                       |         |   |      |   |          |      |  |   |         |  
|Accounts receivable                                                               |  |                       | 21,386  |   |      |   | (9,843   | )    |  |   | (3,878  | )
|Inventories                                                                       |  |                       | (16,065 | ) |      |   | (19,514  | )    |  |   | 2,898   |  
|Prepaid expenses and other                                                        |  |                       | (2,734  | ) |      |   | 1,237    |      |  |   | (2,667  | )
|Accounts payable and accrued expenses                                             |  |                       | (13,753 | ) |      |   | 3,671    |      |  |   | 863     |  
|Income tax payable and receivable                                                 |  |                       | (653    | ) |      |   | (3,492   | )    |  |   | (3,159  | )
|Other assets and liabilities                                                      |  |                       | 29      |   |      |   | (1,882   | )    |  |   | (3      | )
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Net cash provided by operating activities                                         |  |                       | 41,086  |   |      |   | 53,326   |      |  |   | 57,109  |  
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Cash flows from investing activities:                                             |  |                       |         |   |      |   |          |      |  |   |         |  
|Capital expenditures                                                              |  |                       | (16,709 | ) |      |   | (22,808  | )    |  |   | (18,078 | )
|Business acquisitions                                                             |  |                       |        |   |      |   | (11,529  | )    |  |   | (40,255 | )
|Proceeds from sale of assets                                                      |  |                       | 575     |   |      |   | 2,710    |      |  |   | 1,747   |  
|Sale of marketable securities                                                     |  |                       |        |   |      |   |         |      |  |   | 36,604  |  
|Purchase of marketable securities                                                 |  |                       |        |   |      |   |         |      |  |   | (13,600 | )
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Net cash used in investing activities                                             |  |                       | (16,134 | ) |      |   | (31,627  | )    |  |   | (33,582 | )
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Cash flows from financing activities:                                             |  |                       |         |   |      |   |          |      |  |   |         |  
|Payments on long-term debt and capital leases                                     |  |                       | (68,945 | ) |      |   | (112,143 | )    |  |   | (38,033 | )
|Proceeds from long-term debt                                                      |  |                       | 60,500  |   |      |   | 173,433  |      |  |   | 58,000  |  
|Notes payable to banks, net                                                       |  |                       | (326    | ) |      |   | (3,166   | )    |  |   | (2,501  | )
|Cash dividends paid                                                               |  |                       | (8,460  | ) |      |   | (8,243   | )    |  |   | (7,603  | )
|Common stock repurchased                                                          |  |                       | (3,220  | ) |      |   | (90,240  | )    |  |   | (36,540 | )
|Common stock issued under share-based compensation plans                          |  |                       | 130     |   |      |   | 3,843    |      |  |   | 3,441   |  
|Tax effect from share-based compensation awards                                   |  |                       | (61     | ) |      |   | 3,084    |      |  |   | 1,083   |  
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Net cash used in financing activities                                             |  |                       | (20,382 | ) |      |   | (33,432  | )    |  |   | (22,153 | )
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Effect of exchange rate changes                                                   |  |                       | 5,392   |   |      |   | (3,637   | )    |  |   | (274    | )
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Change in cash and cash equivalents                                               |  |                       | 9,962   |   |      |   | (15,370  | )    |  |   | 1,100   |  
|Cash and cash equivalents at beginning of year                                    |  |                       | 21,223  |   |      |   | 36,593   |      |  |   | 35,493  |  
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Cash and cash equivalents at end of period                                        |  | $                     | 31,185  |   |      | $ | 21,223   |      |  | $ | 36,593  |  
|                                                                                  |  |                       |         |   |      |   |          |      |  |   |         |  
|Supplemental disclosure of noncash information:                                   |  |                       |         |   |      |   |          |      |  |   |         |  
|See Note 11 to Consolidated Financial Statements                                  |  |                       |         |   |      |   |          |      |  |   |         |  

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



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Cascade Corporation

Notes to Consolidated Financial Statements

Note 1Description of Business

Cascade
Corporation is an international company engaged in the manufacture of materials handling products that are widely used on industrial lift trucks and, to a lesser extent, on construction, mining and agricultural vehicles. Accordingly, our sales are
largely dependent on the sales of lift trucks and on the sales of replacement parts. Our sales are made throughout the world. We are headquartered in Fairview, Oregon, employing approximately 2,000 people and maintaining operations in 15 countries
outside the United States.

Note 2Summary of Significant Accounting Policies

Principles of Consolidation

Our consolidated financial statements include the accounts of Cascade
Corporation and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit and highly liquid investments with maturities of three months or less at the date
of purchase.

Allowances for Trade Accounts Receivable

Trade accounts receivable are stated net of allowances for doubtful accounts. We maintain allowances for doubtful accounts for estimated losses on accounts receivable resulting from the inability of our customers to
make required payments. Such allowances are based on evaluation of the credit worthiness of our customers, an ongoing review of customer payments against terms, historical trends and economic circumstances.

Inventories

Inventories are stated at the lower of
average cost or market. Cost is computed on a standard basis, which approximates actual cost. We classify inventory into two categories: finished goods and raw materials and components. Finished goods inventory represents inventory that is readily
available for sale without further manufacturing and spare parts. Raw materials and components include inventory to be used to build finished goods inventory.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation
is generally provided using the straight-line method over the estimated useful lives of the assets. Tooling costs are capitalized as machinery and equipment. Useful lives range from thirty to forty years for buildings, fifteen years for land
improvements and two to ten years for machinery and equipment. Maintenance and repairs are expensed as incurred and costs of improvements and renewals are capitalized. Upon disposal, cost and accumulated depreciation are removed from the accounts
and the resulting gains or losses are reflected in operations.

Intangible Assets

Intangible assets represent items such as customer relationships, intellectual property, primarily patents and trade names, and non-compete agreements
that are assigned a fair value at the date of acquisition. We amortize finite-lived assets on a straight-line basis over the periods that expected economic benefits will be provided. Useful lives range from six to ten years for customer
relationships, four to ten years for intellectual property and one to five years for other intangible assets. At the end of the estimated economic life, the fully-amortized intangible asset cost and corresponding accumulated amortization are
eliminated.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)



Impairment of Long-Lived Assets

Long-lived assets, excluding goodwill, are reviewed for impairment
in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of
recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the assets and eventual disposition in comparison with the carrying value. An estimate of future sales, gross margins and selling and administrative
expenses are used to calculate future cash flows. The fair value of each asset is calculated using a cash flow methodology based on these assumptions. An impairment of a long-lived asset exists when the carrying value of an asset exceeds its fair
value. See Note 6 Goodwill and Intangible Assets for a discussion of the asset impairment charge recorded during fiscal 2009.

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the fair value of the net identifiable assets acquired. We review
goodwill for impairment in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, either annually or when events or changes in circumstances indicate the carrying value of the assets might exceed their current fair
values. The review is performed for our reporting units, including North America, Europe, Australia and our construction attachment business in North America. Certain factors we consider important which could trigger an impairment review at an
interim date outside of the annual review, include, but are not limited to, significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the acquired assets or our overall
business and significant industry or economic trends.

The impairment review is based on a discounted projected cash flow model that uses
estimates of future sales, sales growth rates, gross profits, expense and capital expenditure levels, a discount rate and estimated terminal values to determine the fair value of the operating entities should an impairment exist. We use a weighted
average cost of capital (WACC) to discount future cash flows for goodwill impairment tests. The WACC is the expected rate of return based on an industry specific debt and equity capital structure and cost of debt, adjusted for geographic and company
size specific factors. The WACC can vary by reporting unit. Changes in these and other factors could result in impairments in the carrying value of goodwill, which would require a writedown to the assets fair value. If actual results are not
consistent with our assumptions and judgments, we could be exposed to a material impairment charge. See Note 6 Goodwill and Intangible Assets for a discussion of the goodwill impairment charge recorded during fiscal 2009.

Common Stock

We follow the practice of recording
amounts received upon the exercise of awards by crediting common stock and additional paid-in capital. In addition, we credit additional paid-in-capital upon the recognition of share-based compensation expense. We realize an income tax benefit from
the exercise or early disposition of certain stock awards. This benefit results in a decrease in current income taxes payable and an increase in additional paid-in capital.

Minimum Pension/Postretirement Liability Adjustment

We record a minimum pension/postretirement
liability adjustment to the extent that the accumulated benefit obligation exceeds the fair value of plan assets and accrued pension/postretirement liabilities. This adjustment is reflected as a reduction in shareholders equity, net of income
tax benefits.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting
Policies (Continued)



Share-Based Compensation

We account for share-based compensation, for which we receive employee services in exchange for our equity instruments, using a fair value method.
Share-based compensation cost is measured at the grant date based on the value of the award and is recognized as a corporate headquarters expense in North America over the service period the award is expected to vest. Determining the fair value
share-based awards at the grant date requires judgment, including estimating the expected term of stock awards, the expected volatility of our common stock and expected dividends. In addition, judgment is also required in estimating the amount of
share-based awards that are expected to be forfeited. We consider many factors when estimating expected forfeitures, including types of awards, award recipient class and historical experience. Significant changes in the assumptions for future awards
and actual forfeiture rates could materially impact share-based compensation expense and our results of operations. Subsequent changes in forfeiture rates will be recorded as a cumulative adjustment in the period estimates are revised.

Foreign Currency Translation

We translate the
balance sheets of our foreign subsidiaries using fiscal year-end exchange rates. The cumulative effect on such translations is included in shareholders equity. The consolidated statements of income and cash flows are translated using the
average exchange rates for the period.

Environmental Remediation

We accrue environmental costs if it is probable a liability has been incurred at the financial statement date and the amount can be reasonably estimated. Recorded liabilities have not been discounted. Environmental
compliance and legal costs are expensed as incurred. Assets related to the reimbursement of amounts expended for environmental expenses are recognized only when realization is probable.

Foreign Currency Forward Exchange Contracts

Gains and losses on foreign currency forward exchange
contracts, which generally mature in six months or less, are recognized in other income (expense) and measured over the period of the contract by reference to the forward rate for a contract to be consummated on the same future date as the original
contract.

Revenue Recognition

We
recognize revenue when the following criteria are met:

Persuasive evidence of an arrangement existsSales arrangements are
supported by written or electronic documentation or evidence from a customer.

Delivery has occurred or services have been
renderedRevenue is recognized when title transfers and risk and rewards of ownership have passed to the customer. This generally occurs upon shipment of our product with FOB Shipping Point terms. Shipments with FOB
Destination terms are recorded as revenue when products are delivered to the customer. Customers are responsible for payment even if the product is not sold to their end customer. Once shipping terms are met we have no continuing obligations
or performance criteria requirements.

Fixed or determinable sales priceSales are at fixed or established sales prices
determined prior to the time the products are shipped with no customer cancellation, price protection or termination clauses.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)



Collectibility is reasonably assuredBased on our credit management policies, we generally believe collectibility is reasonably assured when
product is shipped to a customer. Provisions for uncollectible accounts and return allowances are recorded at the time revenue is recognized based on our historical experience.

Shipping and Handling Costs

We incur shipping, handling and other related costs for the shipment of
goods to customers. These costs are recognized in the period in which the expenses occur and are classified as cost of goods sold. Amounts billed to customers for shipping, handling and related costs are reported as a component of net sales.

Warranty Obligations

We record a
liability on our consolidated balance sheet for costs related to certain warranties we provide with the sales of our products. This liability is estimated through historical customer claims, product failure rates, material usage and service delivery
costs incurred in correcting a product failure.

Income Taxes

Deferred income tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and the amounts reported in the consolidated
financial statements. The provision for income taxes is the tax payable for the period and the change during the period in net deferred income tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred income
tax assets to the amount expected to be realized.

Research and Development Costs

Research and development costs are expensed as incurred and are related to developing new products and to improving existing products or processes. These
costs primarily include salaries, consulting, supplies, legal costs related to patents and design costs. We incurred research and development costs of $3 million, $3.8 million, and $3.8 million for the years ended January 31,
2009, 2008 and 2007, respectively.

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable and foreign currency forward exchange contracts. We place our
cash and cash equivalents in major financial institutions. Deposits held with financial institutions may exceed regulatory limits in countries in which we operate.

Accounts receivable are with a large number of customers, primarily equipment manufacturers and dealers, dispersed across a wide geographic base. No single customer accounts for more than 10% of our consolidated net
sales. Our consolidated net sales to all original equipment manufacturers (OEM) are approximately 45% of total net sales. This percentage is consistent with recent years. We perform on-going credit evaluations and do not require collateral.
Allowances are maintained for potential credit losses when deemed necessary.

See Note 17 Derivative Instruments and Hedging
Activities for discussion of foreign currency forward exchange contracts.

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



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting
Policies (Continued)



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. We base our estimates on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Significant estimates and judgments made by our management include matters such as the collectibility of accounts receivable, obsolete inventory reserves, realizability of deferred income tax assets, realizability of goodwill and long-lived assets,
warranty liabilities, share based compensation and benefit plan assumptions and future costs of environmental matters.

Earnings Per Share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects potential dilution that could occur if stock options, SARS or unvested restricted stock were exercised or converted into common stock using the treasury stock method.

Recent Accounting Pronouncements

SFAS
157In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 provides a
common definition of fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. In February 2008, the FASB issued final Staff Positions that will (1) defer the effective date of this statement
for one year for certain nonfinancial assets and nonfinancial liabilities and (2) remove certain leasing transactions from the scope of the statement. We applied SFAS 157 to all other fair value measurements effective February 1, 2008. The
adoption of SFAS 157 did not have a material impact on our financial statements.

FSP 157-2In February 2008, the FASB issued
FASB Staff Position on Statement 157, Effective Date of FASB Statement No. 157 (FSP 157-2). FSP 157-2 delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except those that are recognized
or disclosed on a recurring basis, to fiscal years beginning after November 15, 2008. Our significant nonfinancial assets and liabilities that could be impacted by this deferral include assets and liabilities initially measured at fair
value in a business combination and goodwill tested annually for impairment. FSP 157-2 will become effective for the fiscal year beginning February 1, 2009. We are currently evaluating the impact of the adoption of FSP 157-2 on our
financial statements.

FSP 157-3In October 2008, the FASB issued FASB Staff Position No. 157-3 Determining
the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP 157-3). FSP 157-3 clarifies the application of SFAS 157 in a market that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset when the market for that financial asset is not active. FSP 157-3 was effective upon issuance. We adopted FSP 157-3 for the period ended October 31, 2008. The adoption did not have a material
impact on our financial statements.

SFAS 159In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The
Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115. SFAS 159 allows companies the choice to measure many financial instruments and certain other items at fair value.
Application of SFAS 159 was required for our financial statements beginning February 1, 2008. The adoption of SFAS 159 did not have a material impact on our financial statements.

SFAS 141(R) & SFAS 160In December 2007, the FASB issued SFAS No. 141(R) (SFAS 141(R)), Business Combinations, and SFAS
No. 160 (SFAS 160), Noncontrolling Interests in Consolidated Financial



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)



Statements, an amendment of ARB No. 51. SFAS 141(R) requires the acquiring entity in a business combination to recognize the assets acquired and
liabilities assumed. Further, SFAS 141(R) also changes the accounting for acquired in-process research and development assets, contingent consideration, partial acquisitions and transaction costs. Under SFAS 160, all entities are required to
report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. In addition, transactions between an entity and noncontrolling interests will be treated as equity transactions. SFAS 141(R) and SFAS 160
will become effective for business combinations for which the acquisition date is on or after February 1, 2009.

SFAS
161In March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133. SFAS 161 expands disclosures for derivative
instruments by requiring entities to disclose the fair value of derivative instruments and their gains or losses in tabular format. SFAS 161 also requires disclosure of information about credit risk-related contingent features in derivative
agreements, counterparty credit risk, and strategies and objectives for using derivative instruments. SFAS 161 will become effective for fiscal years beginning after November 15, 2008. We will adopt this new accounting standard on
February 1, 2009. We are currently evaluating the impact of the adoption of this standard on our financial statements.

SFAS
162In May 2008, the FASB issuedSFAS No. 162 (SFAS 162), The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 identifies the sources of accounting principles and the framework for selecting the
principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS 162 will become effective 60 days following the
SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. We do not expect any changes to our
financial accounting and reporting as a result of the adoption of this standard.

Note 3Segment Information

Our operating units have several economic characteristics and attributes, including similar products, distribution patterns and classes of customers. As a
result, we aggregate our operating units into four geographic operating segments related to the manufacturing, distribution and servicing of material handling load engagement products. We evaluate the performance of each of our operating segments
based on income before interest, miscellaneous income/expense and income taxes. The accounting policies of the operating segments are the same as those described in the summary of accounting policies.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 3Segment Information (Continued)



Revenues and operating results are classified according to the
country of origin. Transfers represent sales between our geographic operating segments. The costs of our corporate office are included in North America. Identifiable assets are attributed to the geographic location in which they are located. Net
sales and transfers, operating results and identifiable assets by geographic operating segment were as follows (in thousands):



|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|----------------------------------------- |  | --------------------- | ------- | - | ------ | - | ------- | ------------ |  | - | ------ | - | ------------ | - | ------ | ------------- | - | ------- | - |  | - | ------- | -
|                                          |  | Year Ended January 31 |        
|                                          |  | North America         |         |   | Europe |   |         | Asia Pacific |  |   | China  |   | Eliminations |   |        | Consolidation |  
|2009                                      |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales                                 |  | $                     | 257,077 |   |        | $ | 167,955 |              |  | $ | 68,466 |   |              | $ | 40,674 |               |   |         |   |  | $ | 534,172 |  
|Transfers between areas                   |  |                       | 29,083  |   |        |   | 1,686   |              |  |   | 355    |   |              |   | 23,219 |               |   | (54,343 | ) |  |   |        |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales and transfers                   |  | $                     | 286,160 |   |        | $ | 169,641 |              |  | $ | 68,821 |   |              | $ | 63,893 |               | $ | (54,343 | ) |  | $ | 534,172 |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Gross Profit                              |  | $                     | 87,924  |   |        | $ | 25,253  |              |  | $ | 16,363 |   |              | $ | 19,008 |               |   |         |   |  | $ | 148,548 |  
|Selling and administrative                |  |                       | 45,451  |   |        |   | 26,148  |              |  |   | 9,040  |   |              |   | 4,590  |               |   |         |   |  |   | 85,229  |  
|Loss on disposition of assets             |  |                       | 178     |   |        |   | 108     |              |  |   | 47     |   |              |   | 70     |               |   |         |   |  |   | 403     |  
|Amortization                              |  |                       | 2,221   |   |        |   | 298     |              |  |   |       |   |              |   |       |               |   |         |   |  |   | 2,519   |  
|Asset impairment charge                   |  |                       | 46,376  |   |        |   |        |              |  |   |       |   |              |   |       |               |   |         |   |  |   | 46,376  |  
|European restructuring costs              |  |                       |        |   |        |   | 2,544   |              |  |   |       |   |              |   |       |               |   |         |   |  |   | 2,544   |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Operating income (loss)                   |  | $                     | (6,302  | ) |        | $ | (3,845  | )            |  | $ | 7,276  |   |              | $ | 14,348 |               |   |         |   |  | $ | 11,477  |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Total assets                              |  | $                     | 180,782 |   |        | $ | 117,199 |              |  | $ | 41,698 |   |              | $ | 57,904 |               |   |         |   |  | $ | 397,583 |  
|Property, plant and equipment, net        |  | $                     | 33,614  |   |        | $ | 31,530  |              |  | $ | 9,033  |   |              | $ | 19,649 |               |   |         |   |  | $ | 93,826  |  
|Capital expenditures                      |  | $                     | 6,646   |   |        | $ | 4,415   |              |  | $ | 2,796  |   |              | $ | 2,852  |               |   |         |   |  | $ | 16,709  |  
|Depreciation expense                      |  | $                     | 6,388   |   |        | $ | 5,107   |              |  | $ | 481    |   |              | $ | 1,825  |               |   |         |   |  | $ | 13,801  |  
|                                          | 
|                                          |  | Year Ended January 31 |        
|                                          |  | North America         |         |   | Europe |   |         | Asia Pacific |  |   | China  |   | Eliminations |   |        | Consolidation |  
|2008                                      |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales                                 |  | $                     | 286,832 |   |        | $ | 171,435 |              |  | $ | 59,776 |   |              | $ | 40,030 |               |   |         |   |  | $ | 558,073 |  
|Transfers between areas                   |  |                       | 33,118  |   |        |   | 1,497   |              |  |   | 179    |   |              |   | 17,410 |               |   | (52,204 | ) |  |   |        |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales and transfers                   |  | $                     | 319,950 |   |        | $ | 172,932 |              |  | $ | 59,955 |   |              | $ | 57,440 |               | $ | (52,204 | ) |  | $ | 558,073 |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Gross Profit                              |  | $                     | 109,832 |   |        | $ | 27,644  |              |  | $ | 15,063 |   |              | $ | 18,635 |               |   |         |   |  | $ | 171,174 |  
|Selling and administrative                |  |                       | 51,020  |   |        |   | 26,201  |              |  |   | 8,297  |   |              |   | 3,927  |               |   |         |   |  |   | 89,445  |  
|Loss (gain) on disposition of assets, net |  |                       | (1,135  | ) |        |   |        |              |  |   | (34    | ) |              |   | 48     |               |   |         |   |  |   | (1,121  | )
|Amortization                              |  |                       | 2,482   |   |        |   | 732     |              |  |   |       |   |              |   |       |               |   |         |   |  |   | 3,214   |  
|Insurance litigation recovery, net        |  |                       | (15,977 | ) |        |   |        |              |  |   |       |   |              |   |       |               |   |         |   |  |   | (15,977 | )
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Operating income                          |  | $                     | 73,442  |   |        | $ | 711     |              |  | $ | 6,800  |   |              | $ | 14,660 |               |   |         |   |  | $ | 95,613  |  
|                                          |  |                       |         |   |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Total assets                              |  | $                     | 236,022 |   |        | $ | 135,171 |              |  | $ | 43,471 |   |              | $ | 47,836 |               |   |         |   |  | $ | 462,500 |  
|Property, plant and equipment, net        |  | $                     | 35,026  |   |        | $ | 38,815  |              |  | $ | 6,745  |   |              | $ | 17,764 |               |   |         |   |  | $ | 98,350  |  
|Capital expenditures                      |  | $                     | 7,986   |   |        | $ | 4,439   |              |  | $ | 5,302  |   |              | $ | 5,081  |               |   |         |   |  | $ | 22,808  |  
|Depreciation expense                      |  | $                     | 7,066   |   |        | $ | 5,091   |              |  | $ | 385    |   |              | $ | 1,356  |               |   |         |   |  | $ | 13,898  |  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 3Segment Information (Continued)



|                                     |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|------------------------------------ |  | --------------------- | ------- | ------ | - | ------- | ------------ |  | - | ------ | - | ------------ | - | ------ | ------------- | - | ------- | - |  | - | ------- | -
|                                     |  | Year Ended January 31 |        
|                                     |  | North America         |         | Europe |   |         | Asia Pacific |  |   | China  |   | Eliminations |   |        | Consolidation |  
|2007                                 |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales                            |  | $                     | 263,312 |        | $ | 137,755 |              |  | $ | 48,256 |   |              | $ | 29,527 |               | $ |        |   |  | $ | 478,850 |  
|Transfers between areas              |  |                       | 25,367  |        |   | 1,468   |              |  |   | 220    |   |              |   | 7,853  |               |   | (34,908 | ) |  |   |        |  
|                                     |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Net sales and transfers              |  | $                     | 288,679 |        | $ | 139,223 |              |  | $ | 48,476 |   |              | $ | 37,380 |               | $ | (34,908 | ) |  | $ | 478,850 |  
|                                     |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Gross Profit                         |  | $                     | 102,810 |        | $ | 22,641  |              |  | $ | 12,093 |   |              | $ | 12,436 |               |   |         |   |  | $ | 149,980 |  
|Selling and administrative           |  |                       | 46,750  |        |   | 22,921  |              |  |   | 7,996  |   |              |   | 3,042  |               |   |         |   |  |   | 80,709  |  
|Loss (gain) on disposition of assets |  |                       | 16      |        |   | (588    | )            |  |   | (17    | ) |              |   | 37     |               |   |         |   |  |   | (552    | )
|Amortization                         |  |                       | 598     |        |   | 851     |              |  |   | 19     |   |              |   | 4      |               |   |         |   |  |   | 1,472   |  
|                                     |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Operating income (loss)              |  | $                     | 55,446  |        | $ | (543    | )            |  | $ | 4,095  |   |              | $ | 9,353  |               |   |         |   |  | $ | 68,351  |  
|                                     |  |                       |         |        |   |         |              |  |   |        |   |              |   |        |               |   |         |   |  |   |         |  
|Total assets                         |  | $                     | 213,451 |        | $ | 114,660 |              |  | $ | 31,323 |   |              | $ | 37,998 |               |   |         |   |  | $ | 397,432 |  
|Property, plant and equipment, net   |  | $                     | 34,378  |        | $ | 35,300  |              |  | $ | 1,642  |   |              | $ | 12,831 |               |   |         |   |  | $ | 84,151  |  
|Capital expenditures                 |  | $                     | 6,174   |        | $ | 2,469   |              |  | $ | 481    |   |              | $ | 8,954  |               |   |         |   |  | $ | 18,078  |  
|Depreciation expense                 |  | $                     | 7,899   |        | $ | 4,968   |              |  | $ | 387    |   |              | $ | 499    |               |   |         |   |  | $ | 13,753  |  

The following table represents sales by place of destination:



|                                                           |  |                       |         |      |   |         |  |   |        
|---------------------------------------------------------- |  | --------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                           |  | Year Ended January 31
|                                                           |  | 2009                  |         | 2008 |   | 2007   
|                                                           |  | (In thousands)       
|United States                                              |  | $                     | 221,363 |      | $ | 256,149 |  | $ | 229,438
|Europe, excluding United Kingdom                           |  |                       | 132,141 |      |   | 128,017 |  |   | 102,329
|China                                                      |  |                       | 38,733  |      |   | 36,471  |  |   | 27,703 
|Japan                                                      |  |                       | 28,613  |      |   | 23,437  |  |   | 20,384 
|United Kingdom                                             |  |                       | 27,894  |      |   | 32,819  |  |   | 27,955 
|Australia/New Zealand                                      |  |                       | 25,220  |      |   | 21,710  |  |   | 16,499 
|Canada                                                     |  |                       | 23,660  |      |   | 24,941  |  |   | 25,605 
|Other countries (less then 5% of total sales individually) |  |                       | 36,548  |      |   | 34,529  |  |   | 28,937 
|                                                           |  |                       |         |      |   |         |  |   |        
|                                                           |  | $                     | 534,172 |      | $ | 558,073 |  | $ | 478,850
|                                                           |  |                       |         |      |   |         |  |   |        

The following table represents the value of long-lived assets including property, plant and
equipment (net), goodwill, intangible assets (net) and other long-term assets by the country in which they are located:



|                                                           |  |                       |         |      |   |         |  |   |        
|---------------------------------------------------------- |  | --------------------- | ------- | ---- | - | ------- |  | - | -------
|                                                           |  | Year Ended January 31
|                                                           |  | 2009                  |         | 2008 |   | 2007   
|                                                           |  | (In thousands)       
|United States                                              |  | $                     | 33,771  |      | $ | 82,308  |  | $ | 70,571 
|Canada                                                     |  |                       | 65,434  |      |   | 80,475  |  |   | 69,131 
|China                                                      |  |                       | 19,651  |      |   | 17,766  |  |   | 12,834 
|The Netherlands                                            |  |                       | 14,191  |      |   | 17,730  |  |   | 16,286 
|Italy                                                      |  |                       | 10,187  |      |   | 11,930  |  |   | 10,981 
|Japan                                                      |  |                       | 8,575   |      |   | 5,991   |  |   | 1,511  
|Other countries (less then 5% of total sales individually) |  |                       | 19,553  |      |   | 23,863  |  |   | 21,346 
|                                                           |  |                       |         |      |   |         |  |   |        
|                                                           |  | $                     | 171,362 |      | $ | 240,063 |  | $ | 202,660
|                                                           |  |                       |         |      |   |         |  |   |        



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 4Inventories



|                             |  |                |        |      |   |       
|---------------------------- |  | -------------- | ------ | ---- | - | ------
|                             |  | January 31    
|                             |  | 2009           |        | 2008
|                             |  | (In thousands)
|Finished goods               |  | $              | 31,997 |      | $ | 35,303
|Raw materials and components |  |                | 58,809 |      |   | 49,746
|                             |  |                |        |      |   |       
|                             |  | $              | 90,806 |      | $ | 85,049
|                             |  |                |        |      |   |       

Note 5Property, Plant and Equipment



|                         |  |                |          |   |      |   |          |  
|------------------------ |  | -------------- | -------- | - | ---- | - | -------- | -
|                         |  | January 31     |         
|                         |  | 2009           |          |   | 2008 |  
|                         |  | (In thousands) |         
|Land                     |  | $              | 8,870    |   |      | $ | 8,862    |  
|Buildings                |  |                | 54,668   |   |      |   | 54,889   |  
|Machinery and equipment  |  |                | 177,179  |   |      |   | 188,124  |  
|                         |  |                |          |   |      |   |          |  
|                         |  |                | 240,717  |   |      |   | 251,875  |  
|Accumulated depreciation |  |                | (146,891 | ) |      |   | (153,525 | )
|                         |  |                |          |   |      |   |          |  
|                         |  | $              | 93,826   |   |      | $ | 98,350   |  
|                         |  |                |          |   |      |   |          |  

Note 6Goodwill and Intangible Assets

After completing our fiscal 2009 annual goodwill impairment test, it was determined that the fair value of our construction attachment business in North
America was below the carrying value. The goodwill impairment is a result of increasing losses in our construction business due to a deterioration of the North American construction industry. During fiscal 2009 our construction business had sales of
$11.7 million and a pre-tax loss of $4.9 million.

The goodwill impairment charge was $29.2 million for the year ended January 31,
2009. The following table provides a breakdown of goodwill activity by reporting unit at January 31, 2009:



|                            |  |               |         |   |              |   |         |        |  |   |              |   |  |       |       |   |  |   |         |  
|--------------------------- |  | ------------- | ------- | - | ------------ | - | ------- | ------ |  | - | ------------ | - |  | ----- | ----- | - |  | - | ------- | -
|                            |  | North America |         |   | Construction |   |         | Europe |  |   | Asia Pacific |   |  | Total |      
|Balance at January 31, 2007 |  | $             | 63,878  |   |              | $ | 22,025  |        |  | $ | 10,598       |   |  | $     | 2,997 |   |  | $ | 99,498  |  
|Acquisitions                |  |               |        |   |              |   | 7,132   |        |  |   |             |   |  |       |      |   |  |   | 7,132   |  
|Foreign Exchange Impact     |  |               | 10,930  |   |              |   |        |        |  |   | 1,295        |   |  |       | (29   | ) |  |   | 12,196  |  
|                            |  |               |         |   |              |   |         |        |  |   |              |   |  |       |       |   |  |   |         |  
|Balance at January 31, 2008 |  |               | 74,808  |   |              |   | 29,157  |        |  |   | 11,893       |   |  |       | 2,968 |   |  |   | 118,826 |  
|Impairment charge           |  |               |        |   |              |   | (29,157 | )      |  |   |             |   |  |       |      |   |  |   | (29,157 | )
|Foreign Exchange Impact     |  |               | (13,492 | ) |              |   |        |        |  |   | (1,853       | ) |  |       | 63    |   |  |   | (15,282 | )
|                            |  |               |         |   |              |   |         |        |  |   |              |   |  |       |       |   |  |   |         |  
|Balance at January 31, 2009 |  | $             | 61,316  |   |              | $ |        |        |  | $ | 10,040       |   |  | $     | 3,031 |   |  | $ | 74,387  |  
|                            |  |               |         |   |              |   |         |        |  |   |              |   |  |       |       |   |  |   |         |  

Intangible Assets

Our impairment test at January 31, 2009 also included an evaluation of long-lived assets used in our construction reporting unit. These assets included customer relationships, patents, trade names, non-compete
agreements and property, plant and equipment. These assets were acquired during fiscal 2007 and 2008 during the purchases of Pacific Services and Manufacturing, Inc and American Compaction Equipment, Inc.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 6Goodwill and Intangible Assets (Continued)



The carrying value of the assets was compared to the fair value and an impairment recorded where the carrying value exceeded fair value. The impairment
charge recorded in the fourth quarter of fiscal 2009 related to long-lived assets was $17.2 million, comprised of customer relationships ($13.3 million) and intellectual property ($3.9 million).

The following table provides detail of intangible assets as of January 31, 2009 and 2008. Assets that are completely written off during the year are
not included in the table.



|                         |  |                |         |   |      |   |        |  
|------------------------ |  | -------------- | ------- | - | ---- | - | ------ | -
|                         |  | January 31     |        
|                         |  | 2009           |         |   | 2008 |  
|                         |  | (In thousands) |        
|Customer relationships   |  | $              | 18,763  |   |      | $ | 19,014 |  
|Intellectual property    |  |                | 2,200   |   |      |   | 5,100  |  
|Other                    |  |                | 476     |   |      |   | 503    |  
|                         |  |                |         |   |      |   |        |  
|                         |  |                | 21,439  |   |      |   | 24,617 |  
|Accumulated amortization |  |                | (5,356  | ) |      |   | (3,701 | )
|Impairment write down    |  |                | (14,932 | ) |      |   |       |  
|                         |  |                |         |   |      |   |        |  
|                         |  | $              | 1,151   |   |      | $ | 20,916 |  
|                         |  |                |         |   |      |   |        |  

The following table represents future amortization expense as of January 31, 2009 (in
thousands):



|                      |  |   |      
|--------------------- |  | - | -----
|Year ended January 31 |  |  
|2010                  |  | $ | 392  
|2011                  |  |   | 158  
|2012                  |  |   | 138  
|2013                  |  |   | 88   
|2014                  |  |   | 81   
|Thereafter            |  |   | 263  
|                      |  |   |      
|                      |  | $ | 1,120
|                      |  |   |      

Note 7Warranty Obligations

Our warranty obligations, which are recorded in other accrued expenses on the consolidated balance sheet, are as follows:



|                                                 |  |                |        |   |      |   |        |  
|------------------------------------------------ |  | -------------- | ------ | - | ---- | - | ------ | -
|                                                 |  | January 31     |       
|                                                 |  | 2009           |        |   | 2008 |  
|                                                 |  | (In thousands) |       
|Beginning obligation                             |  | $              | 1,900  |   |      | $ | 1,755  |  
|Accruals for warranties issued during the period |  |                | 1,896  |   |      |   | 2,663  |  
|Settlements during the year                      |  |                | (2,239 | ) |      |   | (2,659 | )
|Foreign currency changes                         |  |                | (245   | ) |      |   | 141    |  
|                                                 |  |                |        |   |      |   |        |  
|Ending obligation                                |  | $              | 1,312  |   |      | $ | 1,900  |  
|                                                 |  |                |        |   |      |   |        |  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 8Debt



|                                                                                                                                                                         |  |                |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------- | - | ---- | - | ------- | -
|                                                                                                                                                                         |  | January 31     |        
|                                                                                                                                                                         |  | 2009           |         |   | 2008 |  
|                                                                                                                                                                         |  | (In thousands) |        
|Revolving line of credit, variable interest payable of 1.8% and 3.9% at January 31, 2009 and 2008, respectively, principal payable in
December 2011                      |  | $              | 96,000  |   |      | $ | 104,000 |  
|Note payable, interest at 2.4% and 1.4% at January 31, 2009 and 2008, respectively; principal payable monthly through fiscal 2018.
Collateralized by land and a building |  |                | 4,508   |   |      |   | 4,232   |  
|                                                                                                                                                                         |  |                |         |   |      |   |         |  
|                                                                                                                                                                         |  |                | 100,508 |   |      |   | 108,232 |  
|Less current portion                                                                                                                                                     |  |                | (501    | ) |      |   | (423    | )
|                                                                                                                                                                         |  |                |         |   |      |   |         |  
|Long-term debt                                                                                                                                                           |  | $              | 100,007 |   |      | $ | 107,809 |  
|                                                                                                                                                                         |  |                |         |   |      |   |         |  

Borrowing arrangements currently in place with commercial banks provide available lines of credit
totaling $145 million, of which $98.3 million was being used at January 31, 2009 through outstanding debt and the issuance of letters of credit. Available borrowings decrease by $1.25 million each quarter through December 2011. The line of
credit is uncollateralized. Amounts under the line of credit bear interest at LIBOR plus a margin between 0.75% and 1.25%, based on certain of our financial ratios. As of January 31, 2009, the interest rate was LIBOR plus a margin of 1.0% and
commitment fees on unused amounts are 0.225%.

The line of credit contains covenants relating to fixed charge coverage and leverage ratios.
We were in compliance with these covenants at January 31, 2009. Each covenant is calculated quarterly based on the actual results for the previous twelve months. Further details regarding the ratios under these covenants are provided below:

Fixed Charge Coverage RatioThe fixed charge ratio requires adjusted EBITDA, as defined in the letter of credit agreement,
to be in excess of 1.5 times required principal and interest payments. Adjusted EBITDA is calculated as EBITDA less cash taxes, maintenance capital expenditures of $13 million and dividends paid.

Leverage RatioThe leverage ratio requires total debt, calculated as outstanding debt and letters of credit, to be less than 3 times of EBITDA.

Future maturities of long-term debt are as follows (in thousands):



|                      |  |   |        
|--------------------- |  | - | -------
|Year ended January 31 |  |  
|2010                  |  | $ | 501    
|2011                  |  |   | 501    
|2012                  |  |   | 96,501 
|2013                  |  |   | 501    
|2014                  |  |   | 501    
|Thereafter            |  |   | 2,003  
|                      |  |   |        
|                      |  | $ | 100,508
|                      |  |   |        

Borrowings under notes payable to banks, which includes bank overdrafts and short-term lines of
credit, were $2.3 million and $2.5 million at January 31, 2009 and 2008, respectively. The average interest rate on these notes was 2.6% and 4.3% at January 31, 2009 and 2008, respectively.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 9Income Taxes



|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                                                                                                                   |  | Year Ended January 31 |        
|                                                                                                                                                                                   |  | 2009                  |         |   | 2008 |   |        | 2007 | 
|                                                                                                                                                                                   |  | (In thousands)        |        
|Provision (benefit) for income taxes consisted of:                                                                                                                                 |  |                       |         |   |      |   |        |      |  |   |        |  
|Current:                                                                                                                                                                           |  |                       |         |   |      |   |        |      |  |   |        |  
|Federal                                                                                                                                                                            |  | $                     | 6,603   |   |      | $ | 14,225 |      |  | $ | 11,056 |  
|State                                                                                                                                                                              |  |                       | 578     |   |      |   | 1,861  |      |  |   | 1,582  |  
|Foreign                                                                                                                                                                            |  |                       | 11,180  |   |      |   | 12,070 |      |  |   | 12,268 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|                                                                                                                                                                                   |  |                       | 18,361  |   |      |   | 28,156 |      |  |   | 24,906 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|Deferred:                                                                                                                                                                          |  |                       |         |   |      |   |        |      |  |   |        |  
|Federal                                                                                                                                                                            |  |                       | (13,973 | ) |      |   | 2,433  |      |  |   | (593   | )
|State                                                                                                                                                                              |  |                       | (1,118  | ) |      |   | (4     | )    |  |   | (91    | )
|Foreign                                                                                                                                                                            |  |                       | (146    | ) |      |   | 106    |      |  |   | (448   | )
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|                                                                                                                                                                                   |  |                       | (15,237 | ) |      |   | 2,535  |      |  |   | (1,132 | )
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|Total provision for income taxes                                                                                                                                                   |  | $                     | 3,124   |   |      | $ | 30,691 |      |  | $ | 23,774 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|Income (loss) before provision for income taxes was as follows:                                                                                                                    |  |                       |         |   |      |   |        |      |  |   |        |  
|United States                                                                                                                                                                      |  | $                     | (22,770 | ) |      | $ | 52,462 |      |  | $ | 36,443 |  
|Foreign                                                                                                                                                                            |  |                       | 27,161  |   |      |   | 38,376 |      |  |   | 32,812 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|                                                                                                                                                                                   |  | $                     | 4,391   |   |      | $ | 90,838 |      |  | $ | 69,255 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|A reconciliation of the provision (benefit) for income taxes to the amount computed by applying the statutory federal income tax rate to
income before income taxes is as follows: |  |                       |         |   |      |   |        |      |  |   |        |  
|Federal statutory rate                                                                                                                                                             |  | $                     | 1,537   |   |      | $ | 31,793 |      |  | $ | 24,239 |  
|State income taxes, net of federal tax benefit                                                                                                                                     |  |                       | (790    | ) |      |   | 1,205  |      |  |   | 937    |  
|Tax on foreign earnings                                                                                                                                                            |  |                       | (2,288  | ) |      |   | (3,047 | )    |  |   | 352    |  
|Net change in valuation allowance                                                                                                                                                  |  |                       | 2,618   |   |      |   | 1,749  |      |  |   | (1,417 | )
|U.S. export sales                                                                                                                                                                  |  |                       |        |   |      |   |       |      |  |   | (200   | )
|International financing                                                                                                                                                            |  |                       |        |   |      |   | (168   | )    |  |   | (373   | )
|Stock options                                                                                                                                                                      |  |                       | 280     |   |      |   | 70     |      |  |   | 362    |  
|U.S. manufacturing deduction                                                                                                                                                       |  |                       | (260    | ) |      |   | (453   | )    |  |   | (112   | )
|R&D credit                                                                                                                                                                         |  |                       | (118    | ) |      |   |       |      |  |   |       |  
|FIN 48 expense                                                                                                                                                                     |  |                       | 288     |   |      |   |       |      |  |   |       |  
|Other                                                                                                                                                                              |  |                       | 86      |   |      |   | (458   | )    |  |   | (14    | )
|Prior year foreign tax credit                                                                                                                                                      |  |                       | (676    | ) |      |   |       |      |  |   |       |  
|Impairment of goodwill and intangibles assets                                                                                                                                      |  |                       | 2,447   |   |      |   |       |      |  |   |       |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|                                                                                                                                                                                   |  | $                     | 3,124   |   |      | $ | 30,691 |      |  | $ | 23,774 |  
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  
|Effective tax rate                                                                                                                                                                 |  |                       | 71.1    | % |      |   | 33.8   | %    |  |   | 34.3   | %
|                                                                                                                                                                                   |  |                       |         |   |      |   |        |      |  |   |        |  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 9Income Taxes (Continued)



The components of deferred income tax assets and
liabilities recorded on the consolidated balance sheet are as follows (in thousands):



|                                  |  |            |         |   |      |   |         |  
|--------------------------------- |  | ---------- | ------- | - | ---- | - | ------- | -
|                                  |  | January 31 |        
|                                  |  | 2009       |         |   | 2008 |  
|Deferred tax assets:              |  |            |         |   |      |   |         |  
|Accruals                          |  | $          | 4,191   |   |      | $ | 3,997   |  
|Environmental                     |  |            | 1,704   |   |      |   | 2,109   |  
|Employee benefits                 |  |            | 7,385   |   |      |   | 6,501   |  
|Foreign tax credits               |  |            | 4,799   |   |      |   | 3,269   |  
|Foreign net operating losses      |  |            | 12,493  |   |      |   | 12,704  |  
|Goodwill and intangible assets    |  |            | 11,921  |   |      |   |        |  
|Other                             |  |            | 58      |   |      |   | 1,917   |  
|                                  |  |            |         |   |      |   |         |  
|                                  |  |            | 42,551  |   |      |   | 30,497  |  
|Less: Valuation allowance         |  |            | (12,444 | ) |      |   | (11,672 | )
|                                  |  |            |         |   |      |   |         |  
|                                  |  |            | 30,107  |   |      |   | 18,825  |  
|Deferred tax liabilities:         |  |            |         |   |      |   |         |  
|Depreciation                      |  |            | (4,624  | ) |      |   | (4,238  | )
|Cumulative translation adjustment |  |            | (1,056  | ) |      |   | (3,808  | )
|Other                             |  |            | (705    | ) |      |   | (4,328  | )
|                                  |  |            |         |   |      |   |         |  
|                                  |  |            | (6,385  | ) |      |   | (12,374 | )
|                                  |  |            |         |   |      |   |         |  
|Total net deferred tax asset      |  | $          | 23,722  |   |      | $ | 6,451   |  
|                                  |  |            |         |   |      |   |         |  

The net deferred tax asset is presented in our consolidated balance sheets as follows (in
thousands):



|                                          |  |            |        |   |      |   |        |  
|----------------------------------------- |  | ---------- | ------ | - | ---- | - | ------ | -
|                                          |  | January 31 |       
|                                          |  | 2009       |        |   | 2008 |  
|Deferred income taxescurrent asset       |  | $          | 4,712  |   |      | $ | 6,213  |  
|Deferred income taxeslong-term asset     |  |            | 21,347 |   |      |   | 5,948  |  
|Deferred income taxeslong-term liability |  |            | (2,337 | ) |      |   | (5,710 | )
|                                          |  |            |        |   |      |   |        |  
|                                          |  | $          | 23,722 |   |      | $ | 6,451  |  
|                                          |  |            |        |   |      |   |        |  

In assessing the realizability of deferred tax assets, we consider whether it is more likely than
not that some or all of the deferred tax assets will not be realized. We consider taxable income in prior carryback years to the extent permitted under the tax law, scheduled reversal of deferred tax liabilities, projected future taxable income and
tax planning strategies in making this assessment. We believe we will be able to generate sufficient taxable income to realize our deferred tax assets, net of valuation allowances, but changes in our operations due to market conditions could require
the recording of additional valuation allowances in the future. It is reasonably possible that a change to the valuation allowance in the next year could be material.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 9Income Taxes (Continued)



We recorded valuation allowances for the years ended January 31, 2009 and January 31, 2008 of approximately $12.5 million and $11.7 million, respectively. The change in the valuation allowance for each year
is as follows (in thousands):



|                                      |  |                       |        |   |      |   |      
|------------------------------------- |  | --------------------- | ------ | - | ---- | - | -----
|                                      |  | Year Ended January 31
|                                      |  | 2009                  |        |   | 2008
|Additional valuation allowance        |  | $                     | 2,618  |   |      | $ | 1,749
|Foreign currency changes              |  |                       | (1,846 | ) |      |   | 1,171
|                                      |  |                       |        |   |      |   |      
|Total increase in valuation allowance |  | $                     | 772    |   |      | $ | 2,920
|                                      |  |                       |        |   |      |   |      

As of January 31, 2009, we have the following foreign net operating loss carryforwards
available to offset future taxable income (in thousands):



|                |  |                    |        |            |          
|--------------- |  | ------------------ | ------ | ---------- | ---------
|                |  | NetOperatingLosses |        | Expiration
|The Netherlands |  | $                  | 26,478 |            | 2012-2018
|Germany         |  |                    | 14,673 |            | None     
|France          |  |                    | 2,012  |            | None     
|Sweden          |  |                    | 2,213  |            | None     
|Australia       |  |                    | 163    |            | None     
|                |  |                    |        |            |          
|                |  | $                  | 45,539 |            |          
|                |  |                    |        |            |          

Valuation allowances have been provided for all net operating losses in Europe, as management has
determined that it is more likely than not we would not realize the deferred tax asset resulting from these net operating losses in the foreseeable future.

A deferred tax asset of $4.8 million at January 31, 2009 has been recognized for U.S. foreign tax credits attributed to repatriated foreign earnings. Realization of this deferred tax asset is dependent on
generating sufficient foreign-sourced taxable income in the United States over a ten year period ending in fiscal 2017. Foreign-sourced taxable income includes dividends and royalties from foreign subsidiaries.

A deferred tax asset of $11.9 million has been recognized for goodwill and intangible assets on which an impairment charge was taken for book purposes
during the year. Realization of this deferred tax asset is dependent on generating future taxable income in the United States as the goodwill and intangibles are amortized for tax purposes at approximately $2.6 million per year through 2022.

Deferred taxes have not been provided on the excess book basis in the shares of certain foreign subsidiaries in the amount of $13.6 million
at January 31, 2009, representing approximately $57 million of undistributed earnings of consolidated foreign subsidiaries. It is managements intent for such earnings to be reinvested by the subsidiaries or to be repatriated only when it
would be tax effective through the utilization of foreign tax credits. These basis differences could reverse through a sale of the subsidiaries, the receipt of dividends from the subsidiaries, as well as various other events.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 9Income Taxes (Continued)



As of January 31, 2009 our liability for uncertain
tax positions under FASB Interpretation No. 48 (FIN 48) was $1.3 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



|                                                              |  |                       |       |      |   |      |  
|------------------------------------------------------------- |  | --------------------- | ----- | ---- | - | ---- | -
|                                                              |  | Year Ended January 31 |      
|                                                              |  | 2009                  |       | 2008 |  
|Beginning of year unrecognized tax benefit                    |  | $                     | 234   |      | $ | 325  |  
|Gross increases for tax positions related to the current year |  |                       | 172   |      |   | 13   |  
|Gross increases for tax positions related to the prior years  |  |                       | 631   |      |   | 66   |  
|Gross decreases for tax positions related to the prior years  |  |                       |      |      |   | (170 | )
|                                                              |  |                       |       |      |   |      |  
|End of year unrecognized tax benefit                          |  | $                     | 1,037 |      | $ | 234  |  
|                                                              |  |                       |       |      |   |      |  

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of
January 31, 2009, we had approximately $240,000 of cumulative accrued interest and penalties related to uncertain tax positions, of which approximately $157,000 was recognized during the year.

We are subject to taxation primarily in the U.S., Canada, China and various European countries, as well as other various state and foreign jurisdictions.
The Internal Revenue Service is currently reviewing our U.S. income tax return for fiscal years 20042007. The IRS has proposed an adjustment of $5 million related to interest deductions reported on tax returns for the 2004 and 2005 tax years.
These adjustments would result in an additional federal and state tax liability of approximately $1.8 million. We are in the process of appealing the issue with the IRS and have determined that we will more-likely-than-not prevail on the issue. No
amount has been recorded in our financial statements as of January 31, 2009 related to this matter. As of January 31, 2009, we remain subject to examination in various state and foreign jurisdictions for the 1998-2007 tax years.

Note 10Commitments and Contingencies

Environmental Matters

We are subject to environmental laws and regulations, which include obligations to remove or mitigate
environmental effects of past disposal and release of certain wastes and substances at various sites. We record liabilities for affected sites when environmental assessments indicate probable cleanup and the costs can be reasonably estimated. Other
than for costs of assessments themselves, the timing and amount of these liabilities is determined based on the estimated costs of remediation activities and our commitment to a formal plan of action, such as an approved remediation plan. The
reliability and precision of the loss estimates are affected by numerous factors, such as different stages of site evaluation and reevaluation of the degree of remediation required. We adjust our liabilities as new remediation requirements are
defined, as information becomes available permitting reasonable estimates to be made and to reflect new and changing facts.

It is
reasonably possible that changes in estimates will occur in the near term and the related adjustments to environmental liabilities may have a material impact on our net income. Unasserted claims are not currently reflected in our environmental
remediation liabilities. It is also reasonably possible that these claims may also have a material impact on our net income if asserted. We cannot estimate at this time the amount of any additional loss or range of loss that is reasonably possible.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Commitments and Contingencies (Continued)



Our specific environmental matters consist of the following:

Fairview, Oregon

In 1996, the Oregon Department of Environmental Quality issued two Records of Decision impacting our
Fairview, Oregon manufacturing facility. The records of decision required us to initiate remedial activities related to the cleanup of groundwater contamination at and near the facility. Remediation activities have been conducted at or near the
facility since 1996 and current estimates provide for some level of activity to continue through 2019. Costs of certain remediation activities at the facility are shared with The Boeing Company, with Cascade paying 70% of these costs. The recorded
liability for the ongoing remediation activities at our Fairview facility was $3.7 million and $4.8 million at January 31, 2009 and 2008, respectively.

Springfield, Ohio

In 1994, we entered into a consent order with the Ohio Environmental Protection Agency, which required
the installation of remediation systems for the cleanup of groundwater contamination at our Springfield, Ohio facility. The current estimate is that the remediation activities will continue through 2014. The recorded liability for ongoing
remediation activities in Springfield was $900,000 at January 31, 2009 and 2008.

Presented below is a roll forward of our
environmental liabilities and expenses for the three years ended January 31, 2009 (in thousands):



|                            |  |          |        |   |             |   |       |       |  |   |       |   |  |   |        |  
|--------------------------- |  | -------- | ------ | - | ----------- | - | ----- | ----- |  | - | ----- | - |  | - | ------ | -
|                            |  | Fairview |        |   | Springfield |   |       | Other |  |   | Total |  
|Balance at January 31, 2006 |  | $        | 6,661  |   |             | $ | 1,138 |       |  | $ | 136   |   |  | $ | 7,935  |  
|Accrued                     |  |          |       |   |             |   |      |       |  |   | (136  | ) |  |   | (136   | )
|Cash Payments               |  |          | (786   | ) |             |   | (151  | )     |  |   |      |   |  |   | (937   | )
|                            |  |          |        |   |             |   |       |       |  |   |       |   |  |   |        |  
|Balance at January 31, 2007 |  | $        | 5,875  |   |             | $ | 987   |       |  | $ |      |   |  | $ | 6,862  |  
|Accrued                     |  |          | (75    | ) |             |   | 75    |       |  |   |      |   |  |   |       |  
|Cash Payments               |  |          | (952   | ) |             |   | (173  | )     |  |   |      |   |  |   | (1,125 | )
|                            |  |          |        |   |             |   |       |       |  |   |       |   |  |   |        |  
|Balance at January 31, 2008 |  | $        | 4,848  |   |             | $ | 889   |       |  | $ |      |   |  | $ | 5,737  |  
|Accrued                     |  |          | (157   | ) |             |   | 157   |       |  |   |      |   |  |   |       |  
|Cash Payments               |  |          | (1,031 | ) |             |   | (131  | )     |  |   |      |   |  |   | (1,162 | )
|                            |  |          |        |   |             |   |       |       |  |   |       |   |  |   |        |  
|Balance at January 31, 2009 |  | $        | 3,660  |   |             | $ | 915   |       |  | $ |      |   |  | $ | 4,575  |  
|                            |  |          |        |   |             |   |       |       |  |   |       |   |  |   |        |  

Lease Commitments

We lease certain facilities and equipment under noncancelable operating leases. Rent expense for the years ended January 31, 2009, 2008, and 2007 totaled $3.6 million, $3.4 million and $2.5 million,
respectively. Future minimum rental commitments under these leases as of January 31, 2009 are as follows (in thousands):



|     |  |   |      
|---- |  | - | -----
|2010 |  | $ | 2,661
|2011 |  |   | 1,865
|2012 |  |   | 933  
|2013 |  |   | 54   
|2014 |  |   | 5    
|     |  |   |      
|     |  | $ | 5,518
|     |  |   |      



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Commitments and
Contingencies (Continued)



Legal Proceedings

We are subject to legal proceedings, claims and litigation, in addition to the environmental matters previously discussed, arising in the ordinary course
of business. While the outcome of these matters is currently not determinable, management does not expect the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, result of operations,
or cash flows.

Insurance Litigation

On April 9, 2007, we entered into a settlement agreement with Employers Reinsurance Corporation with respect to litigation to recover various expenses incurred in connection with environmental and related proceedings. The recovery from
the settlement, recorded during the first quarter of fiscal 2008, was $16 million, net of expenses. In connection with the settlement, we released all rights we might have under insurance policies issued by Employers Reinsurance Corporation and
certain related entities. This concluded all litigation against our insurance companies with regard to environmental matters.

Note 11Supplemental Cash Flow Information



|                                                 |  |                       |        |   |      |   |        |      |  |   |        |  
|------------------------------------------------ |  | --------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                 |  | Year Ended January 31 |       
|                                                 |  | 2009                  |        |   | 2008 |   |        | 2007 | 
|                                                 |  | (In thousands)        |       
|Cash paid during period for:                     |  |                       |        |   |      |   |        |      |  |   |        |  
|Interest                                         |  | $                     | 4,281  |   |      | $ | 3,970  |      |  | $ | 2,403  |  
|Income taxes                                     |  | $                     | 18,442 |   |      | $ | 27,786 |      |  | $ | 25,776 |  
|Business acquisitions:                           |  |                       |        |   |      |   |        |      |  |   |        |  
|Accounts receivable and other assets             |  | $                     |       |   |      | $ | 935    |      |  | $ | 2,845  |  
|Inventories                                      |  |                       |       |   |      |   | 818    |      |  |   | 2,389  |  
|Property, plant and equipment                    |  |                       |       |   |      |   | 296    |      |  |   | 2,179  |  
|Goodwill                                         |  |                       |       |   |      |   | 6,423  |      |  |   | 22,025 |  
|Intangible asset-customer relationships          |  |                       |       |   |      |   | 5,400  |      |  |   | 11,800 |  
|Intangible asset-intellectual property and other |  |                       |       |   |      |   | 1,900  |      |  |   | 4,300  |  
|Accounts payable and other liabilities assumed   |  |                       |       |   |      |   | (708   | )    |  |   | (1,677 | )
|Notes payable assumed                            |  |                       |       |   |      |   | (931   | )    |  |   | (3,606 | )
|Deferred income tax                              |  |                       |       |   |      |   | (2,604 | )    |  |   |       |  
|                                                 |  |                       |        |   |      |   |        |      |  |   |        |  
|Net cash paid for acquisitions                   |  | $                     |       |   |      | $ | 11,529 |      |  | $ | 40,255 |  
|                                                 |  |                       |        |   |      |   |        |      |  |   |        |  
|Supplemental disclosure of noncash information:  |  |                       |        |   |      |   |        |      |  |   |        |  
|Minimum pension liability adjustment, net of tax |  | $                     | (1,144 | ) |      | $ | (562   | )    |  | $ | (605   | )
|Liability for common stock repurchase            |  | $                     |       |   |      | $ | 2,310  |      |  | $ | 2,278  |  

Note 12Share-Based Compensation Plans

We have granted three types of share-based awards, stock appreciation rights (SARS), restricted stock and stock options under our share-based compensation
plans to officers, key managers and directors. The grant prices are established by our Board of Directors Compensation Committee at the time the awards are granted. We issue new common shares upon the exercise of all awards.

SARS provide the holder the right to receive an amount, payable in our common shares, equal to the excess of the market value of our common shares on the
date of exercise (intrinsic value) over the base price at the



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 12Share-Based Compensation Plans (Continued)



time the right was granted. The base price may not be less than the market price of our common shares on the date of grant. All SARS vest ratably over a four
year period and have a term of ten years.

During the second quarter of fiscal 2008, our shareholders approved a proposal to amend the SARS
plan to permit the issuance of restricted shares of common stock. Upon the granting of restricted stock, common shares are issued to the recipient, but the shares may not be sold, assigned, transferred, pledged, or disposed of by the recipient until
vested. Regardless of vesting, restricted shares have full voting rights and any dividends declared will be paid to the restricted stock recipient. Restricted shares vest ratably over a period of three years for officers and four years for
directors. The number of restricted shares issued to directors is based on the market value of our shares on the date of grant.

The amended
SARS plan provides for the issuance of a maximum of 750,000 shares of common stock upon the exercise of SARS or issuance of restricted stock. As of January 31, 2009, a total of 246,000 shares of common stock have been issued under the SARS
plan, which includes 65,000 shares of restricted stock.

Stock options provide the holder the right to receive our common shares at an
established price. We have reserved 1,400,000 shares of common stock under our stock option plan. As of January 31, 2009, a total of 1,090,000 shares have been issued upon the exercise of stock options. No additional stock options can be
granted under the terms of the plan. All outstanding stock options vest ratably over a four year period and have a term of ten years.

We
calculate share-based compensation cost using the Black-Scholes option pricing model. The range of assumptions used to compute share-based compensation is as follows:



|                                             |  |                       |       |   |      |   |       |      |  |   |       |  
|-------------------------------------------- |  | --------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                             |  | Year Ended January 31 |      
|                                             |  | 2009                  |       |   | 2008 |   |       | 2007 | 
|Risk-free interest rate                      |  |                       | 3.5   | % |      |   | 5.1   | %    |  |   | 5.0   | %
|Expected volatility                          |  |                       | 40    | % |      |   | 41    | %    |  |   | 41    | %
|Expected dividend yield                      |  |                       | 1.8   | % |      |   | 1.0   | %    |  |   | 1.6   | %
|Expected life (in years)                     |  |                       | 6.5   |   |      |   | 7     |      |  |   | 6     |  
|Weighted average fair value at date of grant |  | $                     | 16.71 |   |      | $ | 33.31 |      |  | $ | 15.24 |  

Expected volatility is based on the historical volatility of the price of our common shares over
the past six years. We use historical information to estimate award exercise and forfeitures within the valuation model. The expected term of awards is derived from the output of the option valuation model and represents the period of time that
options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Compensation cost is recognized using a straight-line
method over the vesting or service period and is net of estimated forfeitures.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 12Share-Based Compensation
Plans (Continued)



A summary of award grants under the
plans at January 31, 2009, 2008, and 2007, excluding restricted stock, together with changes during the periods then ended are presented in the following table (in thousands, except per share amounts):



|                            |  |                   |   |                           |                                         |       |                   |       |   |                                         |   |      
|--------------------------- |  | ----------------- | - | ------------------------- | --------------------------------------- | ----- | ----------------- | ----- | - | --------------------------------------- | - | -----
|                            |  | Stock Options     |   | Stock Appreciation Rights
|                            |  | OutstandingAwards |   |                           | Weighted AverageExercise PricePer Share |       | OutstandingAwards |       |   | Weighted AverageExercise PricePer
Share
|Balance at January 31, 2006 |  | 841               |   |                           | $                                       | 14.10 |                   | 1,019 |   |                                         | $ | 29.83
|Granted                     |  |                  |   |                           |                                         |      |                   | 255   |   |                                         |   | 37.05
|Exercised                   |  | (246              | ) |                           |                                         | 14.47 |                   | (126  | ) |                                         |   | 28.65
|Forfeited                   |  | (25               | ) |                           |                                         | 17.76 |                   | (117  | ) |                                         |   | 31.57
|                            |  |                   |   |                           |                                         |       |                   |       |   |                                         |   |      
|Balance at January 31, 2007 |  | 570               |   |                           |                                         | 13.79 |                   | 1,031 |   |                                         |   | 31.56
|Granted                     |  |                  |   |                           |                                         |      |                   | 66    |   |                                         |   | 73.73
|Exercised                   |  | (276              | ) |                           |                                         | 14.02 |                   | (195  | ) |                                         |   | 30.60
|Forfeited                   |  | (8                | ) |                           |                                         | 20.14 |                   | (87   | ) |                                         |   | 35.00
|                            |  |                   |   |                           |                                         |       |                   |       |   |                                         |   |      
|Balance at January 31, 2008 |  | 286               |   |                           |                                         | 13.39 |                   | 815   |   |                                         |   | 34.84
|Granted                     |  |                  |   |                           |                                         |      |                   | 47    |   |                                         |   | 44.24
|Exercised                   |  | (7                | ) |                           |                                         | 18.60 |                   |      |   |                                         |   |     
|Forfeited                   |  |                  |   |                           |                                         |      |                   | (56   | ) |                                         |   | 41.16
|                            |  |                   |   |                           |                                         |       |                   |       |   |                                         |   |      
|Balance at January 31, 2009 |  | 279               |   |                           | $                                       | 13.26 |                   | 806   |   |                                         | $ | 34.95
|                            |  |                   |   |                           |                                         |       |                   |       |   |                                         |   |      



|                                              |  |                 |   |  |                                               |      
|--------------------------------------------- |  | --------------- | - |  | --------------------------------------------- | -----
|Restricted Stock Awards                       |  | Number ofShares |   |  | Weighted AverageGrant DateFair ValuePer Share
|Unvested restricted stock at January 31, 2007 |  |                |   |  | $                                             |     
|Granted                                       |  | 42              |   |  |                                               | 73.73
|Vested                                        |  |                |   |  |                                               |     
|Forfeited                                     |  |                |   |  |                                               |     
|                                              |  |                 |   |  |                                               |      
|Unvested restricted stock at January 31, 2008 |  | 42              |   |  |                                               | 73.73
|Granted                                       |  | 23              |   |  |                                               | 44.24
|Vested                                        |  | (14             | ) |  |                                               | 73.73
|Forfeited                                     |  |                |   |  |                                               |     
|                                              |  |                 |   |  |                                               |      
|Unvested restricted stock at January 31, 2009 |  | 51              |   |  | $                                             | 60.51
|                                              |  |                 |   |  |                                               |      

A summary of award activity under the Plans as of January 31, 2009, is presented below:



|                                                     |                |        |  |                               |                |                         |   |                                |  |  
|---------------------------------------------------- | -------------- | ------ |  | ----------------------------- | -------------- | ----------------------- | - | ------------------------------ |  | -
|                                                     |                | Awards |  | Weighted-AverageExercisePrice |                | AggregateIntrinsicValue |   | WeightedAverageContractualLife
|                                                     | (In thousands) |        |  |                               | (In thousands) |                         |  
|Outstanding at January 31, 2009                      |                | 1,085  |  | $                             | 29             |                         | $ | 3,003                          |  | 6
|                                                     |                |        |  |                               |                |                         |   |                                |  |  
|Outstanding at January 31, 2009 and expected to vest |                | 214    |  | $                             | 44             |                         | $ |                               |  | 8
|                                                     |                |        |  |                               |                |                         |   |                                |  |  
|Exercisable at January 31, 2009                      |                | 820    |  | $                             | 25             |                         | $ | 3,003                          |  | 5
|                                                     |                |        |  |                               |                |                         |   |                                |  |  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 12Share-Based Compensation Plans (Continued)



Aggregate intrinsic value excludes 575,000 SARs with an exercise price in excess of the market value of our common stock as of January 31, 2009.

The total intrinsic value of options exercised during the years ended January 31, 2009, 2008 and 2007 was $189,000, $15.4 million and
$8.4 million, respectively. The total intrinsic value of SARS exercised during the years ended January 31, 2008 and 2007 was $8.7 million, and $2.2 million, respectively. No SARs were exercised during the year ended January 31, 2009.

The tax benefit recognized from share-based awards exercised during the years ended January 31, 2008 and 2007 was $3.1 million and
$1.1 million, respectively. No tax benefit was recognized during the year ended January 31, 2009.

A summary of the status of the
Plans nonvested awards as of January 31, 2009 is presented below (in thousands, except per share amounts):



|                              |  |                 |   |                           |                                                |      |                 |      |   |                                                |   |      
|----------------------------- |  | --------------- | - | ------------------------- | ---------------------------------------------- | ---- | --------------- | ---- | - | ---------------------------------------------- | - | -----
|                              |  | Stock Options   |   | Stock Appreciation Rights
|                              |  | NonvestedAwards |   |                           | Weighted AverageGrant-Date FairValue Per Award |      | NonvestedAwards |      |   | Weighted AverageGrant-Date FairValue Per Award
|Nonvested at January 31, 2006 |  | 299             |   |                           | $                                              | 5.23 |                 | 948  |   |                                                | $ | 13.09
|Granted                       |  |                |   |                           |                                                |     |                 | 255  |   |                                                |   | 15.24
|Vested                        |  | (159            | ) |                           |                                                | 4.91 |                 | (265 | ) |                                                |   | 12.49
|Forfeited                     |  | (25             | ) |                           |                                                | 5.86 |                 | (115 | ) |                                                |   | 13.65
|                              |  |                 |   |                           |                                                |      |                 |      |   |                                                |   |      
|Nonvested at January 31, 2007 |  | 115             |   |                           |                                                | 5.53 |                 | 823  |   |                                                |   | 13.87
|Granted                       |  |                |   |                           |                                                |     |                 | 66   |   |                                                |   | 33.31
|Vested                        |  | (89             | ) |                           |                                                | 4.99 |                 | (280 | ) |                                                |   | 13.00
|Forfeited                     |  | (7              | ) |                           |                                                | 6.98 |                 | (88  | ) |                                                |   | 15.04
|                              |  |                 |   |                           |                                                |      |                 |      |   |                                                |   |      
|Nonvested at January 31, 2008 |  | 19              |   |                           |                                                | 7.45 |                 | 521  |   |                                                |   | 16.60
|Granted                       |  |                |   |                           |                                                |     |                 | 47   |   |                                                |   | 16.71
|Vested                        |  | (19             | ) |                           |                                                | 7.45 |                 | (251 | ) |                                                |   | 14.07
|Forfeited                     |  |                |   |                           |                                                |     |                 | (51  | ) |                                                |   | 18.00
|                              |  |                 |   |                           |                                                |      |                 |      |   |                                                |   |      
|Nonvested at January 31, 2009 |  |                |   |                           | $                                              |     |                 | 266  |   |                                                | $ | 18.73
|                              |  |                 |   |                           |                                                |      |                 |      |   |                                                |   |      

As of January 31, 2009, there was $5.4 million of total unrecognized compensation cost related
to nonvested share-based compensation awards granted under the Plans. That cost is expected to be recognized over a weighted average period of 1.9 years. The following table represents as of January 31, 2009 the share-based compensation costs
to be recognized in future periods (in thousands) for awards granted to date:



|            |  |        |      
|----------- |  | ------ | -----
|Fiscal Year |  | Amount
|2010        |  | $      | 3,327
|2011        |  |        | 1,518
|2012        |  |        | 519  
|2013        |  |        | 90   
|            |  |        |      
|            |  | $      | 5,454
|            |  |        |      



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Employee Benefit Plans



We sponsor various defined benefit pension and postretirement benefit
plans. The following table presents the changes in benefit obligations, changes in plan assets and funded status of these plans. Benefit obligation balances presented in the table reflect the projected benefit obligation (PBO) for our defined
benefit pension plans and accumulated postretirement benefit obligations (APBO) for the postretirement benefit plan. Both the PBO and APBO include the estimated present value of future benefits that will be paid to plan participants, based on
expected future salary growth and employee services rendered through the measurement date. We use a measurement date of January 31 for all defined benefit pension plans and the postretirement plan.



|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|--------------------------------------------------------------------------------- |  | --------------------- | ------ | - | ---------------------- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - | ---- | - | ------ | - |  | - | ------ | -
|                                                                                  |  | Year Ended January 31 |        |   | Year ended January 31  |  
|                                                                                  |  | Defined Benefit       |        |   | Postretirement Benefit |  
|                                                                                  |  | 2009                  |        |   | 2008                   |   |        | 2007 |  |   | 2009   |   |  | 2008 |        |   | 2007 |  
|                                                                                  |  | (In thousands)        |       
|Change in benefit obligation                                                      |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Benefit obligation at beginning of year                                           |  | $                     | 10,285 |   |                        | $ | 9,899  |      |  | $ | 10,713 |   |  | $    | 7,087  |   |      | $ | 7,513  |   |  | $ | 8,490  |  
|Service cost                                                                      |  |                       | 21     |   |                        |   | 34     |      |  |   | 59     |   |  |      | 104    |   |      |   | 121    |   |  |   | 137    |  
|Interest cost                                                                     |  |                       | 533    |   |                        |   | 524    |      |  |   | 480    |   |  |      | 432    |   |      |   | 421    |   |  |   | 456    |  
|Participant contributions                                                         |  |                       |       |   |                        |   |       |      |  |   |       |   |  |      | 338    |   |      |   | 324    |   |  |   | 325    |  
|Adjustment due to measurement date                                                |  |                       |       |   |                        |   |       |      |  |   |       |   |  |      | 45     |   |      |   |       |   |  |   |       |  
|Benefits paid                                                                     |  |                       | (279   | ) |                        |   | (313   | )    |  |   | (1,114 | ) |  |      | (546   | ) |      |   | (505   | ) |  |   | (544   | )
|Actuarial gain                                                                    |  |                       | (2,016 | ) |                        |   | (116   | )    |  |   | (1,300 | ) |  |      | (343   | ) |      |   | (787   | ) |  |   | (1,351 | )
|Settlements                                                                       |  |                       |       |   |                        |   | 83     |      |  |   | 84     |   |  |      |       |   |      |   |       |   |  |   |       |  
|Exchange rate changes                                                             |  |                       | (2,390 | ) |                        |   | 174    |      |  |   | 977    |   |  |      |       |   |      |   |       |   |  |   |       |  
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Benefit obligation at end of year                                                 |  |                       | 6,154  |   |                        |   | 10,285 |      |  |   | 9,899  |   |  |      | 7,117  |   |      |   | 7,087  |   |  |   | 7,513  |  
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Change in plan assets                                                             |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Fair value of plan assets at beginning of year                                    |  |                       | 7,942  |   |                        |   | 7,693  |      |  |   | 7,195  |   |  |      |       |   |      |   |       |   |  |   |       |  
|Actual return on plan assets                                                      |  |                       | (926   | ) |                        |   | (26    | )    |  |   | 407    |   |  |      |       |   |      |   |       |   |  |   |       |  
|Employer contributions                                                            |  |                       | 363    |   |                        |   | 496    |      |  |   | 498    |   |  |      | 208    |   |      |   | 181    |   |  |   | 219    |  
|Participant contributions                                                         |  |                       |       |   |                        |   |       |      |  |   |       |   |  |      | 338    |   |      |   | 324    |   |  |   | 325    |  
|Benefits paid                                                                     |  |                       | (218   | ) |                        |   | (313   | )    |  |   | (1,114 | ) |  |      | (546   | ) |      |   | (505   | ) |  |   | (544   | )
|Exchange rate changes                                                             |  |                       | (1,997 | ) |                        |   | 92     |      |  |   | 707    |   |  |      |       |   |      |   |       |   |  |   |       |  
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Fair value of plan assets at end of year                                          |  |                       | 5,164  |   |                        |   | 7,942  |      |  |   | 7,693  |   |  |      |       |   |      |   |       |   |  |   |       |  
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Amounts recognized in the balance sheet consist of                                |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Current liability                                                                 |  |                       | (321   | ) |                        |   | (270   | )    |  |   |       |   |  |      | (373   | ) |      |   | (336   | ) |  |   |       |  
|Non-current liability                                                             |  |                       | (669   | ) |                        |   | (2,073 | )    |  |   | (2,206 | ) |  |      | (6,744 | ) |      |   | (6,751 | ) |  |   | (7,513 | )
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Net amount recognized at year-end                                                 |  | $                     | (990   | ) |                        | $ | (2,343 | )    |  | $ | (2,206 | ) |  | $    | (7,117 | ) |      | $ | (7,087 | ) |  | $ | (7,513 | )
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Amounts recognized in accumulated other comprehensive income (pre-tax) consist of |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Net actuarial loss                                                                |  | $                     | 931    |   |                        | $ | 2,124  |      |  | $ | 2,087  |   |  | $    | 393    |   |      | $ | 735    |   |  | $ | 1,715  |  
|Prior service cost credit                                                         |  |                       |       |   |                        |   |       |      |  |   |       |   |  |      | (514   | ) |      |   | (591   | ) |  |   | (668   | )
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  
|Total                                                                             |  | $                     | 931    |   |                        | $ | 2,124  |      |  | $ | 2,087  |   |  | $    | (121   | ) |      | $ | 144    |   |  | $ | 1,047  |  
|                                                                                  |  |                       |        |   |                        |   |        |      |  |   |        |   |  |      |        |   |      |   |        |   |  |   |        |  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Employee Benefit Plans (Continued)



|                                                              |  |                       |      |   |                        |   |      |      |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|------------------------------------------------------------- |  | --------------------- | ---- | - | ---------------------- | - | ---- | ---- |  | - | ---- | - |  | ---- | --- | - | ---- | - | --- | - |  | - | --- | -
|                                                              |  | Year Ended January 31 |      |   | Year ended January 31  |  
|                                                              |  | Defined Benefit       |      |   | Postretirement Benefit |  
|                                                              |  | 2009                  |      |   | 2008                   |   |      | 2007 |  |   | 2009 |   |  | 2008 |     |   | 2007 |  
|                                                              |  | (In thousands)        |     
|Components of net periodic benefit cost                       |  |                       |      |   |                        |   |      |      |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|Service cost                                                  |  | $                     | 21   |   |                        | $ | 34   |      |  | $ | 59   |   |  | $    | 104 |   |      | $ | 121 |   |  | $ | 136 |  
|Interest cost                                                 |  |                       | 533  |   |                        |   | 524  |      |  |   | 480  |   |  |      | 432 |   |      |   | 421 |   |  |   | 456 |  
|Expected return on plan assets                                |  |                       | (475 | ) |                        |   | (516 | )    |  |   | (458 | ) |  |      |    |   |      |   |    |   |  |   |    |  
|Settlement loss                                               |  |                       |     |   |                        |   | 82   |      |  |   | 140  |   |  |      |    |   |      |   |    |   |  |   |    |  
|Amortization of prior service credit                          |  |                       |     |   |                        |   |     |      |  |   |     |   |  |      | (77 | ) |      |   | (77 | ) |  |   | (77 | )
|Recognized net actuarial loss                                 |  |                       | 82   |   |                        |   | 102  |      |  |   | 144  |   |  |      | 6   |   |      |   | 193 |   |  |   | 443 |  
|                                                              |  |                       |      |   |                        |   |      |      |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|Net periodic benefit cost                                     |  | $                     | 161  |   |                        | $ | 226  |      |  | $ | 365  |   |  | $    | 465 |   |      | $ | 658 |   |  | $ | 958 |  
|                                                              |  |                       |      |   |                        |   |      |      |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|Weighted-average assumptions                                  |  |                       |      |   |                        |   |      |      |  |   |      |   |  |      |     |   |      |   |     |   |  |   |     |  
|Discount rate for benefit obligation                          |  |                       | 6.9  | % |                        |   | 5.8  | %    |  |   | 5.2  | % |  |      | 6.5 | % |      |   | 6.3 | % |  |   | 5.8 | %
|Discount rate for net periodic benefit cost                   |  |                       | 5.8  | % |                        |   | 5.2  | %    |  |   | 4.7  | % |  |      | 6.3 | % |      |   | 5.8 | % |  |   | 5.5 | %
|Expected long-term rate of return on plan assets              |  |                       | 6.5  | % |                        |   | 6.5  | %    |  |   | 6.5  | % |  |      |    |   |      |   |    |   |  |   |    |  
|Varying rates of increase in compensation levels based on age |  |                       | 3.4  | % |                        |   | 3.3  | %    |  |   | 3.0  | % |  |      |    |   |      |   |    |   |  |   |    |  

The following table reflects the estimated pension benefits and postretirement gross benefit
payments to be paid and medicare subsidy payments and retiree contributions to be received over the next ten years (in thousands):



|            |  |                       |       |                        |   |                      |  |                     |     |  |   |       |  |   |      
|----------- |  | --------------------- | ----- | ---------------------- | - | -------------------- |  | ------------------- | --- |  | - | ----- |  | - | -----
|            |  | Defined Benefit       |       | Postretirement Benefit
|            |  | Gross BenefitPayments |       | MedicareSubsidy        |   | RetireeContributions |  | Net BenefitPayments
|2010        |  | $                     | 189   |                        | $ | 916                  |  | $                   | 85  |  | $ | 458   |  | $ | 373  
|2011        |  |                       | 242   |                        |   | 1,024                |  |                     | 92  |  |   | 498   |  |   | 434  
|2012        |  |                       | 216   |                        |   | 1,125                |  |                     | 103 |  |   | 567   |  |   | 455  
|2013        |  |                       | 185   |                        |   | 1,242                |  |                     | 113 |  |   | 637   |  |   | 492  
|2014        |  |                       | 218   |                        |   | 1,377                |  |                     | 122 |  |   | 726   |  |   | 529  
|2015 - 2019 |  |                       | 1,141 |                        |   | 7,863                |  |                     | 749 |  |   | 4,003 |  |   | 3,111

Our expected contribution in fiscal 2010 to the defined benefit pension plans is $301,000.

The amount in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs in fiscal 2010
include an actuarial loss of $56,000 for our defined benefit plans and a prior service credit of $77,000 for our postretirement plan.

Defined Benefit
Pension Plans

We sponsor defined benefit pension plans covering certain employees in France and England. Benefits under the defined
benefit pension plans are based on years of service and average earnings over a specified period of time. The net periodic cost of our defined benefit pension plans is determined using the projected unit credit method. Several actuarial assumptions
are used to determine the defined benefit pension obligations and net periodic pension cost, the most significant of which are the discount rate, the long-term rate of asset return and changes in compensation levels. Our funding policy for
defined benefit pension plans is to generally make annual contributions based on actuarially determined funding requirements.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Employee Benefit Plans (Continued)



We determine the discount rate for the defined benefit
pension plans each year as of the measurement date, based on a review of interest rates associated with long-term high quality corporate bonds in the geographic region where the plan is maintained.

The expected long-term rate of return on defined benefit pension plan assets assumption is derived based on the historical returns achieved by the pension
trust and anticipated future long-term performance of individual assets classes. Consideration is also given to the appropriate investment strategy and anticipated future distribution of plan assets between asset classes. While this analysis gives
appropriate consideration to recent trust performance and historical returns, the assumption represents a long-term prospective return.

Our
principal objective is to ensure that plan assets are sufficient to enable all future pension liabilities to be paid when due. Plan assets are allocated with a goal to achieve diversification between and within various asset classes to meet
long-term objectives of return, while mitigating against downside risks and considering expected cash flows. The asset allocations for the pension assets at January 31, 2009 and 2008 are as follows:



|               |  |                                       |   |  |                   |   |  |    |  
|-------------- |  | ------------------------------------- | - |  | ----------------- | - |  | -- | -
|               |  | Percentage ofPlan AssetsAt January 31 |   |  | Target allocation |  
|Asset Category |  | 2009                                  |   |  | 2008              |   | 
|Equity         |  | 44                                    | % |  | 52                | % |  | 44 | %
|Debt           |  | 44                                    | % |  | 40                | % |  | 44 | %
|Real estate    |  | 3                                     | % |  | 4                 | % |  | 3  | %
|Cash           |  | 9                                     | % |  | 4                 | % |  | 9  | %

Equity includes domestic and international equity securities, such as common, preferred or other
capital stock, as well as mutual funds. Debt includes domestic and international debt securities, such as U.S. and other foreign government securities, corporate bonds and commercial paper.

The accumulated benefit obligation is the actuarial present value of benefits attributed to employee services rendered to date, excluding assumptions
about future compensation levels. The accumulated benefit obligation for all defined benefit pension plans was $6.2 million at January 31, 2009 and $10.1 million at January 31, 2008. The net underfunded pension liability was $1 million and
$2.3 million as of January 31, 2009 and 2008, respectively. The decrease in the liability in fiscal 2009 is primarily the result of an increase in the discount rate and foreign currency changes.

During fiscal 2007, we terminated our defined benefit pension plan in Canada through the purchase of annuities and a lump sum distribution. We have no
further obligation under this plan.

Postretirement Benefit Plan

We also provide a postretirement benefit plan, consisting of health care coverage to eligible retirees and qualifying dependents in the United States. Benefits under this postretirement benefit plan are generally
based on age at retirement and years of service. The net periodic cost of the postretirement plan is determined using the projected unit credit method. Other significant actuarial assumptions include the discount rate, health care cost trend
rates (rate of growth for medical costs) and rates of retirement and life expectancy of plan participants. We determine our discount rate using a yield curve expected benefit payment methodology based on interest rates associated with
long-term high quality corporate bonds. This methodology uses individual curve rates to discount each future years expected plan benefit payments. We are accruing the estimated future costs of providing postretirement benefits to eligible
active employees during the active service period. Our postretirement plan is



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Employee Benefit Plans (Continued)



not funded and we have no current plans to provide funding other than annual contributions, which represent the benefits paid for the year.

Assumed health care cost trend rates have a significant effect on the amounts reported for our postretirement benefit plan. The assumed health care cost
trend rates used in measuring the APBO were as follows at January 31:



|                                              |  |            |   |  |      |  
|--------------------------------------------- |  | ---------- | - |  | ---- | -
|                                              |  | January 31 |  
|                                              |  | 2009       |   |  | 2008 |  
|Health care cost trend rate assumed next year |  | 8.5        | % |  | 9    | %
|Ultimate trend rate                           |  | 4.5        | % |  | 4.5  | %
|Year ultimate trend rate is reached           |  | 2017       |   |  | 2017 |  

The following presents the effect of a 1% change in health care cost trend rates at
January 31, 2008 (in thousands):



|                                            |  |            |     |            |   |      |  
|------------------------------------------- |  | ---------- | --- | ---------- | - | ---- | -
|                                            |  | 1%Increase |     | 1%Decrease |  
|Change in health care cost trend rate:      |  |            |     |            |   |      |  
|Effect on service and interest costs        |  | $          | 73  |            | $ | (62  | )
|Effect on postretirement benefit obligation |  |            | 853 |            |   | (727 | )

The fiscal 2009 postretirement benefit costs will be based on a 6.25% discount rate.

Defined Contribution Retirement Plans

We sponsor
a number of defined contribution retirement plans. We match employee contributions in varying degrees and also make contributions to certain plans based on a percentage of employee wages. Our expense under these plans was $5.2 million,
$5.4 million and $4.8 million, for the years ended January 31, 2009, 2008 and 2007, respectively.

Note 14Earnings Per Share

The following table presents the calculation of basic and diluted earnings per share (in thousands, except per share amounts):



|                                                            |  |                       |        |      |   |        |  |   |       
|----------------------------------------------------------- |  | --------------------- | ------ | ---- | - | ------ |  | - | ------
|                                                            |  | Year Ended January 31
|                                                            |  | 2009                  |        | 2008 |   | 2007  
|Basic earnings per share:                                   |  |                       |        |      |   |        |  |   |       
|Net income                                                  |  | $                     | 1,267  |      | $ | 60,147 |  | $ | 45,481
|                                                            |  |                       |        |      |   |        |  |   |       
|Weighted average shares of common stock outstanding         |  |                       | 10,794 |      |   | 11,841 |  |   | 12,505
|                                                            |  |                       |        |      |   |        |  |   |       
|                                                            |  | $                     | 0.12   |      | $ | 5.08   |  | $ | 3.64  
|Diluted earnings per share:                                 |  |                       |        |      |   |        |  |   |       
|Net income                                                  |  | $                     | 1,267  |      | $ | 60,147 |  | $ | 45,481
|                                                            |  |                       |        |      |   |        |  |   |       
|Weighted average shares of common stock outstanding         |  |                       | 10,794 |      |   | 11,841 |  |   | 12,505
|Dilutive effect of stock options                            |  |                       | 283    |      |   | 492    |  |   | 566   
|                                                            |  |                       |        |      |   |        |  |   |       
|Diluted weighted average shares of common stock outstanding |  |                       | 11,077 |      |   | 12,333 |  |   | 13,071
|                                                            |  |                       |        |      |   |        |  |   |       
|                                                            |  | $                     | 0.11   |      | $ | 4.88   |  | $ | 3.48  



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Earnings Per Share (Continued)



Basic earnings per share is based on the weighted average
number of common shares outstanding for the period. Diluted weighted average common shares includes the incremental shares that would be issued upon the assumed exercise of stock options and stock appreciation rights and the amount of unvested
restricted stock. Unexercised SARS totaling 104,000 and 66,000 awards were excluded from the calculations of diluted earnings per share, for fiscal 2009 and 2008 respectively, because they were antidilutive. Unvested restricted stock totaling 26,000
shares was excluded from the fiscal 2009 calculation of diluted earnings per share because it was antidilutive.

Note 15Accumulated Other
Comprehensive Income (Loss)



|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |         |  
|-------------------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | ----------------------------------- | - | ------ | ----- |  | - | ------- | -
|                                                                                 |  | Accumulated Other ComprehensiveIncome (Loss) |        
|                                                                                 |  | TranslationAdjustment                        |         |   | Minimum PensionLiability Adjustment |   |        | Total | 
|                                                                                 |  | (In thousands)                               |        
|Balance at January 31, 2006                                                      |  | $                                            | 10,667  |   |                                     | $ | (2,986 | )     |  | $ | 7,681   |  
|Translation adjustment                                                           |  |                                              | 4,008   |   |                                     |   |       |       |  |   | 4,008   |  
|Minimum pension/postretirement liability adjustment, net of tax effect of $360   |  |                                              |        |   |                                     |   | 605    |       |  |   | 605     |  
|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |         |  
|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |        |  
|Balance at January 31, 2007                                                      |  |                                              | 14,675  |   |                                     |   | (2,381 | )     |  |   | 12,294  |  
|Translation adjustment                                                           |  |                                              | 22,817  |   |                                     |   |       |       |  |   | 22,817  |  
|Minimum pension/postretirement liability adjustment, net of tax effect of ($304) |  |                                              |        |   |                                     |   | 562    |       |  |   | 562     |  
|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |         |  
|Balance at January 31, 2008                                                      |  |                                              | 37,492  |   |                                     |   | (1,819 | )     |  |   | 35,673  |  
|Translation adjustment                                                           |  |                                              | (28,550 | ) |                                     |   |        |       |  |   | (28,550 | )
|Minimum pension/postretirement liability adjustment, net of tax effect of ($319) |  |                                              |         |   |                                     |   | 1,144  |       |  |   | 1,144   |  
|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |         |  
|Balance at January 31, 2009                                                      |  | $                                            | 8,942   |   |                                     | $ | (675   | )     |  | $ | 8,267   |  
|                                                                                 |  |                                              |         |   |                                     |   |        |       |  |   |         |  

Note 16Fair Value of Financial Assets and Liabilities

The fair value of our financial instruments represents the amount at which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced sale or liquidation. The carrying amount of our cash and cash equivalents, trade receivables and payables and notes payable to banks approximates fair value due to the short maturity of these instruments. The carrying
value of long-term debt approximates fair market value due to the variable interest rate on the debt.

Note 17Derivative Instruments and
Hedging Activities

We have operations and sell products to dealers and original equipment manufacturers throughout the world. Our
activities expose us to a variety of market risks, including the effects of changes in foreign currency exchange rates. These financial exposures are monitored and managed within our foreign exchange management policy as approved by the Board of
Directors. Our policy prohibits any activity construed as speculating on the changes in the value of any foreign currency. Our risk-management program focuses on the unpredictability of financial markets and seeks to reduce the effects that the
volatility of these markets may have on our operating results.



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 17Derivative Instruments and Hedging Activities (Continued)



We maintain a foreign currency risk-management strategy that uses derivative instruments to protect our interests from unanticipated fluctuations in
earnings caused by volatility in foreign currency exchange rates. Various amounts of our payables, receivables and subsidiary royalties are denominated in foreign currencies, thereby creating exposures to changes in exchange rates.

We purchase foreign currency forward exchange contracts with contract terms lasting up to six months, but generally less than one month, to protect
against the adverse effects that exchange rate fluctuations may have on foreign currency denominated receivables and payables. We only purchase these contracts for actual currency exposures. These derivatives do not qualify for hedge accounting, in
accordance with SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities. The gains and losses on both the derivatives and the foreign currency denominated receivables and payables are recorded as transaction
adjustments in current earnings thereby minimizing the effect on current earnings of exchange-rate fluctuations.

By using derivative
financial instruments to hedge exposures to changes in exchange rates, we expose ourselves to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivatives contract. When the fair value of
a derivative contract is positive, the counterparty owes us, which creates repayment risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess repayment risk. We minimize the
credit or repayment risk in derivative instruments by entering into transactions with counterparties whose credit ratings are AA or higher, monitoring the amount of exposure to each counterparty and monitoring the financial condition of our
counterparties.

Market risk is the adverse effect on the value of a foreign exchange contract that results from a change in the underlying
exchange rates. The market risk associated with these foreign exchange risks is managed by only hedging actual exposures. Any change in value of the foreign exchange contract due to exchange rate change is offset by the change in value of the
underlying asset being hedged due to exchange rate change.

At January 31, 2009 and 2008, we had approximately $115.7 million and $71.4
million, respectively, nominal value of contracts in place to buy or sell foreign currency. The fair value of these contracts is recorded in the consolidated financial statements as a foreign currency gain or loss. The principal currencies hedged
are denominated in Canadian dollars, Euros, British pounds and Japanese yen.

Note 18Acquisitions

We completed the following acquisitions during the three years ended January 31, 2009:



| |  |  | During fiscal 2008, we purchased American Compaction Equipment, Inc., a manufacturer of construction attachments located in San Juan Capistrano, California. The
total purchase price was approximately $11.5 million, net of assumed liabilities.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During fiscal 2007, we purchased the assets of Pacific Services and Manufacturing, Inc., a manufacturer of construction attachments located in Woodinville,
Washington. The total purchase price was approximately $40.3 million, net of assumed liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 19Supplementary Quarterly Financial
Information (unaudited)



|                             |  |                                          |         |             |   |             |  |                |         |  |   |         |  
|---------------------------- |  | ---------------------------------------- | ------- | ----------- | - | ----------- |  | -------------- | ------- |  | - | ------- | -
|                             |  | 1st Quarter                              |         | 2nd Quarter |   | 3rd Quarter |  | 4th Quarter(1) |        
|                             |  | (In thousands, except per share amounts) |        
|Year ended January 31, 2009  |  |                                          |         |             |   |             |  |                |         |  |   |         |  
|Net sales                    |  | $                                        | 149,867 |             | $ | 150,103     |  | $              | 139,134 |  | $ | 95,068  |  
|Gross profit                 |  | $                                        | 42,348  |             | $ | 42,717      |  | $              | 40,537  |  | $ | 22,946  |  
|Operating income (loss)      |  | $                                        | 17,752  |             | $ | 18,514      |  | $              | 17,815  |  | $ | (42,604 | )
|Net income (loss)            |  | $                                        | 10,858  |             | $ | 10,495      |  | $              | 10,415  |  | $ | (30,501 | )
|Net income (loss) per share: |  |                                          |         |             |   |             |  |                |         |  |   |         |  
|Basic                        |  | $                                        | 1.01    |             | $ | 0.97        |  | $              | 0.96    |  | $ | (2.82   | )
|Diluted                      |  | $                                        | 0.98    |             | $ | 0.94        |  | $              | 0.94    |  | $ | (2.82   | )
|Year ended January 31, 2008  |  |                                          |         |             |   |             |  |                |         |  |   |         |  
|Net sales                    |  | $                                        | 135,500 |             | $ | 143,183     |  | $              | 143,143 |  | $ | 136,247 |  
|Gross profit                 |  | $                                        | 43,229  |             | $ | 45,286      |  | $              | 44,041  |  | $ | 38,618  |  
|Operating income             |  | $                                        | 37,311  |             | $ | 23,525      |  | $              | 20,627  |  | $ | 14,150  |  
|Net income                   |  | $                                        | 23,796  |             | $ | 15,144      |  | $              | 12,420  |  | $ | 8,787   |  
|Net income per share:        |  |                                          |         |             |   |             |  |                |         |  |   |         |  
|Basic                        |  | $                                        | 1.99    |             | $ | 1.27        |  | $              | 1.04    |  | $ | 0.76    |  
|Diluted                      |  | $                                        | 1.90    |             | $ | 1.21        |  | $              | 1.00    |  | $ | 0.74    |  



|(1) | Amounts include a $46,376 ($31,576 after tax) asset impairment charge during the fourth quarter ended January 31, 2009.
|--- | -----------------------------------------------------------------------------------------------------------------------



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Schedule II

Cascade Corporation

Valuation and Qualifying Accounts

(In thousands)



|                                           |  |                              |        |                             |   |            |  |   |                                     |   |  |                        |        |   |  |   |       
|------------------------------------------ |  | ---------------------------- | ------ | --------------------------- | - | ---------- |  | - | ----------------------------------- | - |  | ---------------------- | ------ | - |  | - | ------
|Column A                                   |  | Column B                     |        | Column C                    |   | Column D   |  |   | Column E                            |   |  | Column F              
|Description                                |  | Balance atBeginning ofPeriod |        | Charged toCosts andExpenses |   | Deductions |  |   | Foreign CurrencyImpact/Acquisitions |   |  | Balance atEnd ofPeriod
|Years ended January 31:                    |  |                              |        |                             |   |            |  |   |                                     |   |  |                        |        |   |  |   |       
|2009                                       |  |                              |        |                             |   |            |  |   |                                     |   |  |                        |        |   |  |   |       
|Allowance for doubtful accounts receivable |  | $                            | 1,623  |                             | $ | 422        |  | $ | (394                                | ) |  | $                      | (210   | ) |  | $ | 1,441 
|Valuation allowances-deferred tax assets   |  | $                            | 11,672 |                             | $ | 3,211      |  | $ | (593                                | ) |  | $                      | (1,846 | ) |  | $ | 12,444
|Obsolete inventory reserve                 |  | $                            | 1,775  |                             | $ | 634        |  | $ | (176                                | ) |  | $                      | (258   | ) |  | $ | 1,975 
|2008                                       |  |                              |        |                             |   |            |  |   |                                     |   |  |                        |        |   |  |   |       
|Allowance for doubtful accounts receivable |  | $                            | 1,515  |                             | $ | 45         |  | $ | (123                                | ) |  | $                      | 186    |   |  | $ | 1,623 
|Valuation allowances-deferred tax assets   |  | $                            | 8,752  |                             | $ | 1,798      |  | $ | (49                                 | ) |  | $                      | 1,171  |   |  | $ | 11,672
|Obsolete inventory reserve                 |  | $                            | 2,280  |                             | $ | 497        |  | $ | (1,182                              | ) |  | $                      | 180    |   |  | $ | 1,775 
|2007                                       |  |                              |        |                             |   |            |  |   |                                     |   |  |                        |        |   |  |   |       
|Allowance for doubtful accounts receivable |  | $                            | 1,415  |                             | $ | 254        |  | $ | (225                                | ) |  | $                      | 71     |   |  | $ | 1,515 
|Valuation allowances-deferred tax assets   |  | $                            | 9,603  |                             | $ | 653        |  | $ | (2,070                              | ) |  | $                      | 566    |   |  | $ | 8,752 
|Obsolete inventory reserve                 |  | $                            | 1,592  |                             | $ | 588        |  | $ | (329                                | ) |  | $                      | 429    |   |  | $ | 2,280 



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

None.



|Item 9A. | Controls and Procedures
|-------- | -----------------------

Evaluation of Disclosure Controls and
Procedures

Our management has evaluated, under the supervision and with the participation of our chief executive officer and chief
financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the Exchange Act). Based on
that evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be
disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure.

Managements Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Rule 13a-15(f) of the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over
financial reporting as of January 31, 2009. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal ControlIntegrated Framework. Based on
our evaluation, our management concluded that, as of January 31, 2009, our internal control over financial reporting was effective based on those criteria.

The effectiveness of our internal control over financial reporting as of January 31, 2009, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their
report, which is included herein.

Changes in Internal Control Over Financial Reporting

There has been no change in the internal control over financial reporting that occurred during the three months ended January 31, 2009 that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

CEO and CFO Certifications

The certifications of our Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act
have been filed as Exhibits 31.1 and 31.2 to this report. Additionally, on June 19, 2008 our Chief Executive Officer certified to the New York Stock Exchange that he was not aware of any violation by us of the New York Stock Exchanges
corporate governance listing standards.



|Item 9B. | Other Information
|-------- | -----------------

None.



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PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------

Information regarding our directors is set forth under the heading Proposal 1: Election of Directors in the Companys Proxy Statement for its 2009 Annual Meeting to be filed within 120 days after our fiscal year end of
January 31, 2009, (Proxy Statement) and is incorporated into this report by reference. Information regarding our executive officers is set forth in Part I of this report under Officers of the Registrant.

Audit Committee

We have a separately-designated
standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Mr. Duane C. McDougall (Chair), Dr. Nicholas R. Lardy, Mr. James S. Osterman,
Dr. Nancy A. Wilgenbusch, Peter D. Nickerson and Mr. Henry W. Wessinger II, each of whom is independent as independence for Audit Committee members is defined under New York Stock Exchange listing standards applicable to us.

Audit Committee Financial Expert

Our Board of
Directors has determined that Duane C. McDougall, Chair of the Audit Committee, is an audit committee financial expert as defined in Item 407(d)(5) of Regulation S-K of the Exchange Act and is independent as independence for Audit Committee
members is defined under New York Stock Exchange listing standards applicable to us.

Code of Ethics

We have adopted a code of ethics and business responsibilities (Code) for directors, officers (including the CEO, CFO, principal accounting
officer, and persons performing similar functions) and employees, which is Exhibit 14 of this report. A copy of the Code is available on our website at www.cascorp.com/investor. Shareholders may also request a free copy of the Code from:

Cascade Corporation

Attention: Secretary

Post Office Box 20187

Portland, Oregon 97294-0187

503-669-6300

We will post on our website any required amendments to or waivers granted under the Code pursuant to Securities and Exchange Commission or New York Stock
Exchange disclosure rules.



|Item 11. | Executive Compensation
|-------- | ----------------------

Information regarding
compensation of our named executive officers, directors and certain matters regarding the Compensation Committee of our Board of Directors is set forth under the headings Executive Compensation, Corporate Governance and Other Board
MattersDirector Compensation and Compensation Committee Interlocks and Insider Participation, in the Proxy Statement and is incorporated into this report by reference.



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stock Holder Matters
|-------- | -----------------------------------------------------------------------------------------------

Information concerning the security ownership of certain beneficial owners, directors, and executive officers of Cascade is set forth under the heading
Voting Securities-Stock Ownership Of Certain Beneficial Owners And Management in the Proxy Statement and is incorporated into this report by reference.

Information regarding our equity compensation plans is set forth under the heading Equity Compensation Plan Information in the Proxy Statement and is incorporated into this report by reference.



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|Item 13. | Certain Relationships and Related Transactions and Director Independence
|-------- | ------------------------------------------------------------------------

Information concerning certain relationships and related transactions is included under Certain Relationships and Related Transactions in the Proxy Statement and is incorporated into this report by
reference. Information concerning the independence of our directors is set forth under the heading Corporate Governance and Other Board Matters  Board Independence in the Proxy Statement and is incorporated into this report by
reference.



|Item 14. | Principal Accounting Fees and Services
|-------- | --------------------------------------

Information
concerning fees paid to our principal accountants is set forth under the heading Fees Paid to Independent Registered Public Accounting Firm in the Proxy Statement and is incorporated into this report by reference.



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PART IV



|Item 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------



|(a) | Index to Financial Statements
|--- | -----------------------------



|   |  |                                                                                                                 |  |   
|-- |  | --------------------------------------------------------------------------------------------------------------- |  | --
|1. |  | Consolidated Financial Statements                                                                               |  |   
|   |  | Report of Independent Registered Public Accounting Firm                                                         |  | 39
|   |  | Consolidated Financial Statements:                                                                              |  |   
|   |  | Statements of Income for each of the three years in the period ended January 31, 2009                           |  | 40
|   |  | Balance Sheets at January 31, 2009 and 2008                                                                     |  | 41
|   |  | Statements of Changes in Shareholders Equity for each of the three years in the period ended January 
31, 2009 |  | 42
|   |  | Statements of Cash Flows for each of the three years in the period ended January 31, 2009                       |  | 43
|   |  | Notes to Consolidated Financial Statements                                                                      |  | 44
|   |  |                                                                                                                
|2. |  | Financial Statement Schedule for each of the three years ended January 31, 2009, 2008 and 2007.                 |  |   
|   |  | Valuation and Qualifying Accounts                                                                               |  | 71

The individual financial statements of the registrant and its subsidiaries have been omitted since
Cascade is primarily an operating company and all subsidiaries included in the consolidated financial statements, in the aggregate, do not have minority equity interests and/or indebtedness to any person other than the registrant or its consolidated
subsidiaries in amounts which together exceed 5% of the total consolidated assets at January 31, 2009, except indebtedness incurred in the ordinary course of business which is not overdue and which matures within one year from the year of its
origination.



|3. | Exhibits
|-- | --------



|            |  |                                                                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                               
|3.1         |  | Restated Articles of Incorporation, filed as Exhibit 3.1 to Form 10-Q filed with the Commission on September 5, 2008.(1)                                                                                                                                  
|            | 
|3.2         |  | Bylaws, as amended April 6, 2007 filed as Exhibit 3.2 to Form 10-K filed with the Commission on April 16, 2007.(1)                                                                                                                                        
|            | 
|10.1        |  | Severance Agreement dated May 25, 2000, with Richard S. Anderson, filed as Exhibit 3 to Form 10-K filed with the Commission on May 1, 2001.(1)(2)                                                                                                         
|            | 
|10.2        |  | Severance Agreement dated May 25, 2000, with Robert C. Warren, Jr., filed as Exhibit 1 to Form 10-K filed with the Commission on May 1, 2001.(1)(2)                                                                                                       
|            | 
|10.3        |  | Agreement dated January 25, 2008, regarding retirement of Gregory S. Anderson filed as Exhibit 10.3 to Form 10-K filed with the Commission on April 8,
2008.(1)(2)                                                                                        
|            | 
|10.4        |  | 1999 Amendment and Restatement of the Cascade Corporation 1995 Senior Managers Incentive Stock Option Plan filed as Exhibit 4.3 to the Registration Statement on Form S-8
(Registration No. 333-103581) filed with the Commission on March 4, 2003.(1)(2)
|            | 
|10.5        |  | Form of Stock Option Agreement for 1999 Amendment and Restatement of the Cascade Corporation 1995 Senior Managers Incentive Stock Option Plan filed as Exhibit 10.5 to Form 10-K
filed with the Commission on April 18, 2005.(1)(2)                      
|            | 
|10.6        |  | Cascade Corporation Stock Appreciation Rights and Restricted Stock Plan, filed as Exhibit 10.1 to Form 10-Q filed with the Commission on September 10, 2007.(1)(2)                                                                                        
|            | 
|10.7        |  | Form of Stock Appreciation Rights Agreement for Cascade Corporation Stock Appreciation Rights Plan filed as Exhibit 10.7 to Form 10-K filed with the Commission on April 18, 2005.(1)(2)                                                                  



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|            |  |                                                                                                                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                             
|10.8        |  | Form of Restricted Stock Agreement (Employee) for Cascade Corporation Stock appreciation Rights and Restricted Stock Plan filed as Exhibit 10.2 to Form 10-Q filed with the Commission on
September 10, 2007.(1)(2)                                                     
|            | 
|10.9        |  | Form of Restricted Stock Agreement (Director) for Cascade Corporation Stock Appreciation Rights and Restricted Stock Plan filed as Exhibit 10.3 to Form 10-Q filed with the Commission on
September 10, 2007.(1)(2)                                                     
|            | 
|10.10       |  | Summary of Non-Employee Director and Named Executive Officer Compensation Arrangements.(2)                                                                                                                                                                              
|            | 
|10.11       |  | Loan Agreement dated February 28, 2003, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as Exhibit 10.1 to
Form 8-K filed with the Commission on December 18, 2006.(1)                      
|            | 
|10.12       |  | Amendment to Credit Agreement dated June 29, 2005, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.2 to Form 8-K filed with the Commission on December 18, 2006.(1)           
|            | 
|10.13       |  | Second Amendment to Credit Agreement dated February 24, 2006, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.3 to Form 8-K filed with the Commission on December 18, 2006.(1)
|            | 
|10.14       |  | Third Amendment to Loan Agreement dated December 12, 2006, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.4 to Form 8-K filed with the Commission on December 18, 2006.(1)   
|            | 
|10.15       |  | Fourth Amendment to Loan Agreement dated October 3, 2007 among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.16 to Form 10-K filed with the Commission on April 8, 2008.(1)       
|            | 
|10.16       |  | Fifth Amendment to Loan Agreement dated December 21, 2007 among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A. and Bank of America, N.A. as agent, filed as
Exhibit 10.17 to Form 10-K filed with the Commission on April 8, 2008.(1)       
|            | 
|14          |  | Code of Ethics and Business Responsibilities for Directors, Officers, and Employees, filed as Exhibit 14 to Form 10-K filed with the Commission on April 8, 2008.(1)                                                                                                    
|            | 
|21          |  | Subsidiaries of the registrant.                                                                                                                                                                                                                                         
|            | 
|23          |  | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.                                                                                                                                                                                   
|            | 
|31.1        |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                
|            | 
|31.2        |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                
|            | 
|32          |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                                                 



|(1) | Incorporated by reference.
|--- | --------------------------



|(2) | Indicates management contract or compensatory plan or arrangement.
|--- | ------------------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant, CASCADE CORPORATION has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.



CASCADE CORPORATIONBy:

/S/  JOSEPH G.
POINTERJoseph G. PointerChief Financial Officer


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



|                                                 |  |                                                                                   |  |                   
|------------------------------------------------ |  | --------------------------------------------------------------------------------- |  | ------------------
|                                                 |  |                                                                                  
|/S/  ROBERT C. WARREN,
JR. Robert C. Warren, Jr. |  | President and Chief Executive Officer, and Director (Principal Executive Officer) |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  JOSEPH G.
POINTER Joseph G. Pointer         |  | Chief Financial Officer (Principal Financial and Accounting Officer)              |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  JAMES S.
OSTERMAN James S. Osterman         |  | Director                                                                          |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  NICHOLAS R.
LARDY Nicholas R. Lardy         |  | Director                                                                          |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  DUANE C.
MCDOUGALL Duane C. McDougall       |  | Director                                                                          |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  PETER D.
NICKERSON Peter D. Nickerson       |  | Director                                                                          |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  HENRY W. WESSINGER
II Henry W. Wessinger II |  | Director                                                                          |  | April 6, 2009 Date
|                                                 |  |                                                                                  
|/S/  NANCY A.
WILGENBUSCH Nancy A. Wilgenbusch   |  | Director                                                                          |  | April 6, 2009 Date



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EXHIBIT INDEX



|3. | Exhibits
|-- | --------



|            |  |                                                                                                                                                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                             
|3.1         |  | Restated Articles of Incorporation, filed as Exhibit 3.1 to Form 10-Q filed with the Commission on September 5, 2008.(1)                                                                                                                                                
|            | 
|3.2         |  | Bylaws, as amended April 6, 2007 filed as Exhibit 3.2 to Form 10-K filed with the Commission on April 16, 2007.(1)                                                                                                                                                      
|            | 
|10.1        |  | Severance Agreement dated May 25, 2000, with Richard S. Anderson, filed as Exhibit 3 to Form 10-K filed with the Commission on May 1, 2001.(1)(2)                                                                                                                       
|            | 
|10.2        |  | Severance Agreement dated May 25, 2000, with Robert C. Warren, Jr., filed as Exhibit 1 to Form 10-K filed with the Commission on May 1, 2001.(1)(2)                                                                                                                     
|            | 
|10.3        |  | Agreement dated January 25, 2008, regarding retirement of Gregory S. Anderson filed as Exhibit 10.3 to Form 10-K filed with the Commission on April 8,
2008.(1)(2)                                                                                                      
|            | 
|10.4        |  | 1999 Amendment and Restatement of the Cascade Corporation 1995 Senior Managers Incentive Stock Option Plan filed as Exhibit 4.3 to the Registration Statement on Form S-8
(Registration No. 333-103581) filed with the Commission on March 4, 2003.(1)(2)              
|            | 
|10.5        |  | Form of Stock Option Agreement for 1999 Amendment and Restatement of the Cascade Corporation 1995 Senior Managers Incentive Stock Option Plan filed as Exhibit 10.5 to Form 10-K filed
with the Commission on April 18, 2005.(1)(2)                                    
|            | 
|10.6        |  | Cascade Corporation Stock Appreciation Rights and Restricted Stock Plan, filed as Exhibit 10.1 to Form 10-Q filed with the Commission on September 10, 2007.(1)(2)                                                                                                      
|            | 
|10.7        |  | Form of Stock Appreciation Rights Agreement for Cascade Corporation Stock Appreciation Rights Plan filed as Exhibit 10.7 to Form 10-K filed with the Commission on April 18, 2005.(1)(2)                                                                                
|            | 
|10.8        |  | Form of Restricted Stock Agreement (Employee) for Cascade Corporation Stock appreciation Rights and Restricted Stock Plan filed as Exhibit 10.2 to Form 10-Q filed with the Commission on
September 10, 2007.(1)(2)                                                     
|            | 
|10.9        |  | Form of Restricted Stock Agreement (Director) for Cascade Corporation Stock Appreciation Rights and Restricted Stock Plan filed as Exhibit 10.3 to Form 10-Q filed with the Commission on
September 10, 2007.(1)(2)                                                     
|            | 
|10.10       |  | Summary of Non-Employee Director and Named Executive Officer Compensation Arrangements.(2)                                                                                                                                                                              
|            | 
|10.11       |  | Loan Agreement dated February 28, 2003, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as Exhibit 10.1 to
Form 8-K filed with the Commission on December 18, 2006.(1)                      
|            | 
|10.12       |  | Amendment to Credit Agreement dated June 29, 2005, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as Exhibit
10.2 to Form 8-K filed with the Commission on December 18, 2006.(1)           
|            | 
|10.13       |  | Second Amendment to Credit Agreement dated February 24, 2006, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.3 to Form 8-K filed with the Commission on December 18, 2006.(1)
|            | 
|10.14       |  | Third Amendment to Loan Agreement dated December 12, 2006, among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.4 to Form 8-K filed with the Commission on December 18, 2006.(1)   



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|            |  |                                                                                                                                                                                                                                                                  
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                      
|10.15       |  | Fourth Amendment to Loan Agreement dated October 3, 2007 among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A., and Bank of America, N.A. as agent, filed as
Exhibit 10.16 to Form 10-K filed with the Commission on April 8, 2008.(1)
|            | 
|10.16       |  | Fifth Amendment to Loan Agreement dated December 21, 2007 among Cascade Corporation, Bank of America, N.A., Union Bank of California, N.A. and Bank of America, N.A. as agent, filed as
Exhibit 10.17 to Form 10-K filed with the Commission on April 8, 2008.(1)
|            | 
|14          |  | Code of Ethics and Business Responsibilities for Directors, Officers, and Employees, filed as Exhibit 14 to Form 10-K filed with the Commission on April 8, 2008.(1)                                                                                             
|            | 
|21          |  | Subsidiaries of the registrant.                                                                                                                                                                                                                                  
|            | 
|23          |  | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.                                                                                                                                                                            
|            | 
|31.1        |  | Certification of Chief Executive Officer                                                                                                                                                                                                                         
|            | 
|31.2        |  | Certification of Chief Financial Officer                                                                                                                                                                                                                         
|            | 
|32          |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                                                                          



|(1) | Incorporated by reference.
|--- | --------------------------



|(2) | Indicates management contract or compensatory plan or arrangement.
|--- | ------------------------------------------------------------------



79