UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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GRAPHIC

FORM 10-K

|(Mark One)                                                            |                                                                                         
|--------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                                     | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended January 31, 2008                           
|OR                                                                   
|o                                                                     | 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                                       

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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

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

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

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 ý    No o

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.    o

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

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

The aggregate market value of common stock held by non-affiliates of the registrant as of July 31, 2007 was $699,465,694, 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 17, 2008 was 10,822,064.

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, 2008, to be delivered
to shareholders in connection with the Annual Meeting of Shareholders to be held June 3, 2008 are incorporated by reference into Part III.



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TABLE OF CONTENTS

|PART I     |          | 4                         
|---------- | -------- | --------------------------
|           | Item 1.  |                           
|           |          | General                   
|           |          | Products                  
|           |          | Markets                   
|           |          | Competition               
|           |          | Customers                 
|           |          | Backlog                   
|           |          | Research and Development  
|           |          | Environmental Matters     
|           |          | Employees                 
|           |          | Construction Attachments  
|           |          | Foreign Operations        
|           |          | Available Information     
|           | Item 1A. |                           
|           | Item 1B. |                           
|           | Item 2.  |                           
|           | Item 3.  |                           
|           | Item 4.  |                           
|           |          | Officers of the Registrant
|PART II    |          | 14                        
|           | Item 5.  |                           
|           | Item 6.  |                           
|           | Item 7.  |                           
|           | Item 7A. |                           
|           | Item 8.  |                           
|           | Item 9.  |                           
|           | Item 9A. |                           
|           | Item 9B. |                           
|PART III   |          | 74                        
|           | Item 10. |                           
|           | Item 11. |                           
|           | Item 12. |                           
|           | Item 13. |                           
|           | Item 14. |                           
|PART IV    |          | 76                        
|           | Item 15. |                           
|SIGNATURES |          | 78                        

NOTE:
All references to fiscal years are defined as year ended January 31, 2008 (fiscal 2008), year ended January 31, 2007 (fiscal 2007) and year ended January 31,
2006 (fiscal 2006).

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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:



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 with 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 wheel loaders, tractor-loader-backhoes skid steer loaders
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 wheel 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.

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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.

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.

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. The majority 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.

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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.

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 January 31, 2008, we had approximately 2,400 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

Since December 2006, we have acquired two companies on the West coast of the United States that manufacture attachments for construction vehicles. 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 100 employees working to design,
manufacture and market these products.

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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).

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.comwhen 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 exclusive list, and additional risks not presently known to the Company or that the Company currently deems immaterial may also impair its 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. 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 is likely to result in a reduction in demand for our products and could negatively affect
our business.

Fluctuations in raw material costs and availability

Significant cost increases in raw materials and components or shortages in these items could adversely affect our operating results and financial condition.

To
manufacture our products we purchase a variety of raw materials and components. These consist principally of rolled bar, plate and extruded 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.

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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.

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. 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:



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 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:



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Original equipment manufacturers sourcing practices

We sell approximately 45% of our products directly to OEMs, who carry inventories of finished products as part of ongoing operations and adjust those inventories
based on their assessments of
future needs. Such adjustments can have an impact on our quarterly results. In addition, OEMs may, as they have in the past, attempt to alter the distribution channels of certain products by
acquiring all or part of their dealer network or by exerting influence over the sale of replacement parts and attachments through their distribution channels. Such efforts, if successful, could have a
negative impact on our financial results.

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.

Fluctuations
in the value of the U.S. dollar may adversely affect our results of 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. Volatility in
currency exchange rates may have a material effect on our financial condition or results of operations. 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 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.

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

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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 Executive Officer and Chief Financial Officer, who have each been with us for over 35 years. Our current Senior Vice
PresidentHuman Resources, Gregory Anderson, will be retiring in June 2008. The loss of the services of key management personnel or the failure to attract and develop additional personnel
as required could adversely effect our business, financial condition and results of operations.

Reliance on lift truck dealers

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. As a result, poor performance by retail lift truck dealers could adversely affect our business, financial condition,
cash flows and results of operations.

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.

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

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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, 2008, our projected benefit obligations under our defined benefit pension plans exceed the fair value of assets by $2.3 million. As of January 31,
2008 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                    |  | Approximate
Square
Footage |  | 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 
|Osaka, Japan                    |  | Sales/Distribution                  |  | 16,000                     |  | Leased
|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 are insured against product liability, personal injury and
property damage claims, which may occasionally arise.

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 of $16,000,000, net of

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expenses,
was recorded in our consolidated financial statements for the first quarter of fiscal 2008. This settlement concluded all litigation against our insurance companies regarding environmental
matters.

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

None.

Officers of the Registrant

Robert C. Warren, Jr.Chief Executive Officer and President(1)Mr. Warren,
59, 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.

Gregory S. AndersonSenior Vice PresidentHuman Resources(1)Mr. Anderson, 59, has
served in his current position since 2002. He joined Cascade in 1984, and has served as Vice PresidentHuman Resources since 1991. Mr. Anderson will be retiring from Cascade in June
2008.

Richard S. AndersonSenior Vice President and Chief Financial Officer(1)Mr. Anderson, 60, has
served as Chief Financial Officer since 2001. Mr. Anderson has been employed by Cascade since 1972 and held several positions including his appointments as Vice PresidentMaterial
Handling Product Group in 1996 and Senior Vice PresidentInternational in 1999.

Frank R. Altenhofen, Vice PresidentNorth America(1)Mr. Altenhofen, 46, 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. During 2001 to 2007, Mr. Altenhofen held
various management positions at a couple medical device companies. This included serving as President of an international medical device company from 2003 to 2007.

Herre Y. Hoekstra, Vice President and Managing Director, Europe(1)Mr. Hoekstra, 46, joined Cascade in 2005. Prior to
joining Cascade, Mr. Hoekstra held various management positions with Royal Ten Cate, REMU and Royal Dutch Shell, in The Netherlands.

Michael E. Kern, Vice PresidentConstruction Attachment Division(1)Mr. Kern, 61, has served as Vice
PresidentConstruction Attachment Division since November 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, 54, 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, 52, 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Finance(1)Mr. Pointer, 47, has served as Vice
PresidentFinance since 2000. Prior to joining Cascade in 2000, Mr. Pointer was a partner at PricewaterhouseCoopers LLP in Portland, Oregon.

John A. CushingTreasurerMr. Cushing, 47, 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.

13

---





PART II

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

As of March 17, 2008, there were 173 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, 2003, 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

GRAPHIC

---

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

14

---



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 312008

2007High

Low

High

LowFirst quarter

$
66.20

$
53.28

$
53.96

$
37.85Second quarter


89.87


60.02


42.17


35.20Third quarter


77.85


54.92


52.63


35.75Fourth quarter


64.87


40.06


55.54


47.15


Common Stock Repurchase

Our Board of Directors had previously authorized plans in September 2006 and 2007 to repurchase up to $130 million of our common stock. The table below
summarizes information about our purchases of our common shares during the three month period ended January 31, 2008 and the years ended January 31, 2008 and 2007.

|Period                         |                                     | Total Number of
Shares Purchased |         | Average
Price Paid
Per Share |       | Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs |           | Maximum Dollar
Value of Shares
that May Yet be
Purchased Under the
Plans or Programs(1)
|------------------------------ | ----------------------------------- | -------------------------------- | ------- | ---------------------------- | ----- | -------------------------------------------------------------------------------- | --------- | ---------------------------------------------------------------------------------------
|Year ended January 31, 2007    |                                     | 757,119                          |         | $                            | 51.27 |                                                                                  | 757,119   |                                                                                        
|                               |                                     |                                  |         |                              |       |                                                                                  |           |                                                                                        
|                               | Nine months ended October 31, 2007  |                                  | 691,116 |                              |       | 59.59                                                                            |           | 691,116                                                                                
|                               |                                     | November 1 - 30, 2007            |         | 280,800                      |       |                                                                                  | 59.28     |                                                                                        
|                               |                                     | December 1 - 31, 2007            |         | 139,300                      |       |                                                                                  | 53.62     |                                                                                        
|                               |                                     | January 1 - 31, 2008             |         | 548,400                      |       |                                                                                  | 45.54     |                                                                                        
|                               |                                     |                                  |         |                              |       |                                                                                  |           |                                                                                        
|                               | Three months ended January 31, 2008 |                                  | 968,500 |                              | $     | 50.69                                                                            |           | 968,500                                                                                
|                               |                                     |                                  |         |                              |       |                                                                                  |           |                                                                                        
|Year ended January 31, 2008    |                                     | 1,659,616                        |         | $                            | 54.39 |                                                                                  | 1,659,616 |                                                                                        
|                               |                                     |                                  |         |                              |       |                                                                                  |           |                                                                                        
|Total common stock repurchases |                                     | 2,416,735                        |         | $                            | 53.41 |                                                                                  | 2,416,735 |                                                                                        
|                               |                                     |                                  |         |                              |       |                                                                                  |           |                                                                                        

---

15

---



Common Stock Dividends

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

Year ended
January 312008

2007First quarter

$
0.16

$
0.15Second quarter


0.18


0.15Third quarter


0.18


0.15Fourth quarter


0.18


0.16Total

$
0.70

$
0.61


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 Mellon Shareholder Services, L.L.C., Shareholder Relations, P.O. Box 3315, South Hackensack, N.J., 07606,
(800) 522-6645.

Equity Compensation Plan Information

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

16

---



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 |        
|------------------------------------------- |  | --------------------- | -------
|
|
|Income statement data:                      |  |                       |        
|Net sales                                   |  | $                     | 558,073
|Operating income(1)                         |  | $                     | 95,613 
|Net income(2)                               |  | $                     | 60,147 
|Cash flow data:                             |  |                       |        
|Cash flows from operating activities        |  | $                     | 53,326 
|Cash flows from investing activities        |  | $                     | (31,627
|Cash flows from financing activities        |  | $                     | (33,432
|Stock information:                          |  |                       |        
|Basic earnings per share(2)                 |  | $                     | 5.08   
|Diluted earnings per share(2)               |  | $                     | 4.88   
|Book value per common share(3)              |  | $                     | 24.73  
|Dividends declared                          |  | $                     | 0.70   
|Balance sheet information:                  |  |                       |        
|Cash and marketable securities              |  | $                     | 21,223 
|Working capital(4)                          |  | $                     | 151,971
|Property, plant and equipment, net          |  | $                     | 98,350 
|Total assets                                |  | $                     | 462,500
|Total debt                                  |  | $                     | 110,716
|Shareholders' equity                        |  | $                     | 268,025
|Other:                                      |  |                       |        
|Capital expenditures                        |  | $                     | 22,808 
|Depreciation                                |  | $                     | 13,898 
|Amortization                                |  | $                     | 3,214  
|Share-based compensation expense(5)         |  | $                     | 4,451  
|Interest expense, net of interest income    |  | $                     | 3,315  
|Diluted weighted average shares outstanding |  |                       | 12,333 
|Number of employees                         |  |                       | 2,400  

---

17

---



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, 2008, and the
results of operations and cash flows for the fiscal years ended January 31, 2008, 2007 and 2006. 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

European Business

Europe's lift truck industry continued to be strong in fiscal 2008 with shipments increasing over 21% from the previous year. We have captured some of this growth
with a 15% increase in sales, excluding currency changes, and an increase in operating income. However, our profitability in Europe continues to fall short of our expectations. In particular, the
fourth quarter results in Europe were disappointing in that our improved results in the first part of the year proved not to be sustainable. This is due to several reasons, which include operational
issues at several European facilities and delays in fully executing our plan to import Chinese manufactured forks (discussed further in "China Expansion" below). As a result, we are currently
completing a fundamental review of our entire European business to identify specific areas of improvement, including purchasing improvements, product sourcing and streamlining of manufacturing and
administrative functions. This review also includes consideration of further rationalization of production capacity at our European facilities. As we have stated previously, improving our operational
performance and increasing our market share in Europe, the world's largest lift truck market, remains a key priority.

Material Cost Increases

Like many manufacturing companies around the world, we are feeling the pressures of increasing material costs. We have previously mentioned there has been some
degree of material cost increases ongoing in various parts of the world for the past few years. Recently this seems to be a more consistent trend throughout the world. We are generally able to recover
a portion of cost increases through higher sales prices to customers in certain markets in which we operate, but there are markets, such as Europe, where increased competition makes this more
challenging. This has required us to be even more diligent than we previously were in seeking out lower cost suppliers. We have also stepped
up our efforts to improve internal processes, both manufacturing and administrative, to create internal efficiencies, which we believe will ultimately result in lower costs.

China Expansion

Our work to expand operations in China continued in fiscal 2008. The objectives of this expansion were to keep pace with the rapidly expanding Chinese lift truck
market, expand our business in the

18

---



Asia
Pacific region and provide production capacity to begin exporting Chinese-made products to other parts of the world. The highlights of our expansion in fiscal 2008 included the
following:



Acquisition StrategyConstruction Business

We have completed two acquisitions in the construction attachment business in just over a year. During this time the U.S. construction industry has slowed
considerably. We have taken steps at the acquired operations to improve existing production processes to lower costs and create additional capacity when production volumes increase. We are still
investigating opportunities to expand this business as they arise. We are beginning to develop this business in China.

Global Product Sourcing

We are continuing to see the globalization of our business, which is affecting the dynamics and business model previously used by global lift truck manufacturers.
Whereas the previous practice was to source products locally or regionally, the current trend is to look more towards global sourcing. In addition, the lift truck manufacturers are attempting to alter
the distribution channels for certain products through changes in their dealer network or with influence over the sale of replacement parts and attachments through their distribution channels. We are
closely monitoring these efforts and assessing the effect on our current business.

COMPARISON OF FISCAL 2008 AND FISCAL 2007

Executive Summary

|                           |  | Year Ended January 31 |         |  |   |         | 
|-------------------------- |  | --------------------- | ------- |  | - | ------- | 
|
|
|
|Net sales                  |  | $                     | 558,073 |  | $ | 478,850 | 
|Operating income           |  | $                     | 95,613  |  | $ | 68,351  | 
|Net income                 |  | $                     | 60,147  |  | $ | 45,481  | 
|Diluted earnings per share |  | $                     | 4.88    |  | $ | 3.48    | 

The
following are financial highlights for fiscal 2008:



19

---





North America

|                                          |  | Year Ended January 31 |         |   |     |    |  
|----------------------------------------- |  | --------------------- | ------- | - | --- | -- | -
|
|
|
|Net sales                                 |  | $                     | 286,832 |   | 90  | %  | $
|Transfers between areas                   |  |                       | 33,118  |   | 10  | %  |  
|                                          |  |                       |         |   |     |    |  
|Net sales and transfers                   |  |                       | 319,950 |   | 100 | %  |  
|Cost of goods sold                        |  |                       | 210,118 |   | 66  | %  |  
|                                          |  |                       |         |   |     |    |  
|Gross profit                              |  |                       | 109,832 |   | 34  | %  |  
|Selling and administrative                |  |                       | 51,020  |   | 16  | %  |  
|Loss (gain) on disposition of assets, net |  |                       | (1,135  | ) | (1  | )% |  
|Amortization                              |  |                       | 2,482   |   | 1   | %  |  
|Insurance litigation recovery, net        |  |                       | (15,977 | ) | (5  | )% |  
|                                          |  |                       |         |   |     |    |  
|Operating income                          |  | $                     | 73,442  |   | 23  | %  | $
|                                          |  |                       |         |   |     |    |  

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



20

---







Europe

|                                   |  | Year Ended January 31 |         |  |     |   |  
|---------------------------------- |  | --------------------- | ------- |  | --- | - | -
|
|
|
|Net sales                          |  | $                     | 171,435 |  | 99  | % | $
|Transfers between areas            |  |                       | 1,497   |  | 1   | % |  
|                                   |  |                       |         |  |     |   |  
|Net sales and transfers            |  |                       | 172,932 |  | 100 | % |  
|Cost of goods sold                 |  |                       | 145,288 |  | 84  | % |  
|                                   |  |                       |         |  |     |   |  
|Gross profit                       |  |                       | 27,644  |  | 16  | % |  
|Selling and administrative         |  |                       | 26,201  |  | 15  | % |  
|Gain on disposition of assets, net |  |                       |        |  |    |   |  
|Amortization                       |  |                       | 732     |  | 1   | % |  
|                                   |  |                       |         |  |     |   |  
|Operating income                   |  | $                     | 711     |  |    |   | $
|                                   |  |                       |         |  |     |   |  

The
following are financial highlights for Europe for fiscal 2008:



Our
financial results in Europe have improved marginally over the prior year but still fell short of our expectations. A robust European lift truck market enabled us to post strong sales
growth over the prior year. However, we were unable to capture the benefits of the expanded sales volume at the operating income level. There are several ongoing initiatives in Europe to improve our
overall performance over the long-term. We have provided below an overview of these initiatives, our progress to date and additional changes planned in the upcoming year:



21

---





Asia Pacific

|                                   |  | Year Ended January 31 |        |   |     |   |  
|---------------------------------- |  | --------------------- | ------ | - | --- | - | -
|
|
|
|Net sales                          |  | $                     | 59,776 |   | 100 | % | $
|Transfers between areas            |  |                       | 179    |   |    |   |  
|                                   |  |                       |        |   |     |   |  
|Net sales and transfers            |  |                       | 59,955 |   | 100 | % |  
|Cost of goods sold                 |  |                       | 44,892 |   | 75  | % |  
|                                   |  |                       |        |   |     |   |  
|Gross profit                       |  |                       | 15,063 |   | 25  | % |  
|Selling and administrative         |  |                       | 8,297  |   | 14  | % |  
|Gain on disposition of assets, net |  |                       | (34    | ) |    |   |  
|Amortization                       |  |                       |       |   |    |   |  
|                                   |  |                       |        |   |     |   |  
|Operating income                   |  | $                     | 6,800  |   | 11  | % | $
|                                   |  |                       |        |   |     |   |  

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



China

|                                   |  | Year Ended January 31 |        |  |     |   |  
|---------------------------------- |  | --------------------- | ------ |  | --- | - | -
|
|
|
|Net sales                          |  | $                     | 40,030 |  | 70  | % | $
|Transfers between areas            |  |                       | 17,410 |  | 30  | % |  
|                                   |  |                       |        |  |     |   |  
|Net sales and transfers            |  |                       | 57,440 |  | 100 | % |  
|Cost of goods sold                 |  |                       | 38,805 |  | 68  | % |  
|                                   |  |                       |        |  |     |   |  
|Gross profit                       |  |                       | 18,635 |  | 32  | % |  
|Selling and administrative         |  |                       | 3,927  |  | 6   | % |  
|Loss on disposition of assets, net |  |                       | 48     |  |    |   |  
|Amortization                       |  |                       |       |  |    |   |  
|                                   |  |                       |        |  |     |   |  
|Operating income                   |  | $                     | 14,660 |  | 26  | % | $
|                                   |  |                       |        |  |     |   |  

22

---



The
following are financial highlights for China for fiscal 2008:



Non-Operating Items

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



Lift Truck Market Outlook

Based on our review of industry statistics and data we believe the general lift truck market outlook for fiscal 2009 is as follows:



Additional
information on lift truck industry trends can be found atwww.cascorp.com/investor/industrytrends.

23

---



Fourth Quarter Results (2008/2007)

|                                    |  | Three Months Ended January 31 |         |   |     |   |  
|----------------------------------- |  | ----------------------------- | ------- | - | --- | - | -
|
|
|
|Net sales                           |  | $                             | 136,247 |   | 100 | % | $
|Cost of goods sold                  |  |                               | 97,629  |   | 72  | % |  
|                                    |  |                               |         |   |     |   |  
|Gross profit                        |  |                               | 38,618  |   | 28  | % |  
|Selling and administrative expenses |  |                               | 23,603  |   | 17  | % |  
|Loss on disposition of assets       |  |                               | 57      |   |    |   |  
|Amortization                        |  |                               | 808     |   | 1   | % |  
|                                    |  |                               |         |   |     |   |  
|Operating income                    |  |                               | 14,150  |   | 10  | % |  
|Interest expense, net               |  |                               | 988     |   | 1   | % |  
|Other expense (income), net         |  |                               | 412     |   |    |   |  
|                                    |  |                               |         |   |     |   |  
|Income before taxes                 |  |                               | 12,750  |   | 9   | % |  
|Provision for taxes                 |  |                               | 3,963   |   | 3   | % |  
|                                    |  |                               |         |   |     |   |  
|Net income                          |  | $                             | 8,787   |   | 6   | % | $
|                                    |  |                               |         |   |     |   |  
|Diluted earnings per share          |  | $                             | 0.74    |   |     |   | $
|                                    |  |                               |         |   |     |   |  
|Operating income (loss) by region:  |  |                               |         |   |     |   |  
|North America                       |  | $                             | 10,277  |   |     |   | $
|Europe                              |  |                               | (1,974  | ) |     |   |  
|Asia Pacific                        |  |                               | 1,752   |   |     |   |  
|China                               |  |                               | 4,095   |   |     |   |  
|                                    |  |                               |         |   |     |   |  
|                                    |  | $                             | 14,150  |   |     |   | $
|                                    |  |                               |         |   |     |   |  

The
following are financial highlights from the fourth quarter of fiscal 2008:



24

---





COMPARISON OF FISCAL 2007 AND FISCAL 2006

Executive Summary

|                           |  | Year Ended January 31 |         |  |   |         | 
|-------------------------- |  | --------------------- | ------- |  | - | ------- | 
|
|
|
|Net sales                  |  | $                     | 478,850 |  | $ | 450,503 | 
|Operating income           |  | $                     | 68,351  |  | $ | 63,894  | 
|Net income                 |  | $                     | 45,481  |  | $ | 42,051  | 
|Diluted earnings per share |  | $                     | 3.48    |  | $ | 3.27    | 

During
fiscal 2007 we posted increased levels of consolidated net sales, operating income and net income. This reflected the strength of lift truck markets throughout the world, where
shipments were up 12%. Financial results in both North America and China were very strong. Asia Pacific's operating income fell short of the prior year. Europe had record net sales but incurred an
operating loss.

North America

|                                   |  | Year Ended January 31 |         |  |     |   |  
|---------------------------------- |  | --------------------- | ------- |  | --- | - | -
|
|
|
|Net sales                          |  | $                     | 263,312 |  | 91  | % | $
|Transfers between areas            |  |                       | 25,367  |  | 9   | % |  
|                                   |  |                       |         |  |     |   |  
|Net sales and transfers            |  |                       | 288,679 |  | 100 | % |  
|Cost of goods sold                 |  |                       | 185,869 |  | 64  | % |  
|                                   |  |                       |         |  |     |   |  
|Gross profit                       |  |                       | 102,810 |  | 36  | % |  
|Selling and administrative         |  |                       | 46,750  |  | 16  | % |  
|Loss on disposition of assets, net |  |                       | 16      |  |    |   |  
|Amortization                       |  |                       | 598     |  | 1   | % |  
|                                   |  |                       |         |  |     |   |  
|Operating income                   |  | $                     | 55,446  |  | 19  | % | $
|                                   |  |                       |         |  |     |   |  

The
following are financial highlights for North America in fiscal 2007:



25

---





Europe

|                                          |  | Year Ended January 31 |         |   |     |    |  
|----------------------------------------- |  | --------------------- | ------- | - | --- | -- | -
|
|
|
|Net sales                                 |  | $                     | 137,755 |   | 99  | %  | $
|Transfers between areas                   |  |                       | 1,468   |   | 1   | %  |  
|                                          |  |                       |         |   |     |    |  
|Net sales and transfers                   |  |                       | 139,223 |   | 100 | %  |  
|Cost of goods sold                        |  |                       | 116,582 |   | 84  | %  |  
|                                          |  |                       |         |   |     |    |  
|Gross profit                              |  |                       | 22,641  |   | 16  | %  |  
|Selling and administrative                |  |                       | 22,921  |   | 16  | %  |  
|Loss (gain) on disposition of assets, net |  |                       | (588    | ) | (1  | )% |  
|Amortization                              |  |                       | 851     |   | 1   | %  |  
|                                          |  |                       |         |   |     |    |  
|Operating income                          |  | $                     | (543    | ) |    |    | $
|                                          |  |                       |         |   |     |    |  

The
following are financial highlights for Europe in fiscal 2007:



26

---





Asia Pacific

|                                   |  | Year Ended January 31 |        |   |     |   |  
|---------------------------------- |  | --------------------- | ------ | - | --- | - | -
|
|
|
|Net sales                          |  | $                     | 48,256 |   | 100 | % | $
|Transfers between areas            |  |                       | 220    |   |    |   |  
|                                   |  |                       |        |   |     |   |  
|Net sales and transfers            |  |                       | 48,476 |   | 100 | % |  
|Cost of goods sold                 |  |                       | 36,383 |   | 75  | % |  
|                                   |  |                       |        |   |     |   |  
|Gross profit                       |  |                       | 12,093 |   | 25  | % |  
|Selling and administrative         |  |                       | 7,996  |   | 17  | % |  
|Gain on disposition of assets, net |  |                       | (17    | ) |    |   |  
|Amortization                       |  |                       | 19     |   |    |   |  
|                                   |  |                       |        |   |     |   |  
|Operating income                   |  | $                     | 4,095  |   | 8   | % | $
|                                   |  |                       |        |   |     |   |  

The
following are financial highlights for Asia Pacific in fiscal 2007:



China

|                                   |  | Year Ended January 31 |        |  |     |   |  
|---------------------------------- |  | --------------------- | ------ |  | --- | - | -
|
|
|
|Net sales                          |  | $                     | 29,527 |  | 79  | % | $
|Transfers between areas            |  |                       | 7,853  |  | 21  | % |  
|                                   |  |                       |        |  |     |   |  
|Net sales and transfers            |  |                       | 37,380 |  | 100 | % |  
|Cost of goods sold                 |  |                       | 24,944 |  | 67  | % |  
|                                   |  |                       |        |  |     |   |  
|Gross profit                       |  |                       | 12,436 |  | 33  | % |  
|Selling and administrative         |  |                       | 3,042  |  | 8   | % |  
|Loss on disposition of assets, net |  |                       | 37     |  |    |   |  
|Amortization                       |  |                       | 4      |  |    |   |  
|                                   |  |                       |        |  |     |   |  
|Operating income                   |  | $                     | 9,353  |  | 25  | % | $
|                                   |  |                       |        |  |     |   |  

The
following are financial highlights for China in fiscal 2007:



27

---





Non-Operating Items

Our interest expense in fiscal 2007 decreased 16% in comparison with fiscal 2006. The reduction reflected our scheduled paydown of long-term debt in
November 2006.

Consolidated
interest income increased $915,000 through increased investing activity and higher interest rates in fiscal 2007.

Our
effective tax rate for fiscal 2007 increased to 34% in comparison to 32% in fiscal 2006. This increase was due to the reduced tax benefits from international financing and the
discontinued special deduction for U.S. export sales, combined with the utilization of previously recorded foreign tax credits.

CASH FLOWS

The statements of cash flows reflect the changes in cash and cash equivalents for the three years ended January 31, 2008 by classifying transactions into
three major categories of activities: operating, investing and financing.

Our
overall balance of cash and cash equivalents has decreased from over $36 million at January 31, 2007 and 2006 to $21 million at January 31, 2008. This
decrease and a corresponding increase in our long-term borrowings are primarily the result of our share repurchase program, acquisitions, working capital requirements and our capital
expansion plan in China. In the future we would expect our balance of cash and cash equivalents for ongoing operations to remain at approximately the $20 million level. Legal restrictions in
certain jurisdictions limit our ability to repatriate cash to the United States. Certain transactions could result in negative tax consequences.

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 depreciation, amortization and share-based compensation and changes in working capital. The following are operating activity highlights:



Investing

During the three years ended January 31, 2008, the major investing activities were capital expenditures, business acquisitions and the sale and purchase of
marketable securities.

28

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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 312008

2007

2006North America

$
7,986

$
6,174

$
5,923Europe


4,439


2,469


3,189Asia Pacific


5,302


481


336China


5,081


8,954


1,132$
22,808

$
18,078

$
10,580


The
following are capital expenditures highlights during the three years ended January 31, 2008:



We
completed the following acquisitions during the three years ended January 31, 2008:



We
held marketable securities of $23 million at January 31, 2006. We held no marketable securities at January 31, 2008 and 2007. There were no realized or unrealized
gains or losses related to our marketable securities.

Financing

The following are major financing activities during the three years ended January 31, 2008:



29

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FINANCIAL CONDITION AND LIQUIDITY

Working capital, defined as current assets less current liabilities at January 31, 2008 was $152.0 million as compared to $113.1 million of
working capital at January 31, 2007. Our current ratio, defined as current assets divided by current liabilities, at January 31, 2008 was 3.4 to 1 in comparison to 2.6 to 1 at
January 31, 2007. Increases in accounts receivable and inventories during fiscal 2008 were the primary reasons for the changes in our working capital and the current ratio.

Total
outstanding debt, including notes payable to banks, at January 31, 2008 was $110.7 million in comparison with $51.1 million at January 31, 2007. The
debt increase is a result of funding various initiatives including our common stock repurchase and acquisition of American Compaction Equipment, Inc. Our debt agreements contain covenants
relating to net worth and leverage ratios. We are in compliance with debt covenants at January 31, 2008. Borrowing arrangements currently in place with commercial banks provide available lines
of credit totaling $150 million. As of January 31, 2008, we had outstanding borrowings of $104.0 million, with an additional $3.6 million committed through the issuance of
letters of credit. Average interest rates on notes payable to banks were 4.3% at January 31, 2008 and 4.9% at January 31, 2007.

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 retirement requirements for fiscal 2009.

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 for fiscal 2008:



Postretirement Health Care Plan

We maintain a postretirement health care benefit plan in the United States consisting of health care coverage for approximately 170 eligible retirees and
qualifying dependents. Another 105 current employees, all over 53 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 for fiscal 2008:



30

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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 2013. 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 during fiscal 2008:



Contractual Obligations and Commitments

The following summarizes our contractual obligations and commitments as of January 31, 2008:

|                                       |  | Payment due by fiscal year
|-------------------------------------- |  | --------------------------
|
|
|Notes payable to banks                 |  | $                         
|Long-term debt                         |  |                           
|Estimated interest payments(1)         |  |                           
|Operating leases                       |  |                           
|Defined benefit pension obligations(2) |  |                           
|Postretirement benefit obligation(3)   |  |                           
|                                       |  |                           
|Total                                  |  | $                         
|                                       |  |                           

---

31

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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 Goodwill

We review goodwill for impairment 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 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 our 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 our existing debt and equity capital structure. 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.

32

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Our
goodwill impairment test for Europe assumes future operating results will reflect the benefits of our current efforts to improve our financial performance. If we do not realize these
improvements it could result in an impairment of our goodwill in Europe in the future.

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, 2008 liability to
5.8% from 5.2% at January 31, 2007 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.

Our
discount rate, used to determine the liability for our postretirement plan, increased to 6.25% at January 31, 2008 from the discount rate of 5.75% at January 31, 2007.
We determine our discount rate using a "yield curve expected benefit payment" methodology. This methodology uses individual

33

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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 9% and future increases will decline by 1% per year until 4.5% is reached in 2017. This assumption reflects a change from the prior
year in which future costs were estimated to increase by 10% and decline to 4.5% in 2013. The following presents the sensitivity of the key postretirement plan assumptions (in thousands):

IncreaseThe following presents the sensitivity of a 1% decrease in the discount rate:Effect on net periodic benefit cost

$
142Effect on postretirement benefit obligation

$
838The following presents the sensitivity of a 1% increase in the health care cost trend:Effect on net periodic benefit cost

$
223Effect on postretirement benefit obligation

$
850


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 headquarter 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. See Notes 2 and 13 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.

34

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OFF BALANCE SHEET ARRANGEMENTS

At January 31, 2008 and 2007, 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 FASB issued 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 will apply this new accounting standard to all other fair value measurements effective February 1, 2008. We are currently
evaluating the impact of the adoption of this standard on our financial statements.

SFAS 158In September 2006, the FASB issued SFAS No. 158 (SFAS 158), "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and 132(R)." This statement requires balance sheet recognition of the
overfunded or underfunded status of pension and postretirement benefit plans. Under SFAS 158, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or
obligations that have not been recognized under previous accounting standards must be recognized in other comprehensive income, net of tax effects, until they are amortized as a component of net
periodic benefit cost. In addition, the measurement date, the date at which plan assets and the benefit obligation are measured, is required to be the company's fiscal year end. Presently, we use a
December 31 measurement date for the postretirement benefit plan, which will change to coincide with our January 31 fiscal year-end date. As required by SFAS 158, we
adopted the balance sheet recognition provision as of January 31, 2007. The measurement date provision is effective for the fiscal year beginning February 1, 2008. We are currently
evaluating the impact of the adoption of the measurement date provision 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 is required for our financial statements beginning February 1, 2008. We do not expect the adoption of
SFAS 159 to 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. We are currently
evaluating the impact of the adoption of these standards on our financial statements.

35

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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 2008 net sales of a 10% change in the U.S. dollar against foreign currencies which impact our operations (in
millions):

Euro

$
13.2Chinese yuan


4.0British pound


3.4Canadian dollar


2.6Japanese yen


2.4Other currencies (representing 7% of consolidated net sales)


4.1


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 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 18 to the Consolidated Financial Statements (Item 8).

A
majority of our products are manufactured using steel as a primary raw material and steel based components as purchased parts. As such, our cost of goods sold is sensitive to
fluctuations in steel prices, either directly through the purchase of steel as raw material or indirectly through the purchase of steel based components.

Presuming
that the full impact of commodity steel price increases is reflected in all steel and steel based component purchases, we estimate our gross profit percentage would decrease by
approximately 0.3% for each 1.0% increase in commodity steel prices. Based on our statement of income for the year ended January 31, 2008, a 1.0% increase in commodity steel prices would have
decreased consolidated gross profit by approximately $1.5 million.

During
fiscal 2008, we continued to experience some increases in prices for steel and steel components, which comprise 35-40% 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 the full benefits of these mitigating measures. In Europe the measures have not been as successful, resulting in some erosion of gross
profit for certain products. During fiscal 2009 we are expecting some additional material price increases and will continue to implement mitigating measures where needed.

36

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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, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended January 31, 2008
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, 2008, based on criteria established inInternal
ControlIntegrated Frameworkissued 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 share-based compensation in fiscal 2006 and 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.

37

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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 4, 2008

38

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Cascade Corporation        Consolidated Statements of Income

|                                            |  | Year Ended January 31 |        
|------------------------------------------- |  | --------------------- | -------
|
|
|Net sales                                   |  | $                     | 558,073
|Cost of goods sold                          |  |                       | 386,899
|                                            |  |                       |        
|Gross profit                                |  |                       | 171,174
|Selling and administrative expenses         |  |                       | 89,445 
|Loss (gain) on disposition of assets, net   |  |                       | (1,121 
|Amortization                                |  |                       | 3,214  
|Insurance litigation recovery, net          |  |                       | (15,977
|                                            |  |                       |        
|Operating income                            |  |                       | 95,613 
|Interest expense                            |  |                       | 4,094  
|Interest income                             |  |                       | (779   
|Other (income) expense, net                 |  |                       | 1,460  
|                                            |  |                       |        
|Income before provision for income taxes    |  |                       | 90,838 
|Provision for income taxes                  |  |                       | 30,691 
|                                            |  |                       |        
|Net income                                  |  | $                     | 60,147 
|                                            |  |                       |        
|Basic earnings per share                    |  | $                     | 5.08   
|Diluted earnings per share                  |  | $                     | 4.88   
|Basic weighted average shares outstanding   |  |                       | 11,841 
|Diluted weighted average shares outstanding |  |                       | 12,333 

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

39

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Cascade Corporation        Consolidated Balance Sheets

|                                        |                                                                                                         | As of January 31                          
|--------------------------------------- | ------------------------------------------------------------------------------------------------------- | ------------------------------------------
|
|
|ASSETS                                  |                                                                                                         |                                           
|Current assets:                         |                                                                                                         |                                           
|                                        | Cash and cash equivalents                                                                               |                                           
|                                        | Accounts receivable, less allowance for doubtful accounts of $1,623 and $1,515                          |                                           
|                                        | Inventories                                                                                             |                                           
|                                        | Deferred income taxes                                                                                   |                                           
|                                        | Prepaid expenses and other                                                                              |                                           
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total current assets                      
|Property, plant and equipment, net      |                                                                                                         |                                           
|Goodwill                                |                                                                                                         |                                           
|Deferred income taxes                   |                                                                                                         |                                           
|Intangible assets, net                  |                                                                                                         |                                           
|Other assets                            |                                                                                                         |                                           
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total assets                              
|                                        |                                                                                                         |                                           
|LIABILITIES AND SHAREHOLDERS' EQUITY    |                                                                                                         |                                           
|Current liabilities:                    |                                                                                                         |                                           
|                                        | Notes payable to banks                                                                                  |                                           
|                                        | Current portion of long-term debt                                                                       |                                           
|                                        | Accounts payable                                                                                        |                                           
|                                        | Accrued payroll and payroll taxes                                                                       |                                           
|                                        | Other accrued expenses                                                                                  |                                           
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total current liabilities                 
|Long-term debt, net of current portion  |                                                                                                         |                                           
|Accrued environmental expenses          |                                                                                                         |                                           
|Deferred income taxes                   |                                                                                                         |                                           
|Employee benefit obligations            |                                                                                                         |                                           
|Other liabilities                       |                                                                                                         |                                           
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total liabilities                         
|                                        |                                                                                                         |                                           
|Commitments and contingencies (Note 11) |                                                                                                         |                                           
|Shareholders' equity:                   |                                                                                                         |                                           
|                                        | Common stock, $.50 par value, 20,000 authorized shares; 10,840 and 12,070 shares issued and outstanding |                                           
|                                        | Retained earnings                                                                                       |                                           
|                                        | Accumulated other comprehensive income                                                                  |                                           
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total shareholders' equity                
|                                        |                                                                                                         |                                           
|                                        |                                                                                                         | Total liabilities and shareholders' equity
|                                        |                                                                                                         |                                           

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

40

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Cascade Corporation        Consolidated Statements of Changes in Shareholders' Equity        (In thousands, except per share amounts)

|                                                                                 |  | Common Stock |   |   |       |   |   |         |   | Accumulated
Other
Comprehensive
Income (Loss) |        |   |  
|-------------------------------------------------------------------------------- |  | ------------ | - | - | ----- | - | - | ------- | - | --------------------------------------------- | ------ | - | -
|
|
|Balance at January 31, 2005                                                      |  | 12,224       |   | $ | 6,112 |   | $ | 20,004  |   | $                                             | (4,506 | ) | $
|Net income                                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Dividends ($.54 per share)                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Common stock issued                                                              |  | 312          |   |   | 156   |   |   | 2,631   |   |                                               |       |   |  
|Tax benefit from exercise of stock options                                       |  |             |   |   |      |   |   | 1,183   |   |                                               |       |   |  
|Deferred compensation from stock appreciation rights                             |  |             |   |   |      |   |   | (4,734  | ) |                                               | 4,734  |   |  
|Share-based compensation                                                         |  |             |   |   |      |   |   | 2,506   |   |                                               | (228   | ) |  
|Translation adjustment                                                           |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Minimum pension liability adjustment, net of tax effect of $393                  |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  
|Balance at January 31, 2006                                                      |  | 12,536       |   |   | 6,268 |   |   | 21,590  |   |                                               |       |   |  
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  
|Net income                                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Dividends ($.61 per share)                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Common stock issued                                                              |  | 291          |   |   | 145   |   |   | 3,296   |   |                                               |       |   |  
|Tax benefit from exercise of stock options                                       |  |             |   |   |      |   |   | 1,083   |   |                                               |       |   |  
|Common stock repurchase                                                          |  | (757         | ) |   | (378  | ) |   | (30,002 | ) |                                               |       |   |  
|Share-based compensation                                                         |  |             |   |   |      |   |   | 4,033   |   |                                               |       |   |  
|Translation adjustment                                                           |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Minimum pension/postretirement liability adjustment, net of tax effect of $360   |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  
|Balance at January 31, 2007                                                      |  | 12,070       |   |   | 6,035 |   |   |        |   |                                               |       |   |  
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  
|Net income                                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Dividends ($.70 per share)                                                       |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Common stock issued                                                              |  | 430          |   |   | 215   |   |   | 3,628   |   |                                               |       |   |  
|Tax benefit from exercise of stock options                                       |  |             |   |   |      |   |   | 3,084   |   |                                               |       |   |  
|Common stock repurchase                                                          |  | (1,660       | ) |   | (830  | ) |   | (11,163 | ) |                                               |       |   |  
|Share-based compensation                                                         |  |             |   |   |      |   |   | 4,451   |   |                                               |       |   |  
|Translation adjustment                                                           |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|Minimum pension/postretirement liability adjustment, net of tax effect of ($304) |  |             |   |   |      |   |   |        |   |                                               |       |   |  
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  
|Balance at January 31, 2008                                                      |  | 10,840       |   | $ | 5,420 |   | $ |        |   | $                                             |       |   | $
|                                                                                 |  |              |   |   |       |   |   |         |   |                                               |        |   |  

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

41

---



Cascade Corporation        Consolidated Statements of Cash Flows

|                                                                            |                                                                                   | Year Ended January 31                     |        
|--------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------------------------- | -------
|
|
|Cash flows from operating activities:                                       |                                                                                   |                                           |        
|                                                                            | Net income                                                                        |                                           | $      
|                                                                            | Adjustments to reconcile net income to net cash provided by operating activities: |                                           |        
|                                                                            |                                                                                   | Depreciation                              |        
|                                                                            |                                                                                   | Amortization                              |        
|                                                                            |                                                                                   | Share-based compensation                  |        
|                                                                            |                                                                                   | Deferred income taxes                     |        
|                                                                            |                                                                                   | Loss (gain) on disposition of assets      |        
|Changes in operating assets and liabilities, net of effects of acquisitions |                                                                                   |                                           |        
|                                                                            | Accounts receivable                                                               |                                           |        
|                                                                            | Inventories                                                                       |                                           |        
|                                                                            | Prepaid expenses and other                                                        |                                           |        
|                                                                            | Accounts payable and accrued expenses                                             |                                           |        
|                                                                            | Current income tax payable and receivable                                         |                                           |        
|                                                                            | Other assets and liabilities                                                      |                                           |        
|                                                                            |                                                                                   |                                           |        
|                                                                            |                                                                                   | Net cash provided by operating activities |        
|                                                                            |                                                                                   |                                           |        
|Cash flows from investing activities:                                       |                                                                                   |                                           |        
|                                                                            | Capital expenditures                                                              |                                           |        
|                                                                            | Business acquisitions                                                             |                                           |        
|                                                                            | Proceeds from sale of assets                                                      |                                           |        
|                                                                            | Sale of marketable securities                                                     |                                           |        
|                                                                            | Purchase of marketable securities                                                 |                                           |        
|                                                                            |                                                                                   |                                           |        
|                                                                            |                                                                                   | Net cash used in investing activities     |        
|                                                                            |                                                                                   |                                           |        
|Cash flows from financing activities:                                       |                                                                                   |                                           |        
|                                                                            | Payments on long-term debt and capital leases                                     |                                           |        
|                                                                            | Proceeds from long-term debt                                                      |                                           |        
|                                                                            | Notes payable to banks, net                                                       |                                           |        
|                                                                            | Cash dividends paid                                                               |                                           |        
|                                                                            | Common stock repurchased                                                          |                                           |        
|                                                                            | Common stock issued under share-based compensation plans                          |                                           |        
|                                                                            | Excess tax benefit from exercise of share-based compensation awards               |                                           |        
|                                                                            |                                                                                   |                                           |        
|                                                                            |                                                                                   | Net cash used in financing activities     |        
|                                                                            |                                                                                   |                                           |        
|Effect of exchange rate changes                                             |                                                                                   |                                           | (3,637 
|                                                                            |                                                                                   |                                           |        
|Change in cash and cash equivalents                                         |                                                                                   |                                           | (15,370
|Cash and cash equivalents at beginning of year                              |                                                                                   |                                           | 36,593 
|                                                                            |                                                                                   |                                           |        
|Cash and cash equivalents at end of period                                  |                                                                                   | $                                         | 21,223 
|                                                                            |                                                                                   |                                           |        
|Supplemental disclosure of noncash information:                             |                                                                                   |                                           |        
|                                                                            | See Note 12 to Consolidated Financial Statements                                  |                                           |        

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

42

---





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 2,400 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

43

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

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.

Goodwill

Goodwill represents the excess of the cost of acquired businesses over the fair value of the net identifiable assets acquired. We perform an annual review for
impairment for North America, Europe, Australia and our construction attachment business in North America. The tests are performed by determining the fair values using a discounted cash flow model and
comparing those fair values to the carrying values, including goodwill. The factors considered in performing this assessment include current and projected future operating results and changes in the
intended uses of the assets, as well as the effects of obsolescence, demand, competition, and other industry and economic trends. We have completed our annual review for impairment and determined
there has been no impairment of goodwill.

Impairment of Long-Lived Assets

Long-lived assets, primarily property, plant and equipment, are reviewed for impairment 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. Measurement of an impairment loss for long-lived assets we expect to hold and use is based on the fair value of the asset.

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.

During
the third quarter of fiscal 2007, we initiated a program to repurchase common stock. As of January 31, 2008 we had repurchased 2,417,000 shares for $129.1 million.
The repurchase of shares of common stock is recorded as a reduction in additional paid-in capital until the account balance is zero, then future repurchases are recorded as a reduction in
retained earnings.

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.

44

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

Share-Based Compensation

In the second quarter of fiscal 2006, we adopted SFAS No. 123 (revised 2004), "Share-Based Payment" (123R). This standard is a revision of SFAS 123,
"Accounting for Stock-Based Compensation" and supersedes APB 25 and FIN 28. SFAS 123R addresses the accounting for share-based compensation in which we receive employee services
in exchange for our equity instruments. Under SFAS 123R, we recognized compensation cost for share-based compensation issued to or purchased by employees, net of estimated forfeitures, under
share-based compensation plans using a fair value method. We adopted SFAS 123R using the modified prospective method as of May 1, 2005. Accordingly, no prior periods were restated. Under
this method, we record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remained outstanding as of the beginning of
the period of adoption.

Prior
to May 1, 2005 we accounted for our stock options under Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for Stock Issued to Employees," which
permitted the use of intrinsic value accounting. No stock-based compensation cost was reflected in net income for stock options, as all options granted had an exercise price equal to the market price
of the underlying common stock on the date of grant. We had adopted disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148,
"Accounting for Stock-Based CompensationTransition and Disclosure-an Amendment of FASB Statement No. 123."

We
also granted awards under a stock appreciation rights (SARS) plan. Under Financial Interpretation No. (FIN) 28, "Accounting for Stock Appreciation Rights and Other Variable Stock
Option or Award Plans," SARS were accounted for under variable plan accounting. Accordingly, we recorded deferred compensation as a reduction of shareholders' equity, equal to the excess of the market
value of our common stock on the balance sheet date or date of exercise over the base price at the date of grant. The deferred compensation was recognized as an expense over the vesting period based
on the periods in which the executives and directors performed services.

The
following table illustrates the pro forma effect on net income and earnings per share for fiscal 2006 if we had recorded compensation expense based on the fair value method for all
share-based compensation awards (in thousands, except per share amount):

Year Ended
January 312006Net incomeas reported

$
42,051Add: SARS amortization, net of income taxes of $80 in 2006


(148
)Net income excluding SARS amortization


41,903Deduct: total stock-based compensation, net of income taxes of $140 in 2006, determined under fair value based method


(297
)Net income applicable to common shareholderspro forma

$
41,606Basic earnings per shareas reported

$
3.40Basic earnings per sharepro forma

$
3.37Diluted earnings per shareas reported

$
3.27Diluted earnings per sharepro forma

$
3.24


45

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

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.

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.

46

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

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 $3.8 million, $3.8 million, and
$3.3 million for the years ended January 31, 2008, 2007 and 2006, 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 the financial institutions may exceed the Federal Deposit
Insurance Corporation limit.

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 18 "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 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

47

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

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 and SARS were exercised or converted into common stock using the treasury stock method.

Recent Accounting Pronouncements

SFAS 157In September 2006, the FASB issued 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 will apply this new accounting standard to all other fair value measurements effective February 1, 2008. We are currently evaluating the
impact of the adoption of this statement on our financial statements.

SFAS 158In September 2006, the FASB issued SFAS No. 158 (SFAS 158), "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and 132(R)." This statement requires balance sheet recognition of the overfunded or
underfunded status of pension and postretirement benefit plans. Under SFAS 158,
actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in
other comprehensive income, net of tax effects, until they are amortized as a component of net periodic benefit cost. In addition, the measurement date, the date at which plan assets and the benefit
obligation are measured, is required to be the company's fiscal year end. Presently, we use a December 31 measurement date for the postretirement benefit plan, which will change to coincide
with our January 31 fiscal year-end date. As required by SFAS 158, we adopted the balance sheet recognition provision as of January 31, 2007. The measurement date
provision is effective for the fiscal year beginning February 1, 2008. We are currently evaluating the impact of the adoption of the measurement date provision 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 is required for our financial statements beginning February 1, 2008. We do not expect the adoption of SFAS 159 to 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

48

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2Summary of Significant Accounting Policies (Continued)

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. We are currently evaluating the impact of the adoption of these standards on our financial statements.

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.

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 |        
|----------------------------------------- |  | --------------------- | -------
|
|2008                                      |  |                       |        
|Net sales                                 |  | $                     | 286,832
|Transfers between areas                   |  |                       | 33,118 
|                                          |  |                       |        
|Net sales and transfers                   |  | $                     | 319,950
|                                          |  |                       |        
|Gross profit                              |  | $                     | 109,832
|Selling and administrative                |  |                       | 51,020 
|Loss (gain) on disposition of assets, net |  |                       | (1,135 
|Amortization                              |  |                       | 2,482  
|Insurance litigation recovery, net        |  |                       | (15,977
|                                          |  |                       |        
|Operating income                          |  | $                     | 73,442 
|                                          |  |                       |        
|Total assets                              |  | $                     | 236,022
|Property, plant and equipment, net        |  | $                     | 35,026 
|Capital expenditures                      |  | $                     | 7,986  
|Depreciation expense                      |  | $                     | 7,066  

49

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 3Segment Information (Continued)

|
|

|                                          |  | Year Ended January 31 |        
|----------------------------------------- |  | --------------------- | -------
|
|2007                                      |  |                       |        
|Net sales                                 |  | $                     | 263,312
|Transfers between areas                   |  |                       | 25,367 
|                                          |  |                       |        
|Net sales and transfers                   |  | $                     | 288,679
|                                          |  |                       |        
|Gross profit                              |  | $                     | 102,810
|Selling and administrative                |  |                       | 46,750 
|Loss (gain) on disposition of assets, net |  |                       | 16     
|Amortization                              |  |                       | 598    
|                                          |  |                       |        
|Operating income (loss)                   |  | $                     | 55,446 
|                                          |  |                       |        
|Total assets                              |  | $                     | 213,451
|Property, plant and equipment, net        |  | $                     | 34,378 
|Capital expenditures                      |  | $                     | 6,174  
|Depreciation expense                      |  | $                     | 7,899  

|
|

|                                          |  | Year Ended January 31
|----------------------------------------- |  | ---------------------
|
|2006                                      |  |                      
|Net sales                                 |  | $                    
|Transfers between areas                   |  |                      
|                                          |  |                      
|Net sales and transfers                   |  | $                    
|                                          |  |                      
|Gross profit                              |  | $                    
|Selling and administrative                |  |                      
|Loss (gain) on disposition of assets, net |  |                      
|Amortization                              |  |                      
|                                          |  |                      
|Operating income                          |  | $                    
|                                          |  |                      
|Total assets                              |  | $                    
|Property, plant and equipment, net        |  | $                    
|Capital expenditures                      |  | $                    
|Depreciation expense                      |  | $                    

50

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 3Segment Information (Continued)

The following table represents sales by place of destination:

Year Ended January 312008

2007

2006(In thousands)United States

$
256,149

$
229,438

$
215,815Europe, excluding United Kingdom


128,017


102,329


102,265China


36,471


27,703


20,414United Kingdom


32,819


27,955


27,113Canada


24,941


25,605


26,694Other countries (less than 5% of total sales individually)


79,676


65,820


58,202$
558,073

$
478,850

$
450,503


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 312008

2007

2006(In thousands)United States

$
82,308

$
70,571

$
31,523Canada


80,475


69,131


72,589China


17,766


12,834


4,176The Netherlands


17,730


16,286


16,468Italy


11,930


10,981


11,311Germany


8,935


8,859


9,143Other countries (less than 5% of total long-lived assets individually)


20,919


13,998


13,104$
240,063

$
202,660

$
158,314


Note 4Inventories

January 312008

2007(In thousands)Finished goods

$
35,303

$
24,609Raw materials and components


49,746


33,671$
85,049

$
58,280


51

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 5Property, Plant and Equipment

January 312008

2007(In thousands)Land

$
8,862

$
6,069Buildings


54,889


48,201Machinery and equipment


188,124


164,481251,875


218,751Accumulated depreciation


(153,525
)

(134,600
)$
98,350

$
84,151


Note 6Goodwill

During Fiscal 2008, goodwill increased $12.2 million due to fluctuations in foreign currencies. The remaining increase relates to acquisitions. We have no
goodwill in China. The following table provides a breakdown of goodwill by geographic region:

January 312008

2007(In thousands)North America

$
103,965

$
85,903Europe


11,893


10,598Asia Pacific


2,968


2,997$
118,826

$
99,498


Note 7Intangible Assets

January 312008

2007(In thousands)Customer relationships

$
19,014

$
13,390Intellectual property


5,100


4,617Other


503


1,93824,617


19,945Accumulated amortization


(3,701
)

(2,919
)$
20,916

$
17,026


During
fiscal 2008, intangible assets increased $7.3 million due to acquisitions, which included a $600,000 indefinite-lived asset for a trademark.

52

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 7Intangible Assets (Continued)

The
following table represents future amortization expense as of January 31, 2008 (in thousands):

Year ended January 312009

$
2,6492010


2,5752011


2,3102012


2,2782013


2,132Thereafter


8,372$
20,316


Note 8Warranty Obligations

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

January 312008

2007(In thousands)Beginning obligation

$
1,755

$
1,665Accruals for warranties issued during the period


2,663


2,583Accruals for pre-existing warranties





(12
)Settlements during the year


(2,518
)

(2,481
)Ending obligation

$
1,900

$
1,755


Note 9Debt

|                                                                                                                                                                                                                                                           |  | January 31 |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | -------
|
|
|$150 million revolving line of credit with available principal decreasing $1.25 million quarterly beginning April 1, 2008; variable interest rate payable of 3.91% and 6.05% at January 31, 2008 and 2007,
 respectively; principal payable in fiscal 2012 |  | $          | 104,000
|Note payable, interest at 1.35% at January 31, 2008 adjusting to 2.39% at July 31, 2008; principal payable monthly through fiscal 2018                                                                                                                     |  |            | 4,232  
|Senior notes, interest at 6.92%                                                                                                                                                                                                                            |  |            |       
|Other debt                                                                                                                                                                                                                                                 |  |            |       
|                                                                                                                                                                                                                                                           |  |            |        
|                                                                                                                                                                                                                                                           |  |            | 108,232
|Less current portion                                                                                                                                                                                                                                       |  |            | (423   
|                                                                                                                                                                                                                                                           |  |            |        
|Long-term debt                                                                                                                                                                                                                                             |  | $          | 107,809
|                                                                                                                                                                                                                                                           |  |            |        

Borrowing
arrangements currently in place with commercial banks provide available lines of credit totaling $150 million, of which $3.6 million were being used at
January 31, 2008 through the issuance of

53

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 9Debt (Continued)

letters
of credit. Amounts under the lines of credit bear interest at LIBOR plus a margin between 0.75% and 1.25%, based on certain Company financial ratios. As of January 31, 2008, the
interest rate was LIBOR plus a margin of 0.75% and commitment fees on unused amounts are 0.225%. This line of credit contains covenants relating to net worth and leverage ratios. We were in compliance
with these covenants at January 31, 2008.

During
fiscal 2009 we initiated a note payable in Japan for $4.2 million for the purchase of a new sales/distribution facility. This land and building is used as collateral
against the note.

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

Year ended January 312009

$
4232010


4232011


4232012


104,4232013


423Thereafter


2,117$
108,232


Borrowings
under notes payable to banks, which includes bank overdrafts and short-term lines of credit, were $2.5 million and $4.5 million at January 31, 2008 and
2007, respectively. The average interest rate on these notes was 4.3% and 4.9% at January 31, 2008 and 2007, respectively.

54

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Income Taxes

|                                                                                      |                                                | Year Ended January 31 |       
|------------------------------------------------------------------------------------- | ---------------------------------------------- | --------------------- | ------
|
|
|Provision (benefit) for income taxes consisted of:                                    |                                                |                       |       
|Current:                                                                              |                                                |                       |       
|                                                                                      | Federal                                        |                       | $     
|                                                                                      | State                                          |                       |       
|                                                                                      | Foreign                                        |                       |       
|                                                                                      |                                                |                       |       
|                                                                                      |                                                |                       | 28,156
|                                                                                      |                                                |                       |       
|Deferred:                                                                             |                                                |                       |       
|                                                                                      | Federal                                        |                       |       
|                                                                                      | State                                          |                       |       
|                                                                                      | Foreign                                        |                       |       
|                                                                                      |                                                |                       |       
|                                                                                      |                                                |                       | 2,535 
|                                                                                      |                                                |                       |       
|Total provision for income taxes                                                      |                                                | $                     | 30,691
|                                                                                      |                                                |                       |       
|Income before provision for income taxes was as follows:                              |                                                |                       |       
|                                                                                      | United States                                  |                       | $     
|                                                                                      | Foreign                                        |                       |       
|                                                                                      |                                                |                       |       
|                                                                                      |                                                | $                     | 90,838
|                                                                                      |                                                |                       |       
|Reconciliation of the federal statutory rate to the effective tax rate is as follows: |                                                |                       |       
|                                                                                      | Federal statutory rate                         |                       |       
|                                                                                      | State income taxes, net of federal tax benefit |                       |       
|                                                                                      | Tax on foreign earnings                        |                       |       
|                                                                                      | Net change in valuation allowance              |                       |       
|                                                                                      | U.S. export sales                              |                       |       
|                                                                                      | International financing                        |                       |       
|                                                                                      | Stock options                                  |                       |       
|                                                                                      | U.S. Manufacturing deduction                   |                       |       
|                                                                                      | Other                                          |                       |       
|                                                                                      |                                                |                       |       
|                                                                                      | Effective income tax rate                      |                       |       
|                                                                                      |                                                |                       |       

55

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Income Taxes (Continued)

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



January 312008

2007Deferred tax assets:Accruals

$
3,997

$
3,555Environmental


2,109


2,556Employee benefits


6,501


6,230Foreign tax credits


3,269


6,270Foreign net operating losses


12,704


9,867Foreign capital losses





1,041Other


1,917


1,03330,497


30,552Less: Valuation allowance


(11,672
)

(8,752
)18,825


21,800Deferred tax liabilities:Depreciation


(4,238
)

(4,596
)Cumulative translation adjustment


(3,808
)

(1,865
)Other


(4,328
)

(1,839
)(12,374
)

(8,300
)Total net deferred tax asset

$
6,451

$
13,500


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

January 312008

2007Deferred income taxescurrent asset

$
6,213

$
4,481Deferred income taxeslong-term asset


5,948


11,817Deferred income taxeslong-term liability


(5,710
)

(2,798
)$
6,451

$
13,500


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.

56

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Income Taxes (Continued)

We
recorded a valuation allowance for the year ended January 31, 2008 and January 31, 2007 of approximately $11.7 million and $8.8 million, respectively. The
valuation allowance increased $2.9 million during the year ended January 31, 2008. The net change primarily relates to the realizability of current year foreign net operating losses.
Management determined that for certain foreign jurisdictions, it was more likely than not, we would not realize the deferred tax asset resulting from current net operating losses and an additional
valuation allowance of $1.7 million was recorded against these losses. The remaining $1.2 million increase in the valuation allowance is due to changes in foreign currencies.

During
the year ended January 31, 2007, the valuation allowance decreased $851,000. The net change primarily relates to the realizability of foreign tax credits, net of current
year foreign net operating
losses. During the fourth quarter of fiscal 2007, management determined that it was more likely than not we would realize certain foreign tax credits and a valuation allowance of $2.1 million
against those credits was no longer necessary. Management determined that for certain foreign jurisdictions, it was more likely than not, we would not realize current foreign net operating loss and an
additional valuation allowance of $1.6 million was recorded against these losses. The valuation allowance for net operating losses in The Netherlands was also reduced by $837,000 due to a
reduction in the statutory rate. This change coincided with a reduction in the related deferred tax asset and had no effect on the provision for income taxes for fiscal 2007.

As
of January 31, 2008, we have foreign net operating loss carryforwards in Europe and Australia of approximately $46.8 million. These foreign net operating loss
carryforwards are available to offset future taxable income. Net operating loss carry forwards in The Netherlands totaling $28.8 million expire beginning in 2012 through 2017. The remaining net
operating loss carryforwards have no future expiration dates.

A
deferred tax asset of $3.3 million at January 31, 2008 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 U.S. taxable income over a ten year period ending in fiscal 2017.

Deferred
taxes have not been provided on the excess book basis in the shares of certain foreign subsidiaries in the amount of $9.6 million at January 31, 2008 because these
basis differences are not expected to reverse in the foreseeable future. These basis differences could reverse through a sale of the subsidiaries, the receipt of dividends from the subsidiaries, as
well as various other events.

Effective
February 1, 2007, we adopted the provisions of FASB Interpretation No. 48 ("FIN 48") which prescribes a
more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This
interpretation also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and
penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

57

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 10Income Taxes (Continued)

A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Unrecognized tax benefits balance at February 1, 2007

$
325Gross increases for tax positions related to the current year


13Gross increases for tax positions of prior years


66Gross decreases for tax positions of prior years


(170
)Unrecognized tax benefits balance at January 31, 2008

$
234


We
recognize interest and penalties related to uncertain tax positions in income tax expense. As of January 31, 2008, we had approximately $83,000 of accrued interest and
penalties related to uncertain tax positions.

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. As of January 31, 2008, we remain subject to examination in various state and foreign
jurisdictions for the 1997-2006 tax years.

Note 11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.

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

58

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 11Commitments and Contingencies (Continued)

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 $4.8 million
and $5.9 million at January 31, 2008 and 2007, 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 2013. The recorded liability for ongoing remediation
activities in Springfield was $900,000 and $1.0 million at January 31, 2008 and 2007, respectively.

Presented
below is a roll forward of our environmental liabilities and expenses for the three years ended January 31, 2008 (in thousands):

Fairview

Springfield

Other

TotalBalance at January 31, 2005

$
7,461

$
1,086

$
146

$
8,693Accrued


(259
)

259





Cash payments


(541
)

(207
)

(10
)

(758
)Balance at January 31, 2006

$
6,661

$
1,138

$
136

$
7,935Accrued








(136
)

(136
)Cash payments


(786
)

(151
)




(937
)Balance at January 31, 2007

$
5,875

$
987

$


$
6,862Accrued


(75
)

75





Cash payments


(952
)

(173
)




(1,125
)Balance at January 31, 2008

$
4,848

$
889

$


$
5,737


Lease Commitments

We lease certain facilities and equipment under noncancelable operating leases. Rent expense for the years ended January 31, 2008, 2007, and 2006 totaled
$3.4 million, $2.5 million and $2.4 million, respectively. Future minimum rental commitments under these leases as of January 31, 2008 are as follows (in thousands):

2009

$
3,4402010


2,4982011


1,5792012


7572013


121$
8,395


59

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 11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 $16.0 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 12Supplemental Cash Flow Information

|                                                |                                                      | Year Ended January 31                            |  
|----------------------------------------------- | ---------------------------------------------------- | ------------------------------------------------ | -
|
|
|Cash paid during period for:                    |                                                      |                                                  |  
|                                                | Interest                                             |                                                  | $
|                                                | Income taxes                                         |                                                  | $
|                                                | Business acquisitions:                               |                                                  |  
|                                                |                                                      | Accounts receivable and other assets             |  
|                                                |                                                      | Inventories                                      |  
|                                                |                                                      | Property, plant and equipment                    |  
|                                                |                                                      | Goodwill                                         |  
|                                                |                                                      | Intangible assetcustomer relationships          |  
|                                                |                                                      | Intangible assetintellectual property and other |  
|                                                |                                                      | Accounts payable and other liabilities assumed   |  
|                                                |                                                      | Notes payable assumed                            |  
|                                                |                                                      | Deferred income tax                              |  
|                                                |                                                      |                                                  |  
|                                                | Net cash paid for acquisitions                       |                                                  | $
|                                                |                                                      |                                                  |  
|Supplemental disclosure of noncash information: |                                                      |                                                  |  
|                                                | Minimum pension liability adjustment, net of tax     |                                                  | $
|                                                | Deferred compensation from stock appreciation rights |                                                  | $
|                                                | Liability for common stock repurchase                |                                                  | $

Note 13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

60

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Share-Based Compensation Plans (Continued)

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 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, 2008, a
total of 223,000 shares of common stock have been issued under the SARS plan, which includes 42,000 shares of restricted stock with a grant date fair market value of $73.73 per share.

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, 2008, a total of 1,083,000 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 312008

2007

2006Risk-free interest rate


5.1
%

5.0
%

4.1
%Expected volatility


41
%

41
%

40
%Expected dividend yield


1.0
%

1.6
%

1.1
%Expected life (in years)


7


6


6Weighted average fair value at date of grant

$
33.31

$
15.24

$
17.86


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.

61

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Share-Based Compensation Plans (Continued)

A
summary of award grants under the plans at January 31, 2008, 2007, and 2006, 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
|--------------------------- |  | ------------- | - | -------------------------
|
|Balance at January 31, 2005 |  | 1,185         |   | $                        
|Granted                     |  |              |   |                          
|Exercised                   |  | (325          | ) |                          
|Forfeited                   |  | (19           | ) |                          
|                            |  |               |   |                          
|Balance at January 31, 2006 |  | 841           |   |                          
|Granted                     |  |              |   |                          
|Exercised                   |  | (246          | ) |                          
|Forfeited                   |  | (25           | ) |                          
|                            |  |               |   |                          
|Balance at January 31, 2007 |  | 570           |   |                          
|Granted                     |  |              |   |                          
|Exercised                   |  | (276          | ) |                          
|Forfeited                   |  | (8            | ) |                          
|                            |  |               |   |                          
|Balance at January 31, 2008 |  | 286           |   | $                        
|                            |  |               |   |                          

A
summary of award activity under the Plans as of January 31, 2008, is presented below:

|                                                     |  | Awards |  | Weighted-
Average
Exercise
Price |       | Aggregate
Intrinsic
Value |   | Weighted
Average
Contractural
Life
|---------------------------------------------------- |  | ------ |  | -------------------------------- | ----- | ------------------------- | - | ----------------------------------
|
|Outstanding at January 31, 2008                      |  | 1,101  |  | $                                | 29.34 |                           | $ | 25,958                            
|                                                     |  |        |  |                                  |       |                           |   |                                   
|Outstanding at January 31, 2008 and expected to vest |  | 457    |  | $                                | 37.98 |                           | $ | 7,498                             
|                                                     |  |        |  |                                  |       |                           |   |                                   
|Exercisable at January 31, 2008                      |  | 561    |  | $                                | 21.19 |                           | $ | 17,072                            
|                                                     |  |        |  |                                  |       |                           |   |                                   

Aggregate
intrinsic value excludes 64,000 SARs with an exercise price in excess of the market value of our common stock as of January 31, 2008.

The
total intrinsic value of options exercised during the years ended January 31, 2008, 2007and 2006 was $15.4 million, $8.4 million and $10.3 million,
respectively. The total intrinsic value of SARS exercised during the years ended January 31, 2008, 2007 and 2006 was $8.7 million, $2.2 million, and $1.0 million,
respectively.

The
tax benefit recognized from share-based awards exercised during the years ended January 31, 2008, 2007, and 2006 was $3.1 million, $1.1 million, and $582,000,
respectively.

62

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 13Share-Based Compensation Plans (Continued)

A
summary of the status of the Plans' nonvested awards as of January 31, 2008 is presented below (in thousands, except per share amounts):

|                              |  | Stock Options |   | Stock Appreciation Rights
|----------------------------- |  | ------------- | - | -------------------------
|
|Nonvested at January 31, 2005 |  | 526           |   | $                        
|Granted                       |  |              |   |                          
|Vested                        |  | (227          | ) |                          
|Forfeited                     |  |              |   |                          
|                              |  |               |   |                          
|Nonvested at January 31, 2006 |  | 299           |   |                          
|Granted                       |  |              |   |                          
|Vested                        |  | (159          | ) |                          
|Forfeited                     |  | (25           | ) |                          
|                              |  |               |   |                          
|Nonvested at January 31, 2007 |  | 115           |   |                          
|Granted                       |  |              |   |                          
|Vested                        |  | (89           | ) |                          
|Forfeited                     |  | (7            | ) |                          
|                              |  |               |   |                          
|Nonvested at January 31, 2008 |  | 19            |   | $                        
|                              |  |               |   |                          

As
of January 31, 2008, there was $8.9 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 2.3 years. The following table represents as of January 31, 2008 the share-based compensation costs to be recognized
in future periods (in thousands) for awards granted to date:

Fiscal Year

Amount2009

$
4,5292010


3,0372011


1,1542012


198$
8,918


Note 14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

63

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Employee Benefit Plans (Continued)

services
rendered through the measurement date. We use a measurement date of January 31 for all defined benefit pension plans and December 31 for the postretirement plan.

|                                                    |                                                | Year Ended January 31        |   | Year ended January 31 |     
|--------------------------------------------------- | ---------------------------------------------- | ---------------------------- | - | --------------------- | ----
|
|
|
|Change in benefit obligation                        |                                                |                              |   |                       |     
|                                                    | Benefit obligation at beginning of year        |                              | $ | 9,899                 |     
|                                                    |                                                | Service cost                 |   |                       | 34  
|                                                    |                                                | Interest cost                |   |                       | 524 
|                                                    |                                                | Participant contributions    |   |                       |    
|                                                    |                                                | Plan amendments              |   |                       |    
|                                                    |                                                | Benefits paid                |   |                       | (313
|                                                    |                                                | Actuarial (gain) or loss     |   |                       | (116
|                                                    |                                                | Settlements                  |   |                       | 83  
|                                                    |                                                | Exchange rate changes        |   |                       | 174 
|                                                    |                                                |                              |   |                       |     
|                                                    | Benefit obligation at end of year              |                              |   | 10,285                |     
|                                                    |                                                |                              |   |                       |     
|Change in plan assets                               |                                                |                              |   |                       |     
|                                                    | Fair value of plan assets at beginning of year |                              |   | 7,693                 |     
|                                                    |                                                | Actual return on plan assets |   |                       | (26 
|                                                    |                                                | Employer contributions       |   |                       | 496 
|                                                    |                                                | Participant contributions    |   |                       |    
|                                                    |                                                | Benefits paid                |   |                       | (313
|                                                    |                                                | Settlements                  |   |                       |    
|                                                    |                                                | Exchange rate changes        |   |                       | 92  
|                                                    |                                                |                              |   |                       |     
|                                                    | Fair value of plan assets at end of year       |                              |   | 7,942                 |     
|                                                    |                                                |                              |   |                       |     
|Reconciliation of funded status                     |                                                |                              |   |                       |     
|                                                    | Funded status                                  |                              |   | (2,343                | )   
|                                                    | Unrecognized actuarial loss                    |                              |   | N/A                   |     
|                                                    | Unrecognized prior service cost                |                              |   | N/A                   |     
|                                                    |                                                |                              |   |                       |     
|                                                    | Net amount recognized at year-end              |                              | $ | (2,343                | )   
|                                                    |                                                |                              |   |                       |     
|Amounts recognized in the balance sheet consist of: |                                                |                              |   |                       |     
|                                                    | Current liability                              |                              | $ | (270                  | )   
|                                                    | Non-current liability                          |                              |   | (2,073                | )   
|                                                    | Prepaid benefit cost                           |                              |   |                      |     
|                                                    | Accrued benefit cost                           |                              |   |                      |     
|                                                    | Accumulated other comprehensive income         |                              |   |                      |     
|                                                    |                                                |                              |   |                       |     
|                                                    | Net amount recognized at year-end              |                              | $ | (2,343                | )   
|                                                    |                                                |                              |   |                       |     

64

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Employee Benefit Plans (Continued)

|Amounts recognized in accumulated other comprehensive income (pre-tax) consist of: |                                                               |  |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |    
|---------------------------------------------------------------------------------- | ------------------------------------------------------------- |  | - | ----- | - | - | ----- | - | - | ---- | - | - | ---- | - | - | ----- | - | - | ---
|                                                                                   | Net actuarial loss (gain)                                     |  | $ | 2,124 |   | $ | 2,087 |   | $ |     |   | $ | 735  |   | $ | 1,715 |   | $ |   
|                                                                                   | Prior service cost (credit)                                   |  |   |      |   |   |      |   |   |     |   |   | (591 | ) |   | (668  | ) |   |   
|                                                                                   |                                                               |  |   |       |   |   |       |   |   |      |   |   |     
|                                                                                   | Total                                                         |  | $ | 2,124 |   | $ | 2,087 |   | $ |     |   | $ | 144  |   | $ | 1,047 |   | $ |   
|                                                                                   |                                                               |  |   |       |   |   |       |   |   |      |   |   |     
|Components of net periodic benefit cost                                            |                                                               |  |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |    
|                                                                                   | Service cost                                                  |  | $ | 34    |   | $ | 59    |   | $ | 199  |   | $ | 121  |   | $ | 136   |   | $ | 127
|                                                                                   | Interest cost                                                 |  |   | 524   |   |   | 480   |   |   | 464  |   |   | 421  |   |   | 456   |   |   | 433
|                                                                                   | Expected return on plan assets                                |  |   | (516  | ) |   | (458  | ) |   | (446 | ) |   |     |   |   |      |   |   |   
|                                                                                   | Settlement loss                                               |  |   | 82    |   |   | 140   |   |   |     |   |   |     |   |   |      |   |   |   
|                                                                                   | Recognized net actuarial loss                                 |  |   | 102   |   |   | 144   |   |   | 121  |   |   | 116  |   |   | 366   |   |   | 346
|                                                                                   |                                                               |  |   |       |   |   |       |   |   |      |   |   |     
|                                                                                   | Net periodic benefit cost                                     |  | $ | 226   |   | $ | 365   |   | $ | 338  |   | $ | 658  |   | $ | 958   |   | $ | 906
|                                                                                   |                                                               |  |   |       |   |   |       |   |   |      |   |   |     
|Weighted-average assumptions                                                       |                                                               |  |   |       |   |   |       |   |   |      |   |   |      |   |   |       |   |   |    
|                                                                                   | Discount rate for benefit obligation                          |  |   | 5.8   | % |   | 5.2   | % |   | 4.7  | % |   | 6.3  | % |   | 5.8   | % |   | 5.5
|                                                                                   | Discount rate for net periodic benefit cost                   |  |   | 5.2   | % |   | 4.7   | % |   | 5.3  | % |   | 5.8  | % |   | 5.5   | % |   | 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 |  |   | 3.3   | % |   | 3.0   | % |   | 3.0  | % |   |     |   |   |      |   |   |   

The
table below 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):

|            |  |   |       | Postretirement Benefit
|----------- |  | - | ----- | ----------------------
|
|2009        |  | $ | 267   |                       
|2010        |  |   | 263   |                       
|2011        |  |   | 284   |                       
|2012        |  |   | 308   |                       
|2013        |  |   | 306   |                       
|2014 - 2018 |  |   | 1,629 |                       

Our
expected contribution in fiscal 2009 to the defined benefit pension plans is $397,000.

The
amount in accumulated other comprehensive income expected to be recognized as components of net periodic benefit costs in fiscal 2009 include an actuarial loss of $104,000 for our
defined benefit plans and an actuarial loss of $5,000 and a prior service credit of $77,000 for our postretirement plan.

65

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Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Employee Benefit Plans (Continued)

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.

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, 2008 and 2007 are as follows:

Percentage of Plan Assets At January 31Asset Category

Target allocation2008

2007Equity

52
%
53
%
52
%Debt

40
%
40
%
40
%Real estate

4
%
3
%
4
%Cash

4
%
4
%
4
%


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 $10.1 million at January 31, 2008 and $9.8 million at January 31, 2007. The net underfunded
pension liability was $2.3 million and $2.2 million as of January 31, 2008 and 2007, respectively. The increase in the liability in fiscal 2008 is primarily the result of changes
in mortality assumptions, which was offset by an increase in the discount rate.

66

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Employee Benefit Plans (Continued)

During
fiscal 2006, we modified certain provisions of our plan in England. These provisions eliminated the accrual of future benefits under the plan after November 1, 2005 and
committed us to make contributions to the plan of approximately $400,000 annually over a five year period. As of January 31, 2008 we have three contributions remaining at this level through
fiscal 2011.

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 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 312008

2007Health care cost trend rate assumed next year

9
%
10
%Ultimate trend rate

4.5
%
4.5
%Year ultimate trend rate is reached

2017

2013


The
following presents the effect of a 1% change in health care cost trend rates at January 31, 2007 (in thousands):

1%
Increase

1%
DecreaseChange in health care cost trend rate:Effect on service and interest costs

$
70

$
(60
)Effect on postretirement benefit obligation


850


(723
)


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

67

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 14Employee Benefit Plans (Continued)

wages.
Our expense under these plans was $5.4 million, $4.8 million and $4.0 million, for the years ended January 31, 2008, 2007 and 2006, respectively.

Note 15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
|--------------------------- | ----------------------------------------------------------- | ---------------------
|
|Basic earnings per share:   |                                                             |                      
|                            | Net income                                                  |                      
|                            |                                                             |                      
|                            | Weighted average shares of common stock outstanding         |                      
|                            |                                                             |                      
|                            |                                                             | $                    
|Diluted earnings per share: |                                                             |                      
|                            | Net income                                                  |                      
|                            |                                                             |                      
|                            | Weighted average shares of common stock outstanding         |                      
|                            | Dilutive effect of stock awards                             |                      
|                            |                                                             |                      
|                            | Diluted weighted average shares of common stock outstanding |                      
|                            |                                                             |                      
|                            |                                                             | $                    

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 66,000 and 381,000 awards were excluded
from the fiscal 2008 and 2007 calculations of diluted earnings per share because they were antidilutive. The remaining SARs and all stock options and restricted stock were included in our calculation
of incremental shares because they are dilutive.

68

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 16Accumulated Other Comprehensive Income (Loss)

|                                                                                  |  | Accumulated Other Comprehensive Income (Loss) |       
|--------------------------------------------------------------------------------- |  | --------------------------------------------- | ------
|
|
|Balance at January 31, 2005                                                       |  | $                                             | 10,075
|Translation adjustment                                                            |  |                                               | 592   
|Minimum pension liability adjustment, net of tax effect of $393                   |  |                                               |      
|                                                                                  |  |                                               |       
|Balance at January 31, 2006                                                       |  |                                               | 10,667
|Translation adjustment                                                            |  |                                               | 4,008 
|Minimum pension/postretirement liability adjustment, net of tax effect of $360    |  |                                               |      
|                                                                                  |  |                                               |       
|Balance at January 31, 2007                                                       |  |                                               | 14,675
|Translation adjustment                                                            |  |                                               | 22,817
|Minimum pension/post retirement liability adjustment, net of tax effect of ($304) |  |                                               |      
|                                                                                  |  |                                               |       
|Balance at January 31, 2008                                                       |  | $                                             | 37,492
|                                                                                  |  |                                               |       

Note 17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 18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 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.

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. These derivatives do not qualify for hedge accounting, in accordance with SFAS No. 133
"Accounting for Derivative

69

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)

Note 18Derivative Instruments and Hedging Activities (Continued)

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. During the years ended January 31, 2008 and 2006, a net foreign currency loss of
$1.5 million and $120,000, respectively was included in other income and expense on the statements of income. During the year ended January 31, 2007 a net foreign currency gain of
$1.1 million was included in other income and expense on the statement of income.

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, 2008 and 2007, we had approximately $71.4 million and $44.3 million, respectively, nominal value of contracts in place to buy or sell foreign
currency. The fair value of these contracts is not materially different than the nominal value. The difference between the nominal and fair value is recorded in the consolidated financial statements
as an unrealized foreign currency gain or loss. The principal currencies hedged are denominated in Canadian dollars, Euros, British pounds and Japanese yen.

Note 19Acquisitions

We completed the following acquisitions during the three years ended January 31, 2008:



70

---



Cascade Corporation

Notes to Consolidated Financial Statements (Continued)



Note 20Supplementary Quarterly Financial Information (unaudited)

|                            |                       | 1st Quarter |   | 2nd Quarter |      | 3rd Quarter |         | 4th Quarter
|--------------------------- | --------------------- | ----------- | - | ----------- | ---- | ----------- | ------- | -----------
|
|Year ended January 31, 2008 |                       |             |   |             |      |             |         |            
|                            | Net sales             |             | $ | 135,500     |      | $           | 143,183 |            
|                            | Gross profit          |             | $ | 43,229      |      | $           | 45,286  |            
|                            | Operating income      |             | $ | 37,311      |      | $           | 23,525  |            
|                            | Net income            |             | $ | 23,796      |      | $           | 15,144  |            
|                            | Net income per share: |             |   |             |      |             |         |            
|                            |                       | Basic       |   | $           | 1.99 |             | $       | 1.27       
|                            |                       | Diluted     |   | $           | 1.90 |             | $       | 1.21       
|Year ended January 31, 2007 |                       |             |   |             |      |             |         |            
|                            | Net sales             |             | $ | 117,774     |      | $           | 119,376 |            
|                            | Gross profit          |             | $ | 36,689      |      | $           | 38,353  |            
|                            | Operating income      |             | $ | 17,197      |      | $           | 18,106  |            
|                            | Net income            |             | $ | 11,034      |      | $           | 11,923  |            
|                            | Net income per share: |             |   |             |      |             |         |            
|                            |                       | Basic       |   | $           | 0.88 |             | $       | 0.95       
|                            |                       | Diluted     |   | $           | 0.84 |             | $       | 0.91       

71

---





Schedule II        Cascade Corporation        Valuation and Qualifying Accounts  (In thousands)

|Column A                                   |  | Column B |        | Column C |   | Column D |  | Column E |        | Column F
|------------------------------------------ |  | -------- | ------ | -------- | - | -------- |  | -------- | ------ | --------
|
|Years ended January 31:                    |  |          |        |          |   |          |  |          |        |         
|2008                                       |  |          |        |          |   |          |  |          |        |         
|Allowance for doubtful accounts receivable |  | $        | 1,515  |          | $ | 45       |  | $        | (123   | )       
|Valuation allowances-deferred tax assets   |  | $        | 8,752  |          | $ | 1,798    |  | $        | (49    | )       
|Obsolete inventory reserve                 |  | $        | 2,280  |          | $ | 497      |  | $        | (1,182 | )       
|2007                                       |  |          |        |          |   |          |  |          |        |         
|Allowance for doubtful accounts receivable |  | $        | 1,415  |          | $ | 254      |  | $        | (225   | )       
|Valuation allowances-deferred tax assets   |  | $        | 9,603  |          | $ | 653      |  | $        | (2,070 | )       
|Obsolete inventory reserve                 |  | $        | 1,592  |          | $ | 588      |  | $        | (329   | )       
|2006                                       |  |          |        |          |   |          |  |          |        |         
|Allowance for doubtful accounts receivable |  | $        | 2,182  |          | $ | 137      |  | $        | (847   | )       
|Valuation allowances-deferred tax assets   |  | $        | 11,437 |          | $ | 1,609    |  | $        | (3,117 | )       
|Obsolete inventory reserve                 |  | $        | 2,051  |          | $ | 411      |  | $        | (813   | )       

72

---





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, 2008. 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, 2008, 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, 2008, has been audited by PricewaterhouseCoopers LLP, an independent registered public
accounting firm, as stated in their attestation 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, 2008 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 14, 2007 our Chief Financial 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.

73

---



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 2008 Annual
Meeting to be filed within 120 days after our fiscal year end of January 31, 2008, ("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:



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

74

---



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.

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.

75

---





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                                                        |  | 37
|   | Consolidated Financial Statements:                                                                             |  |   
|   | Statements of Income for each of the three years in the period ended January 31, 2008                          |  | 39
|   | Balance Sheets at January 31, 2008 and 2007                                                                    |  | 40
|   | Statements of Changes in Shareholders' Equity for each of the three years in the period ended January 31, 2008 |  | 41
|   | Statements of Cash Flows for each of the three years in the period ended January 31, 2008                      |  | 42
|   | Notes to Consolidated Financial Statements                                                                     |  | 43
|2. | Financial Statement Schedule for each of the three years ended January 31, 2008, 2007 and 2006.                |  |   
|   | Valuation and Qualifying Accounts                                                                              |  | 72

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, 2008, 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.

|Exhibit No. |  | Description                                                                                                                                                                                                                                               
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Articles of Incorporation, as amended, filed as Exhibit 4.1 to the Registration Statement on Form S-8 (Registration No. 333-111860) filed with the Commission on January 12, 2004.(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.(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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|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 |  | Asset Purchase Agreement dated December 14, 2006, among Pacific Services & Manufacturing, Inc., Walter Pisco, PSM LLC, and Cascade Corporation, filed as Exhibit 2.1 to Form 8-K filed with the Commission on
December 20, 2006.(1)                                     
|10.16 |  | 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.                                                                                          
|10.17 |  | 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.                                                                                          
|14    |  | Code of Ethics and Business Responsibilities for Directors, Officers, and Employees.                                                                                                                                                                                    
|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                                                                                                                                                                 

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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 CORPORATION
| |  | -------------------
| |  | By:                

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 7, 2008
Date
|--------------------------------------------- |  | ---------------------------------------------------------------------------------------------- |  | ------------------
|/s/RICHARD S. ANDERSONRichard S. Anderson     |  | Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |  | April 7, 2008
Date
|/s/JAMES S. OSTERMANJames S. Osterman         |  | Director                                                                                       |  | April 7, 2008
Date
|/s/NICHOLAS R. LARDYNicholas R. Lardy         |  | Director                                                                                       |  | April 7, 2008
Date
|/s/DUANE C. MCDOUGALLDuane C. McDougall       |  | Director                                                                                       |  | April 7, 2008
Date
|/s/PETER D. NICKERSONPeter D. Nickerson       |  | Director                                                                                       |  | April 7, 2008
Date
|/s/HENRY W. WESSINGER IIHenry W. Wessinger II |  | Director                                                                                       |  | April 7, 2008
Date
|/s/NANCY A. WILGENBUSCHNancy A. Wilgenbusch   |  | Director                                                                                       |  | April 7, 2008
Date

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                                                                             
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Articles of Incorporation, as amended, filed as Exhibit 4.1 to the Registration Statement on Form S-8 (Registration No. 333-111860) filed with the Commission on January 12, 2004.(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.(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)

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|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 |  | Asset Purchase Agreement dated December 14, 2006, among Pacific Services & Manufacturing, Inc., Walter Pisco, PSM LLC, and Cascade Corporation, filed as Exhibit 2.1 to Form 8-K filed with the Commission on
December 20, 2006.(1)                                  
|10.16 |  | 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.                                                                                       
|10.17 |  | 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.                                                                                       
|14    |  | Code of Ethics and Business Responsibilities for Directors, Officers, and Employees.                                                                                                                                                                                 
|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                                                                                                                                                              

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