##### 



Financial Highlights
 For Fiscal Years
    2005
    

    2004Operating ResultsNet sales
    
    $
    835,403
    
    
    $
    613,610Segment earnings
    
    
    105,799
    
    
    
    67,890Income from continuing operations
    
    
    51,034
    
    
    
    29,375Income from discontinued operations, net of tax
    
    
    6,992
    
    
    
    10,208Net earnings
    
    
    58,026
    
    
    
    39,583Earnings per share  diluted:Continuing operations
    
    
    2.02
    
    
    
    1.37Discontinued operations
    
    
    .27
    
    
    
    .47Earnings per share
    
    
    2.29
    
    
    
    1.84Weighted average shares outstanding  diluted
    
    
    25,302
    
    
    
    21,539Financial PositionTotal assets
    
    $
    1,115,248
    
    
    $
    935,348Property, plant and equipment, net
    
    
    138,214
    
    
    
    145,135Long-term debt, net
    
    
    175,682
    
    
    
    249,056Shareholders equity
    
    
    620,864
    
    
    
    461,028
 1




---



##### 



Managements Discussion and Analysis of Financial Condition and Results of Continuing Operations
 OVERVIEW
    2




---



##### 



3




---



##### 



Results of Continuing Operations
 Fiscal 2005 Compared with Fiscal 2004
  Increase (Decrease)Dollars In Thousands
    
    From Prior Year

    2005
    


    2004Avionics & Controls
    
    
    24.8
    %
    
    $
    261,550
    
    
    $
    209,498Sensors & Systems
    
    
    76.8
    %
    
    
    319,539
    
    
    
    180,768Advanced Materials
    
    
    13.9
    %
    
    
    254,314
    
    
    
    223,344Total
    
    
    
    
    
    $
    835,403
    
    
    $
    613,610
      4




---



##### 



5




---



##### 



6




---



##### 



7




---



##### 



Fiscal 2004 Compared with Fiscal 2003
  Increase (Decrease)Dollars In Thousands
    
    From Prior Year
    2004
    

    2003Avionics & Controls
    
    
    5.7
    %
    
    $
    209,498
    
    
    $
    198,249Sensors & Systems
    
    
    34.7
    %
    
    
    180,768
    
    
    
    134,228Advanced Materials
    
    
    3.1
    %
    
    
    223,344
    
    
    
    216,655Total
    
    
    
    
    
    $
    613,610
    
    
    $
    549,132
      8




---



##### 



9




---



##### 



10




---



##### 



11




---



##### 



Liquidity and Capital Resources
 Working Capital and Statement of Cash Flows
   Capital Expenditures
  Debt Financing
  12




---



##### 



13




---



##### 



Pension Obligations
   2005
    
    2004Principal assumptions as of fiscal year end:Discount Rate
    
    
    5.5
    %
    
    
    6.0
    %Rate of increase in future compensation levels
    
    
    4.5
    %
    
    
    4.5
    %Assumed long-term rate of return on plan assets
    
    
    8.5
    %
    
    
    8.5
    %
  Research and Development Expense
  14




---



##### 



Acquisitions
      15




---



##### 



Equity Offering
  Contractual Obligations
   Less than
    
    1-3
    
    4-5
    
    After 5In Thousands
    
    Total
    
    1 year
    
    years
    
    years
    
    yearsLong-term debt
    
    $
    246,616
    
    
    $
    69,922
    
    
    $
    1,227
    
    
    $
    412
    
    
    $
    175,055Credit facilities
    
    
    2,031
    
    
    
    2,031
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    57,312
    
    
    
    9,257
    
    
    
    16,297
    
    
    
    14,186
    
    
    
    17,572Purchase obligationsNot recorded on balance sheet
    
    
    93,501
    
    
    
    75,958
    
    
    
    14,233
    
    
    
    3,310
    
    
    
    Recorded on balance sheet
    
    
    160,568
    
    
    
    160,568
    
    
    
    
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    560,028
    
    
    $
    317,736
    
    
    $
    31,757
    
    
    $
    17,908
    
    
    $
    192,627
 Seasonality
  16




---



##### 



Disclosures About Market Risk
 Interest Rate Risks
  
 Long-Term Debt  Fixed Rate
    
    
    Interest Rate SwapPrincipal
    
    
    Average
    
    
    Notional
    
    
    Average
    
    
    AverageMaturing in:
    
    Amount
    
    
    Rates
    
    
    Amount
    
    
    Pay Rate(1)
    
    
    Receive Rate2006
    
    $
    70,934
    
    
    
    6.62
    %
    
    $
    
    
    

    *
    

    

    
    
    7.75
    %2007
    
    
    763
    
    
    
    5.79
    %
    
    
    
    
    
    *
    

    

    
    
    7.75
    %2008
    
    
    464
    
    
    
    7.20
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %2009
    
    
    390
    
    
    
    7.08
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %2010
    
    
    22
    
    
    
    7.18
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %Thereafter
    
    
    175,055
    
    
    
    7.75
    %
    
    
    75,000
    
    
    *
    

    
    
    
    7.75
    %Total
    
    $
    247,628
    
    
    
    
    
    
    $
    75,000Fair Value at
10/28/2005
    
    $
    252,330
    
    
    
    
    
    
    $
    (1,012
    )
 
 (1)
    
    The average pay rate is LIBOR plus 2.56%. 17




---



##### 



Long-Term Debt  Fixed Rate
    
    
    Interest Rate SwapPrincipal
    
    
    Average
    
    
    Notional
    
    
    Average
    
    
    AverageMaturing in:
    
    Amount
    
    
    Rates
    
    
    Amount
    
    
    Pay Rate(1)
    
    
    Receive Rate2005
    
    $
    1,031
    
    
    
    7.40
    %
    
    $
    
    
    
    *
    

    
    
    
    7.75
    %2006
    
    
    30,763
    
    
    
    6.40
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %2007
    
    
    502
    
    
    
    7.00
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %2008
    
    
    438
    
    
    
    7.00
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %2009
    
    
    40,437
    
    
    
    6.80
    %
    
    
    
    
    
    *
    

    
    
    
    7.75
    %Thereafter
    
    
    175,147
    
    
    
    7.75
    %
    
    
    75,000
    
    
    *
    

    
    
    
    7.75
    %Total
    
    $
    248,318
    
    
    
    
    
    
    $
    75,000Fair Value at
10/29/2004
    
    $
    271,069
    
    
    
    
    
    
    $
    1,769
 
 (1)
    
    The average pay rate is LIBOR plus 2.56%. Currency Risks
   18




---



##### 



Firmly Committed Sales Contracts
Operations with Foreign Functional Currency
At October 28, 2005
 Principal Amount by Expected Maturity
Average Foreign Currency Exchange Rate (USD/Foreign Currency)
  Euro
    
    U.K. PoundFirmly Committed
    
    Firmly CommittedSales Contracts
    
    Sales ContractsFiscal Years
    
    United States Dollar
    
    United States Dollar2006
    
    $
    26,883
    
    
    $
    15,7052007
    
    
    6,153
    
    
    
    2,0722008
    
    
    2,094
    
    
    
    4022009
    
    
    
    
    
    
    2,9092010
    
    
    
    
    
    
    46Total
    
    $
    35,130
    
    
    $
    21,134
 19




---



##### 



Derivative Contracts
Operations with Foreign Functional Currency
At October 28, 2005
 Notional Amount by Expected Maturity
Average Foreign Currency Exchange Rate (USD/Foreign Currency) 1
   United States DollarFiscal Years
    
    Notional Amount
    
    Avg. Contract Rate2006
    
    $
    17,800
    
    
    
    1.2662007
    
    
    2,090
    
    
    
    1.244Total
    
    $
    19,890Fair Value at 10/28/2005
    
    $
    (501
    )
  United States DollarFiscal Years
    
    Notional Amount
    
    Avg. Contract Rate2006
    
    $
    16,370
    
    
    
    1.8242007
    
    
    2,240
    
    
    
    1.800Total
    
    $
    18,610Fair Value at 10/28/2005
    
    $
    (433
    )
 
 1
    
    The Company has no derivative contracts maturing after fiscal 2007. 20




---



##### 



Firmly Committed Sales Contracts
Operations with Foreign Functional Currency
At October 29, 2004
 Principal Amount by Expected Maturity
Average Foreign Currency Exchange Rate (USD/Foreign Currency)
  Euro
    
    U.K. PoundFirmly Committed
    
    Firmly CommittedSales Contracts
    
    Sales ContractsFiscal Years
    
    United States Dollar
    
    United States Dollar2005
    
    $
    18,199
    
    
    $
    10,8162006
    
    
    5,205
    
    
    
    1012007
    
    
    5,452
    
    
    
    1492008
    
    
    3
    
    
    
    2009
    
    
    2
    
    
    
    Total
    
    $
    28,861
    
    
    $
    11,066
 21




---



##### 



Derivative Contracts
Operations with Foreign Functional Currency
At October 29, 2004
 Notional Amount by Expected Maturity
Average Foreign Currency Exchange Rate (USD/Foreign Currency) 1
   United States DollarFiscal Years
    
    Notional Amount
    
    Avg. Contract Rate2005
    
    $
    13,340
    
    
    
    1.2042006
    
    
    1,700
    
    
    
    1.218Total
    
    $
    15,040Fair Value
at 10/29/2004
    
    $
    855
  United States DollarFiscal Years
    
    Notional Amount
    
    Avg. Contract Rate2005
    
    $
    10,575
    
    
    
    1.7822006
    
    
    900
    
    
    
    1.754Total
    
    $
    11,475Fair Value
at 10/29/2004
    
    $
    241
 
 1
    
    The Company has no derivative contracts maturing after fiscal 2006. 22




---



##### 



Critical Accounting Policies
  Revenue Recognition
   Allowance for Doubtful Accounts
  Inventories
  23




---



##### 



Goodwill and Intangible Assets in Business Combinations
  Impairment of Goodwill and Intangible Assets
      24




---



##### 



Impairment of Long-lived Assets
  Contingencies
  Income Taxes
  25




---



##### 



Recent Accounting Pronouncements
       26




---



##### 



27




---



##### 



Market Price of Esterline Common Stock
  For Fiscal Years
    
    2005
    
    
    2004High
    
    
    Low
    
    
    High
    
    
    LowQuarterFirst
    
    $
    36.62
    
    
    $
    28.70
    
    
    $
    29.55
    
    
    $
    21.71Second
    
    
    36.52
    
    
    
    29.20
    
    
    
    29.80
    
    
    
    23.00Third
    
    
    43.01
    
    
    
    31.60
    
    
    
    31.70
    
    
    
    22.52Fourth
    
    
    44.27
    
    
    
    35.85
    
    
    
    34.19
    
    
    
    27.83
    28




---



##### 



Selected Financial Data
  For Fiscal Years
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Operating Results1Net sales
    
    $
    835,403
    
    
    $
    613,610
    
    
    $
    549,132
    
    
    $
    421,706
    
    
    $
    413,220Cost of sales
    
    
    573,453
    
    
    
    418,590
    
    
    
    376,931
    
    
    
    285,900
    
    
    
    261,422Selling, general
and administrative
    
    
    137,426
    
    
    
    118,746
    
    
    
    105,301
    
    
    
    79,085
    
    
    
    67,586Research, development
and engineering
    
    
    42,238
    
    
    
    25,856
    
    
    
    17,782
    
    
    
    13,829
    
    
    
    12,443Other (income) expense
    
    
    514
    
    
    
    (509
    )
    
    
    
    
    
    
    
    
    
    
    Loss (gain) on sale
of product line
    
    
    
    
    
    
    (3,434
    )
    
    
    66
    
    
    
    
    
    
    
    Insurance settlement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,631
    )Loss (gain) on derivative
financial instruments
    
    
    
    
    
    
    
    
    
    
    (2,676
    )
    
    
    1
    
    
    
    (786
    )Interest income
    
    
    (4,057
    )
    
    
    (1,964
    )
    
    
    (868
    )
    
    
    (1,814
    )
    
    
    (3,307
    )Interest expense
    
    
    18,159
    
    
    
    17,336
    
    
    
    11,991
    
    
    
    7,117
    
    
    
    7,658Income from
continuing operations
before income taxes
    
    
    67,670
    
    
    
    38,989
    
    
    
    40,605
    
    
    
    37,588
    
    
    
    72,835Income tax expense
    
    
    16,301
    
    
    
    9,592
    
    
    
    12,458
    
    
    
    9,111
    
    
    
    26,589Income from
continuing operations
    
    
    51,034
    
    
    
    29,375
    
    
    
    28,147
    
    
    
    28,477
    
    
    
    46,246Income (loss) from
discontinued
operations, net of tax
    
    
    6,992
    
    
    
    10,208
    
    
    
    (5,312
    )
    
    
    (25,264
    )
    
    
    (9,294
    )Cumulative effect of a
change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,574
    )
    
    
    (403
    )Net earnings (loss)
    
    
    58,026
    
    
    
    39,583
    
    
    
    22,835
    
    
    
    (4,361
    )
    
    
    36,549Earnings (loss) per
share  diluted:Continuing
operations
    
    $
    2.02
    
    
    $
    1.37
    
    
    $
    1.33
    
    
    $
    1.35
    
    
    $
    2.31Discontinued
operations
    
    
    .27
    
    
    
    .47
    
    
    
    (.25
    )
    
    
    (1.20
    )
    
    
    (.46
    )Cumulative effect
of a change in
accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (.36
    )
    
    
    (.02
    )Earnings (loss) per
share  diluted
    
    
    2.29
    
    
    
    1.84
    
    
    
    1.08
    
    
    
    (.21
    )
    
    
    1.83
 29




---



##### 



Selected Financial Data
  For Fiscal Years
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Financial StructureTotal assets
    
    $
    1,115,248
    
    
    $
    935,348
    
    
    $
    802,827
    
    
    $
    573,678
    
    
    $
    561,306Long-term debt, net
    
    
    175,682
    
    
    
    249,056
    
    
    
    246,792
    
    
    
    102,133
    
    
    
    102,125Shareholders equity
    
    
    620,864
    
    
    
    461,028
    
    
    
    396,069
    
    
    
    357,164
    
    
    
    351,793Weighted average shares
outstanding  diluted
    
    
    25,302
    
    
    
    21,539
    
    
    
    21,105
    
    
    
    21,021
    
    
    
    20,014
 1
    
    Operating results for 2005 through 2001 and balance sheet items for 2003 through 2002
reflect the segregation of continuing operations from discontinued operations. See Note 2 to
the Consolidated Financial Statements.
 For Fiscal Years
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Other Selected Data2EBITDA from continuing
operations
    
    $
    119,326
    
    
    $
    83,497
    
    
    $
    73,984
    
    
    $
    61,732
    
    
    $
    82,214Stock option expense
(income)
    
    
    2,799
    
    
    
    4,326
    
    
    
    1,428
    
    
    
    4,711
    
    
    
    (6,385
    )Capital expenditures
    
    
    23,730
    
    
    
    21,800
    
    
    
    16,764
    
    
    
    15,008
    
    
    
    15,319Interest expense
    
    
    18,159
    
    
    
    17,336
    
    
    
    11,991
    
    
    
    7,117
    
    
    
    7,658Depreciation and
amortization from
continuing operations
    
    
    34,241
    
    
    
    28,753
    
    
    
    23,438
    
    
    
    14,129
    
    
    
    16,830
  2
    
    EBITDA from continuing operations is a measurement not calculated in accordance with
GAAP. We define EBITDA from continuing operations as operating earnings from continuing
operations plus stock option expense and depreciation and amortization (excluding amortization
of debt issuance cost). We do not intend EBITDA from continuing operations to represent cash
flows from continuing operations or any other items calculated in accordance with GAAP, or as
an indicator of Esterlines operating performance. Our definition of EBITDA from continuing
operations may not be comparable with EBITDA from continuing operations as defined by other
companies. We believe EBITDA is commonly used by financial analysts and others in the
aerospace and defense industries and thus provides useful information to investors. Our
management and certain financial creditors use EBITDA as one measure of our leverage capacity
and debt servicing ability, and is shown here with respect to Esterline for comparative
purposes. EBITDA is not necessarily indicative of amounts that may be available for
discretionary uses by us. The following table reconciles operating earnings from continuing
operations to EBITDA from continuing operations.
 30




---



##### 



For Fiscal Years
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002
    
    
    2001Operating earnings
from continuing
operations
    
    $
    82,286
    
    
    $
    50,418
    
    
    $
    49,118
    
    
    $
    42,892
    
    
    $
    71,769Stock option expense
    
    
    2,799
    
    
    
    4,326
    
    
    
    1,428
    
    
    
    4,711
    
    
    
    (6,385
    )Depreciation and
amortization from
continuing
operations
    
    
    34,241
    
    
    
    28,753
    
    
    
    23,438
    
    
    
    14,129
    
    
    
    16,830EBITDA from
continuing
operations
    
    $
    119,326
    
    
    $
    83,497
    
    
    $
    73,984
    
    
    $
    61,732
    
    
    $
    82,214
 31




---



##### 



Consolidated
Statement of Operations
  For Each of the Three Fiscal Yearsin the Period Ended October 28, 2005
    
    2005
    
    
    2004
    
    
    2003Net Sales
    
    $
    835,403
    
    
    $
    613,610
    
    
    $
    549,132Cost of Sales
    
    
    573,453
    
    
    
    418,590
    
    
    
    376,931261,950
    
    
    
    195,020
    
    
    
    172,201ExpensesSelling, general and administrative
    
    
    137,426
    
    
    
    118,746
    
    
    
    105,301Research, development
and engineering
    
    
    42,238
    
    
    
    25,856
    
    
    
    17,782Total Expenses
    
    
    179,664
    
    
    
    144,602
    
    
    
    123,083Operating
Earnings From Continuing Operations
    
    
    82,286
    
    
    
    50,418
    
    
    
    49,118Other (income) expense
    
    
    514
    
    
    
    (509
    )
    
    
    Loss (gain) on sale of product line
    
    
    
    
    
    
    (3,434
    )
    
    
    66Gain on derivative
financial instruments
    
    
    
    
    
    
    
    
    
    
    (2,676
    )Interest income
    
    
    (4,057
    )
    
    
    (1,964
    )
    
    
    (868
    )Interest expense
    
    
    18,159
    
    
    
    17,336
    
    
    
    11,991Other Expense, Net
    
    
    14,616
    
    
    
    11,429
    
    
    
    8,513Income From
Continuing Operations Before Income Taxes
    
    
    67,670
    
    
    
    38,989
    
    
    
    40,605Income Tax Expense
    
    
    16,301
    
    
    
    9,592
    
    
    
    12,458Income From
Continuing Operations Before Minority Interest
    
    
    51,369
    
    
    
    29,397
    
    
    
    28,147Minority Interest

    
    
    (335
    )
    
    
    (22
    )
    
    
    Income From Continuing Operations
    
    
    51,034
    
    
    
    29,375
    
    
    
    28,147Income
(Loss) From Discontinued Operations, Net of Tax
    
    
    6,992
    
    
    
    10,208
    
    
    
    (5,312
    )Net Earnings
    
    $
    58,026
    
    
    $
    39,583
    
    
    $
    22,835
 32




---



##### 



Consolidated
Statement of Operations
  For Each of the Three Fiscal Yearsin the Period Ended October 28, 2005
    
    2005
    
    
    2004
    
    
    2003Earnings
(Loss) Per Share  Basic:Continuing operations
    
    $
    2.05
    
    
    $
    1.39
    
    
    $
    1.35Discontinued operations
    
    
    .28
    
    
    
    .48
    
    
    
    (.26
    )Earnings Per
Share  Basic
    
    $
    2.33
    
    
    $
    1.87
    
    
    $
    1.09Earnings
(Loss) Per Share  Diluted:Continuing operations
    
    $
    2.02
    
    
    $
    1.37
    
    
    $
    1.33Discontinued operations
    
    
    .27
    
    
    
    .47
    
    
    
    (.25
    )Earnings Per
Share  Diluted
    
    $
    2.29
    
    
    $
    1.84
    
    
    $
    1.08
  33




---



##### 



Consolidated
Balance Sheet
  As of October 28, 2005 and October 29, 2004
    
    2005
    
    
    2004AssetsCurrent AssetsCash and cash equivalents
    
    $
    118,304
    
    
    $
    29,479Cash in escrow
    
    
    11,918
    
    
    
    8,511Short-term investments
    
    
    62,656
    
    
    
    Accounts receivable, net of allowances
of $4,462 and $3,687
    
    
    149,751
    
    
    
    132,206Inventories
    
    
    130,469
    
    
    
    119,054Deferred income tax benefits
    
    
    26,868
    
    
    
    23,499Prepaid expenses
    
    
    7,533
    
    
    
    9,441Other current assets
    
    
    
    
    
    
    435Total Current Assets
    
    
    507,499
    
    
    
    322,625Property, Plant and EquipmentLand
    
    
    15,869
    
    
    
    17,341Buildings
    
    
    79,219
    
    
    
    80,998Machinery and equipment
    
    
    187,022
    
    
    
    177,098282,110
    
    
    
    275,437Accumulated depreciation
    
    
    143,896
    
    
    
    130,302138,214
    
    
    
    145,135Other Non-Current AssetsGoodwill
    
    
    261,167
    
    
    
    247,817Intangibles, net
    
    
    166,118
    
    
    
    169,876Debt issuance costs, net of accumulated
amortization of $1,602 and $928
    
    
    5,144
    
    
    
    5,818Deferred income tax benefits
    
    
    13,320
    
    
    
    11,216Other assets
    
    
    23,786
    
    
    
    32,861Total Assets
    
    $
    1,115,248
    
    
    $
    935,348
  34




---



##### 



As of October 28, 2005 and October 29, 2004
    
    2005
    
    
    2004Liabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    41,453
    
    
    $
    37,867Accrued liabilities
    
    
    119,115
    
    
    
    97,038Credit facilities
    
    
    2,031
    
    
    
    6,977Current maturities of long-term debt
    
    
    70,934
    
    
    
    1,031Federal and foreign income taxes
    
    
    8,798
    
    
    
    6,678Total Current Liabilities
    
    
    242,331
    
    
    
    149,591Long-Term LiabilitiesLong-term debt, net of current maturities
    
    
    175,682
    
    
    
    249,056Deferred income taxes
    
    
    46,421
    
    
    
    43,443Other liabilities
    
    
    27,237
    
    
    
    29,852Commitments and Contingencies
    
    
    
    
    
    
    Minority Interest
    
    
    2,713
    
    
    
    2,378Shareholders EquityCommon stock, par value $.20 per share,
authorized 60,000,000 shares, issued and
outstanding 25,319,892 and 21,319,698 shares
    
    
    5,064
    
    
    
    4,264Additional paid-in capital
    
    
    260,095
    
    
    
    144,879Retained earnings
    
    
    345,370
    
    
    
    287,344Accumulated other comprehensive income
    
    
    10,335
    
    
    
    24,541Total Shareholders Equity
    
    
    620,864
    
    
    
    461,028Total Liabilities and Shareholders Equity
    
    $
    1,115,248
    
    
    $
    935,348
  35




---



##### 



Consolidated
Statement of Cash Flows
  For Each of the Three Fiscal Yearsin the Period Ended October 28, 2005
    
    2005
    
    
    2004
    
    
    2003Cash Flows Provided (Used)
by Operating ActivitiesNet earnings
    
    $
    58,026
    
    
    $
    39,583
    
    
    $
    22,835Minority interest
    
    
    335
    
    
    
    22
    
    
    
    Depreciation and amortization
    
    
    35,308
    
    
    
    31,145
    
    
    
    26,215Deferred income tax
    
    
    (4,501
    )
    
    
    3,264
    
    
    
    9,235Stock-based compensation
    
    
    2,799
    
    
    
    4,326
    
    
    
    1,428Loss (gain) on disposal and holding period
loss on discontinued operations
    
    
    
    
    
    
    (12,521
    )
    
    
    9,282Gain on sale of discontinued operations
    
    
    (9,456
    )
    
    
    
    
    
    
    Loss on sale of building
    
    
    59
    
    
    
    
    
    
    
    Gain on sale of land
    
    
    
    
    
    
    (892
    )
    
    
    Loss (gain) on sale of product line
    
    
    
    
    
    
    (3,434
    )
    
    
    66Gain on sale of short-term investments
    
    
    (1,397
    )
    
    
    
    
    
    
    Working capital changes, net of
effect of acquisitionsAccounts receivable
    
    
    (17,645
    )
    
    
    (9,032
    )
    
    
    (9,516
    )Inventories
    
    
    (11,636
    )
    
    
    (9,095
    )
    
    
    6,322Prepaid expenses
    
    
    1,702
    
    
    
    (659
    )
    
    
    117Other current assets
    
    
    435
    
    
    
    
    
    
    
    Accounts payable
    
    
    4,166
    
    
    
    2,600
    
    
    
    (4,396
    )Accrued liabilities
    
    
    19,916
    
    
    
    10,240
    
    
    
    4,926Federal and foreign income taxes
    
    
    5,169
    
    
    
    8,951
    
    
    
    (923
    )Other liabilities
    
    
    (6,414
    )
    
    
    4,359
    
    
    
    Other, net
    
    
    (454
    )
    
    
    (5,530
    )
    
    
    19776,412
    
    
    
    63,327
    
    
    
    65,788Cash Flows Provided (Used)
by Investing ActivitiesPurchases of capital assets
    
    
    (23,776
    )
    
    
    (22,126
    )
    
    
    (17,130
    )Proceeds from sale of discontinued operations
    
    
    21,421
    
    
    
    10,000
    
    
    
    3,850Proceeds from sale of building
    
    
    2,319
    
    
    
    
    
    
    
    Proceeds from sale of product line
    
    
    
    
    
    
    3,475
    
    
    
    5,630Proceeds from sale of land
    
    
    
    
    
    
    1,654
    
    
    
    Escrow deposit
    
    
    (4,207
    )
    
    
    (12,500
    )
    
    
    (1,036
    )Proceeds from sale of capital assets
    
    
    2,312
    
    
    
    778
    
    
    
    766Purchase of short-term investments
    
    
    (173,273
    )
    
    
    
    
    
    
    (12,797
    )Proceeds from sale of short-term investments
    
    
    112,014
    
    
    
    12,797
    
    
    
    Acquisitions of businesses,
net of cash acquired
    
    
    (28,261
    )
    
    
    (138,811
    )
    
    
    (111,735
    )(91,451
    )
    
    
    (144,733
    )
    
    
    (132,452
    )
 36




---



##### 



For Each of the Three Fiscal Yearsin the Period Ended October 28, 2005
    
    2005
    
    
    2004
    
    
    2003Cash Flows Provided (Used)
by Financing ActivitiesProceeds provided by stock issuance
under employee stock plans
    
    
    4,727
    
    
    
    2,807
    
    
    
    2,424Proceeds provided by sale of common stock
    
    
    108,490
    
    
    
    
    
    
    
    Net change in credit facilities
    
    
    (4,829
    )
    
    
    4,122
    
    
    
    2,279Repayment of long-term debt, net
    
    
    (3,302
    )
    
    
    (29,429
    )
    
    
    (732
    )Debt and other issuance costs
    
    
    
    
    
    
    (268
    )
    
    
    (7,735
    )Proceeds from note issuance
    
    
    
    
    
    
    
    
    
    
    175,000105,086
    
    
    
    (22,768
    )
    
    
    171,236Effect of foreign exchange rates on cash
    
    
    (1,222
    )
    
    
    2,290
    
    
    
    4,280Net increase (decrease) in
cash and cash equivalents
    
    
    88,825
    
    
    
    (101,884
    )
    
    
    108,852Cash and
cash equivalents  beginning of year
    
    
    29,479
    
    
    
    131,363
    
    
    
    22,511Cash and
cash equivalents  end of year
    
    $
    118,304
    
    
    $
    29,479
    
    
    $
    131,363Supplemental Cash Flow InformationCash paid for interest
    
    $
    16,610
    
    
    $
    17,394
    
    
    $
    6,945Cash paid (refunded) for taxes
    
    
    14,193
    
    
    
    (1,909
    )
    
    
    (558
    )
  37




---



##### 



Consolidated Statement of Shareholders
Equity and Comprehensive Income
  For Each of the Three Fiscal Yearsin the Period Ended October 28, 2005
    
    2005
    
    
    2004
    
    
    2003Common Stock, Par Value $.20 Per ShareBeginning of year
    
    $
    4,264
    
    
    $
    4,213
    
    
    $
    4,157Shares issued under stock option plans
    
    
    64
    
    
    
    51
    
    
    
    56Shares issued under equity offering
    
    
    736
    
    
    
    
    
    
    
    End of year
    
    
    5,064
    
    
    
    4,264
    
    
    
    4,213Additional Paid-in CapitalBeginning of year
    
    
    144,879
    
    
    
    137,797
    
    
    
    134,001Shares issued under stock option plans
    
    
    4,663
    
    
    
    2,756
    
    
    
    2,368Shares issued under equity offering
    
    
    107,754
    
    
    
    
    
    
    
    Stock-based compensation expense
    
    
    2,799
    
    
    
    4,326
    
    
    
    1,428End of year
    
    
    260,095
    
    
    
    144,879
    
    
    
    137,797Retained EarningsBeginning of year
    
    
    287,344
    
    
    
    247,761
    
    
    
    224,926Net earnings
    
    
    58,026
    
    
    
    39,583
    
    
    
    22,835End of year
    
    
    345,370
    
    
    
    287,344
    
    
    
    247,761Accumulated Other Comprehensive Gain (Loss)Beginning of year
    
    
    24,541
    
    
    
    6,298
    
    
    
    (5,920
    )Change in fair value of derivative
financial instruments, net of tax
    
    
    43
    
    
    
    581
    
    
    
    61Adjustment for supplemental executive
pension liability, net of tax
    
    
    (75
    )
    
    
    (850
    )
    
    
    Foreign currency translation adjustment
    
    
    (14,174
    )
    
    
    18,512
    
    
    
    12,157End of year
    
    
    10,335
    
    
    
    24,541
    
    
    
    6,298Total Shareholders Equity
    
    $
    620,864
    
    
    $
    461,028
    
    
    $
    396,069Comprehensive IncomeNet earnings
    
    $
    58,026
    
    
    $
    39,583
    
    
    $
    22,835Change in fair value of derivative
financial instruments, net of tax
    
    
    43
    
    
    
    581
    
    
    
    61Adjustment for supplemental executive
pension liability, net of tax
    
    
    (75
    )
    
    
    (850
    )
    
    
    Foreign currency translation adjustment
    
    
    (14,174
    )
    
    
    18,512
    
    
    
    12,157Comprehensive Income
    
    $
    43,820
    
    
    $
    57,826
    
    
    $
    35,053
  38




---



##### 



Notes to Consolidated Financial Statements
 Accounting Policies
 Nature of Operations
  Principles of Consolidation and Basis of Presentation
  Management Estimates
  Revenue Recognition
   39




---



##### 



Financial Instruments
 Fair
Value of Financial Instruments
  Foreign Currency Exchange Risk Management
  Interest Rate Risk Management
  40




---



##### 



Foreign Currency Translation
  Cash Equivalents and Cash in Escrow
  Short-term Investments
  Accounts Receivable
  41




---



##### 



Inventories
  Property, Plant and Equipment, and Depreciation
  Debt Issuance Costs
  Long-lived Assets
  Goodwill and Intangibles
   42




---



##### 



Environmental
  Stock-based Compensation
   43




---



##### 



2005
    
    
    2004
    
    
    2003Net earnings as reported
    
    $
    58,026
    
    
    $
    39,583
    
    
    $
    22,835Stock-based compensation cost,
net of income tax included in
net earnings as reported
    
    
    1,862
    
    
    
    2,906
    
    
    
    1,061Stock-based compensation cost,
net of income tax under the fair
value method of accounting
    
    
    (2,504
    )
    
    
    (1,784
    )
    
    
    (1,295
    )Pro forma net earnings
    
    
    57,384
    
    
    
    40,705
    
    
    
    22,601Basic earnings per share as reported
    
    $
    2.33
    
    
    $
    1.87
    
    
    $
    1.09Pro forma basic earnings per share
    
    
    2.30
    
    
    
    1.92
    
    
    
    1.08Diluted earnings per share as reported
    
    $
    2.29
    
    
    $
    1.84
    
    
    $
    1.08Pro forma diluted earnings per share
    
    
    2.26
    
    
    
    1.89
    
    
    
    1.07
  2005
    
    
    2004
    
    
    2003Volatility
    
    
    45.3
    %
    
    
    47.1
    %
    
    
    48.5
    %Risk-free interest rate
    
    
    4.48  4.60
    %
    
    
    3.12  3.84
    %
    
    
    2.88  3.94
    %Expected life (years)
    
    
    69
    
    
    
    58
    
    
    
    58Dividends
    
    
    
    
    
    
    
    
    
    
    
 Product Warranties
  Earnings Per Share
  44




---



##### 



Recent Accounting Pronouncements
       45




---



##### 



Inventory Costs  An Amendment of ARB No. 43, Chapter 4.
 46




---



##### 



Discontinued Operations
   In Thousands
    
    2005
    
    
    2004
    
    
    2003Income (loss) before taxes
    
    $
    (52
    )
    
    $
    3,261
    
    
    $
    789Tax expense (benefit)
    
    
    (13
    )
    
    
    1,067
    
    
    
    293Net income (loss)
    
    
    (39
    )
    
    
    2,194
    
    
    
    496Gain (loss) on disposal,
including tax expense (benefit)
of $2,435, $4,507 and $(3,474)
    
    
    7,031
    
    
    
    8,014
    
    
    
    (5,808
    )Income (loss) from discontinued operations
    
    $
    6,992
    
    
    $
    10,208
    
    
    $
    (5,312
    )
 47




---



##### 



Inventories
  In Thousands
    
    2005
    
    
    2004Raw materials and purchased parts
    
    $
    64,377
    
    
    $
    58,736Work in process
    
    
    45,798
    
    
    
    43,326Finished goods
    
    
    20,294
    
    
    
    16,992$
    130,469
    
    
    $
    119,054
 48




---



##### 



Goodwill
  Avionics &
    
    
    Sensors &
    
    
    AdvancedIn Thousands
    
    Controls
    
    
    Systems
    
    
    Materials
    
    
    TotalBalance, October 31, 2003
    
    $
    57,608
    
    
    $
    44,380
    
    
    $
    83,365
    
    
    $
    185,353Goodwill from acquisitions
    
    
    20,505
    
    
    
    38,997
    
    
    
    100
    
    
    
    59,602Foreign currency translation adjustment
    
    
    
    
    
    
    2,862
    
    
    
    
    
    
    
    2,862Balance, October 29, 2004
    
    $
    78,113
    
    
    $
    86,239
    
    
    $
    83,465
    
    
    $
    247,817Goodwill from acquisitions
    
    
    20,180
    
    
    
    3,611
    
    
    
    
    
    
    
    23,791Sale of business
    
    
    
    
    
    
    (7,070
    )
    
    
    
    
    
    
    (7,070
    )Foreign currency translation adjustment
    
    
    (1,169
    )
    
    
    (2,202
    )
    
    
    
    
    
    
    (3,371
    )Balance, October 28, 2005
    
    $
    97,124
    
    
    $
    80,578
    
    
    $
    83,465
    
    
    $
    261,167
 49




---



##### 



Intangible Assets
  2005
    
    
    2004Weighted
    
    
    Gross
    
    
    
    
    
    
    GrossAverage Years
    
    
    Carrying
    
    
    Accum.
    
    
    Carrying
    
    
    Accum.In Thousands
    
    Useful Life
    
    
    Amount
    
    
    Amort.
    
    
    Amount
    
    
    Amort.Amortized Intangible AssetsPrograms
    
    
    18
    
    
    $
    140,460
    
    
    $
    20,307
    
    
    $
    134,657
    
    
    $
    12,698Core technology
    
    
    16
    
    
    
    8,976
    
    
    
    2,105
    
    
    
    8,979
    
    
    
    1,465Patents and other
    
    
    13
    
    
    
    37,329
    
    
    
    20,135
    
    
    
    35,488
    
    
    
    17,611Total
    
    
    
    
    
    $
    186,765
    
    
    $
    42,547
    
    
    $
    179,124
    
    
    $
    31,774Indefinite-lived Intangible AssetsTrademark
    
    
    
    
    
    $
    21,900
    
    
    
    
    
    
    $
    22,526
   
 2006
    
    $
    10,5932007
    
    
    10,4702008
    
    
    10,2262009
    
    
    9,5462010
    
    
    8,952
 50




---



##### 



Accrued Liabilities
  In Thousands
    
    2005
    
    
    2004Payroll and other compensation
    
    $
    47,781
    
    
    $
    39,316Casualty and medical
    
    
    13,022
    
    
    
    11,940Interest
    
    
    6,962
    
    
    
    6,338Warranties
    
    
    8,811
    
    
    
    6,633State and other tax accruals
    
    
    13,537
    
    
    
    9,001Acquisition related payments
    
    
    7,895
    
    
    
    8,510Customer deposits
    
    
    6,203
    
    
    
    Other
    
    
    14,904
    
    
    
    15,300$
    119,115
    
    
    $
    97,038
 NOTE 7: Other
LiabilitiesOther liabilities at the end of fiscal 2005 and 2004 consisted of the following:
 In Thousands
    
    2005
    
    
    2004Pension obligation
    
    $
    22,994
    
    
    $
    24,852Acquisition related payments
    
    
    4,243
    
    
    
    5,000$
    27,237
    
    
    $
    29,852
 51




---



##### 



Retirement Benefits
     2005
    
    2004Principal assumptions as of fiscal year end:Discount Rate
    
    
    5.5
    %
    
    
    6.0
    %Rate of increase in future compensation levels
    
    
    4.5
    %
    
    
    4.5
    %Assumed long-term rate of return on plan assets
    
    
    8.5
    %
    
    
    8.5
    %
  52




---



##### 



ActualPlan assets allocation as of fiscal year end:
    
    Target
    
    
    2005
    
    
    2004Equity securities
    
    
    6575
    %
    
    
    65.4
    %
    
    
    67.4
    %Debt securities
    
    
    2535
    %
    
    
    32.2
    %
    
    
    32.6
    %Cash
    
    
    0
    %
    
    
    2.4
    %
    
    
    Total
    
    
    
    
    
    
    100.0
    %
    
    
    100.0
    %
  In Thousands
    
    2005
    
    
    2004
    
    
    2003Components of Net Periodic CostService cost
    
    $
    3,537
    
    
    $
    3,838
    
    
    $
    3,524Interest cost
    
    
    10,055
    
    
    
    7,618
    
    
    
    7,088Expected return on plan assets
    
    
    (11,851
    )
    
    
    (9,766
    )
    
    
    (8,416
    )Amortization of transition asset
    
    
    
    
    
    
    
    
    
    
    77Amortization of prior service cost
    
    
    18
    
    
    
    19
    
    
    
    18Amortization of actuarial loss
    
    
    1,260
    
    
    
    468
    
    
    
    1,596Net periodic cost
    
    $
    3,019
    
    
    $
    2,177
    
    
    $
    3,887
 53




---



##### 



In Thousands
    
    2005
    
    
    2004Benefit ObligationBeginning balance
    
    $
    166,328
    
    
    $
    114,196Currency translation adjustment
    
    
    (325
    )
    
    
    Service cost
    
    
    3,537
    
    
    
    3,838Interest cost
    
    
    10,055
    
    
    
    7,620Actuarial loss
    
    
    19,412
    
    
    
    7,300Acquisitions
    
    
    1,127
    
    
    
    40,542Benefits paid
    
    
    (9,805
    )
    
    
    (7,168
    )Ending balance
    
    $
    190,329
    
    
    $
    166,328Plan
Assets  Fair ValueBeginning balance
    
    $
    142,311
    
    
    $
    115,202Actual gain on plan assets
    
    
    17,357
    
    
    
    14,577Acquisitions
    
    
    976
    
    
    
    19,141Company contributions
    
    
    5,232
    
    
    
    559Benefits paid
    
    
    (10,412
    )
    
    
    (7,168
    )Ending balance
    
    $
    155,464
    
    
    $
    142,311Reconciliation of Funded Status to Net Amount RecognizedFunded
status  plan assets relative to benefit obligation
    
    $
    (34,865
    )
    
    $
    (24,017
    )Unrecognized net actuarial loss
    
    
    31,119
    
    
    
    17,910Unrecognized prior service benefit
    
    
    (31
    )
    
    
    (12
    )Unrecognized net loss
    
    
    27
    
    
    
    (31
    )Net amount recognized
    
    $
    (3,750
    )
    
    $
    (6,150
    )Amount Recognized in the Consolidated Balance SheetPrepaid benefit cost
    
    $
    16,129
    
    
    $
    17,647Accrued benefit liability
    
    
    (21,461
    )
    
    
    (25,277
    )Additional minimum liability
    
    
    (5,872
    )
    
    
    Intangible assets
    
    
    107
    
    
    
    141Accumulated other comprehensive income
    
    
    7,347
    
    
    
    1,339Net amount recognized
    
    $
    (3,750
    )
    
    $
    (6,150
    )
  54




---



##### 



In Thousands2006
    
    $
    10,7332007
    
    
    11,1322008
    
    
    11,6482009
    
    
    12,0992010
    
    
    12,4412011  2015
    
    
    68,005
  55




---



##### 



Income Taxes
  In Thousands
    
    2005
    
    
    2004
    
    
    2003CurrentU.S. Federal
    
    $
    13,726
    
    
    $
    7,835
    
    
    $
    10,063State
    
    
    2,657
    
    
    
    1,000
    
    
    
    600Foreign
    
    
    4,419
    
    
    
    284
    
    
    
    2,23020,802
    
    
    
    9,119
    
    
    
    12,893DeferredU.S. Federal
    
    
    (1,656
    )
    
    
    3,705
    
    
    
    (1,435
    )State
    
    
    (1,104
    )
    
    
    847
    
    
    
    (180
    )Foreign
    
    
    (1,741
    )
    
    
    (4,079
    )
    
    
    1,180(4,501
    )
    
    
    473
    
    
    
    (435
    )Income tax expense
    
    $
    16,301
    
    
    $
    9,592
    
    
    $
    12,458
  In Thousands
    
    2005
    
    
    2004
    
    
    2003U.S.
    
    $
    40,162
    
    
    $
    32,705
    
    
    $
    33,896Foreign
    
    
    27,508
    
    
    
    6,284
    
    
    
    6,709Income from continuing operations,
before income taxes
    
    $
    67,670
    
    
    $
    38,989
    
    
    $
    40,605
  In Thousands
    
    2005
    
    
    2004Reserves and liabilities
    
    $
    18,320
    
    
    $
    12,667NOL carryforwards
    
    
    11,343
    
    
    
    13,677Tax credit carryforwards
    
    
    2,274
    
    
    
    2,116Employee benefits
    
    
    5,689
    
    
    
    3,740Non-qualified stock options
    
    
    2,066
    
    
    
    2,515Other
    
    
    496
    
    
    
    1,158Total deferred tax assets
    
    
    40,188
    
    
    
    35,873Depreciation and amortization
    
    
    (17,083
    )
    
    
    (14,851
    )Intangibles and amortization
    
    
    (29,338
    )
    
    
    (25,310
    )Retirement benefits
    
    
    
    
    
    
    (4,440
    )Other
    
    
    
    
    
    
    Total deferred tax liabilities
    
    
    (46,421
    )
    
    
    (44,601
    )Net deferred tax liabilities
    
    $
    (6,233
    )
    
    $
    (8,728
    )
 56




---



##### 



2005
    
    
    2004
    
    
    2003U.S. statutory income tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State income taxes
    
    
    1.5
    
    
    
    1.7
    
    
    
    1.0Foreign taxes
    
    
    (6.6
    )
    
    
    (5.8
    )
    
    
    (0.7
    )Export sales benefit
    
    
    (1.2
    )
    
    
    (1.7
    )
    
    
    (2.0
    )Pass-through entities
    
    
    0.9
    
    
    
    6.8
    
    
    
    Foreign tax credits
    
    
    
    
    
    
    (5.6
    )
    
    
    Research & development credits
    
    
    (3.8
    )
    
    
    (4.4
    )
    
    
    (5.1
    )Tax accrual adjustment
    
    
    (2.5
    )
    
    
    (1.8
    )
    
    
    2.0Other, net
    
    
    0.8
    
    
    
    0.4
    
    
    
    0.5Effective income tax rate
    
    
    24.1
    %
    
    
    24.6
    %
    
    
    30.7
    %
  57




---



##### 



58




---



##### 



Debt
  In Thousands
    
    2005
    
    
    20047.75% Senior Subordinated Notes, due June 2013
    
    $
    175,000
    
    
    $
    175,0006.77% Senior Notes, due November 2008
    
    
    40,000
    
    
    
    40,0006.40% Senior Notes, due November 2005
    
    
    30,000
    
    
    
    30,000Other
    
    
    2,628
    
    
    
    3,318247,628
    
    
    
    248,318Fair value of interest rate swap agreement
    
    
    (1,012
    )
    
    
    1,769Less current maturities
    
    
    70,934
    
    
    
    1,031Carrying amount of long-term debt
    
    $
    175,682
    
    
    $
    249,056
   59




---



##### 



In ThousandsFiscal Year2006
    
    $
    70,9342007
    
    
    7632008
    
    
    4642009
    
    
    3902010
    
    
    222011 and thereafter
    
    
    175,055$
    247,628
  2005
    
    
    2004Outstanding
    
    
    Interest
    
    
    Outstanding
    
    
    InterestIn Thousands
    
    Borrowings
    
    
    Rate
    
    
    Borrowings
    
    
    RateU.S.
    
    $
    
    
    
    
    
    
    
    $
    5,000
    
    
    
    3.46
    %Foreign
    
    
    2,031
    
    
    
    2.76
    %
    
    
    1,977
    
    
    
    2.72
    %$
    2,031
    
    
    
    
    
    
    $
    6,977
   60




---



##### 



61




---



##### 



Commitments and Contingencies
   In ThousandsFiscal Year2006
    
    $
    9,2572007
    
    
    8,8092008
    
    
    7,4882009
    
    
    7,2912010
    
    
    6,8952011 and thereafter
    
    
    17,572$
    57,312
   62




---



##### 



Employee Stock Plans
      2005
    
    
    2004
    
    
    2003Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedShares
    
    
    Average
    
    
    Shares
    
    
    Average
    
    
    Shares
    
    
    AverageSubject to
    
    
    Exercise
    
    
    Subject to
    
    
    Exercise
    
    
    Subject to
    
    
    ExerciseOption
    
    
    Price
    
    
    Option
    
    
    Price
    
    
    Option
    
    
    PriceOutstanding,
beginning of year
    
    
    1,438,000
    
    
    $
    18.34
    
    
    
    1,497,750
    
    
    $
    16.25
    
    
    
    1,618,125
    
    
    $
    14.85Granted
    
    
    347,400
    
    
    
    36.36
    
    
    
    229,000
    
    
    
    25.09
    
    
    
    245,000
    
    
    
    18.68Exercised
    
    
    (340,050
    )
    
    
    14.93
    
    
    
    (278,250
    )
    
    
    12.53
    
    
    
    (264,000
    )
    
    
    8.83Cancelled
    
    
    (44,250
    )
    
    
    20.65
    
    
    
    (10,500
    )
    
    
    21.99
    
    
    
    (101,375
    )
    
    
    19.05Outstanding,
end of year
    
    
    1,401,100
    
    
    $
    23.56
    
    
    
    1,438,000
    
    
    $
    18.34
    
    
    
    1,497,750
    
    
    $
    16.25Exercisable,
end of year
    
    
    738,200
    
    
    $
    18.32
    
    
    
    877,750
    
    
    $
    16.39
    
    
    
    942,375
    
    
    $
    14.94
 63




---



##### 



Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRange of
    
    
    
    
    
    
    Remaining
    
    
    Average
    
    
    
    
    
    
    AverageExercise Prices
    
    
    Shares
    
    
    Life (years)
    
    
    Price
    
    
    Shares
    
    
    Price$
    
    
    11.38  15.82
    
    
    
    316,000
    
    
    
    4.47
    
    
    $
    13.79
    
    
    
    284,000
    
    
    $
    13.5617.90  19.65
    
    
    
    293,200
    
    
    
    6.25
    
    
    
    18.73
    
    
    
    180,200
    
    
    
    18.7619.88  23.85
    
    
    
    301,500
    
    
    
    5.83
    
    
    
    22.28
    
    
    
    204,500
    
    
    
    21.6026.24  34.30
    
    
    
    303,000
    
    
    
    8.38
    
    
    
    30.32
    
    
    
    69,500
    
    
    
    26.9734.38  38.90
    
    
    
    187,400
    
    
    
    9.59
    
    
    
    38.74
    
    
    
    
    
    
    
    
 64




---



##### 



Capital Stock
     65




---



##### 



Acquisitions and Divestitures
 Acquisitions
   In ThousandsAs of June 3, 2005Current Assets
    
    $
    8,079Property, plant and equipment
    
    
    2,151Intangible assets subject to amortizationPrograms (16 year weighted average useful life)
    
    
    9,001Patents (15 year weighted average useful life)
    
    
    2,082Other (3 year useful life)
    
    
    511,088Deferred income tax benefits
    
    
    1,526Goodwill
    
    
    17,166Total assets acquired
    
    
    40,010Current liabilities assumed
    
    
    6,571Deferred tax liabilities
    
    
    4,317Net assets acquired
    
    $
    29,122
  66




---



##### 



In ThousandsAs of August 27, 2004Current Assets
    
    $
    50,977Property, plant and equipment
    
    
    24,380Intangible assets subject to amortizationPrograms (20 year weighted average useful life)
    
    
    30,117Patents (15 year weighted average useful life)
    
    
    2,235Leasehold interest (64 year remaining term of lease)
    
    
    4,300Other (10 year useful life)
    
    
    4,72141,373Trade names (not subject to amortization)
    
    
    13,720Deferred income tax benefits
    
    
    14,123Goodwill
    
    
    56,441Other assets
    
    
    4,259Total assets acquired
    
    
    205,273Current liabilities assumed
    
    
    20,631Long-term debt
    
    
    2,192Pension and other liabilities
    
    
    20,144Deferred tax liabilities
    
    
    12,511Minority interest
    
    
    2,356Net assets acquired
    
    $
    147,439
  67




---



##### 



68




---



##### 



In ThousandsAs of June 11, 2003Current Assets
    
    $
    16,838Property, plant and equipment
    
    
    13,020Intangible assets subject to amortizationPrograms (20 year weighted average useful life)
    
    
    42,677Patents (15 year weighted average useful life)
    
    
    2,799Other (10 year useful life)
    
    
    1,42846,904Trade names (not subject to amortization)
    
    
    7,191Goodwill
    
    
    22,919Other assets
    
    
    487Total assets acquired
    
    
    107,359Current liabilities assumed
    
    
    7,840Deferred tax liabilities
    
    
    4,934Net assets acquired
    
    $
    94,585
     69




---



##### 



Divestitures
  70




---



##### 



Business Segment Information
   71




---



##### 



In Thousands
    
    2005
    
    
    2004
    
    
    2003SalesAvionics & Controls
    
    $
    261,550
    
    
    $
    209,498
    
    
    $
    198,249Sensors & Systems
    
    
    319,539
    
    
    
    180,768
    
    
    
    134,228Advanced Materials
    
    
    254,314
    
    
    
    223,344
    
    
    
    216,655$
    835,403
    
    
    $
    613,610
    
    
    $
    549,132Income From Continuing OperationsAvionics & Controls
    
    $
    37,325
    
    
    $
    32,077
    
    
    $
    29,507Sensors & Systems
    
    
    34,482
    
    
    
    7,809
    
    
    
    8,293Advanced Materials
    
    
    33,992
    
    
    
    28,004
    
    
    
    28,671Segment Earnings
    
    
    105,799
    
    
    
    67,890
    
    
    
    66,471Corporate expense
    
    
    (23,513
    )
    
    
    (17,472
    )
    
    
    (17,353
    )Other income (expense)
    
    
    (514
    )
    
    
    509
    
    
    
    Gain (loss) on sale of product line
    
    
    
    
    
    
    3,434
    
    
    
    (66
    )Loss on derivative financial instruments
    
    
    
    
    
    
    
    
    
    
    2,676Interest income
    
    
    4,057
    
    
    
    1,964
    
    
    
    868Interest expense
    
    
    (18,159
    )
    
    
    (17,336
    )
    
    
    (11,991
    )$
    67,670
    
    
    $
    38,989
    
    
    $
    40,605Identifiable AssetsAvionics & Controls
    
    
    245,016
    
    
    $
    198,142
    
    
    $
    144,492Sensors & Systems
    
    
    398,801
    
    
    
    374,123
    
    
    
    219,247Advanced Materials
    
    
    266,327
    
    
    
    267,811
    
    
    
    262,001Other
    
    
    
    
    
    
    2
    
    
    
    2Discontinued operations
    
    
    
    
    
    
    
    
    
    
    Corporate1
    
    
    205,104
    
    
    
    95,270
    
    
    
    177,085$
    1,115,248
    
    
    $
    935,348
    
    
    $
    802,827Capital ExpendituresAvionics & Controls
    
    $
    3,538
    
    
    $
    6,483
    
    
    $
    2,744Sensors & Systems
    
    
    11,155
    
    
    
    3,335
    
    
    
    2,927Advanced Materials
    
    
    8,283
    
    
    
    11,492
    
    
    
    8,857Other
    
    
    
    
    
    
    
    
    
    
    Discontinued operations
    
    
    46
    
    
    
    326
    
    
    
    366Corporate
    
    
    754
    
    
    
    490
    
    
    
    2,236$
    23,776
    
    
    $
    22,126
    
    
    $
    17,130
 72




---



##### 



In Thousands
    
    2005
    
    
    2004
    
    
    2003Depreciation and AmortizationAvionics & Controls
    
    $
    6,972
    
    
    $
    5,525
    
    
    $
    4,964Sensors & Systems
    
    
    14,311
    
    
    
    10,337
    
    
    
    5,794Advanced Materials
    
    
    12,469
    
    
    
    12,394
    
    
    
    11,982Other
    
    
    
    
    
    
    
    
    
    
    Discontinued Operations
    
    
    141
    
    
    
    1,452
    
    
    
    2,444Corporate
    
    
    1,415
    
    
    
    1,437
    
    
    
    1,031$
    35,308
    
    
    $
    31,145
    
    
    $
    26,215
 
 1
    
    Primarily cash, prepaid pension expense (see Note 8) and deferred tax assets (see Note 9).  In Thousands
    
    2005
    
    
    2004
    
    
    2003SalesDomesticUnaffiliated
customers  U.S.
    
    $
    489,644
    
    
    $
    369,424
    
    
    $
    364,832Unaffiliated
customers  export
    
    
    95,370
    
    
    
    88,567
    
    
    
    61,870Intercompany
    
    
    10,179
    
    
    
    2,769
    
    
    
    1,085595,193
    
    
    
    460,760
    
    
    
    427,787FranceUnaffiliated customers
    
    
    108,236
    
    
    
    58,788
    
    
    
    54,857Intercompany
    
    
    13,528
    
    
    
    5,050
    
    
    
    3,182121,764
    
    
    
    63,838
    
    
    
    58,039United KingdomUnaffiliated customers
    
    
    108,901
    
    
    
    90,531
    
    
    
    61,998Intercompany
    
    
    3,021
    
    
    
    2,406
    
    
    
    65111,922
    
    
    
    92,937
    
    
    
    62,063All Other ForeignUnaffiliated customers
    
    
    33,252
    
    
    
    6,300
    
    
    
    5,575Intercompany
    
    
    2,850
    
    
    
    938
    
    
    
    1,28036,102
    
    
    
    7,238
    
    
    
    6,855Eliminations
    
    
    (29,578
    )
    
    
    (11,163
    )
    
    
    (5,612
    )$
    835,403
    
    
    $
    613,610
    
    
    $
    549,132
 73




---



##### 



In Thousands
    
    2005
    
    
    2004
    
    
    2003Segment Earnings1Domestic
    
    $
    79,555
    
    
    $
    62,743
    
    
    $
    59,769France
    
    
    14,987
    
    
    
    227
    
    
    
    4,539United Kingdom
    
    
    7,975
    
    
    
    4,746
    
    
    
    2,861All other foreign
    
    
    3,282
    
    
    
    174
    
    
    
    (698
    )$
    105,799
    
    
    $
    67,890
    
    
    $
    66,471Identifiable Assets2Domestic
    
    $
    569,000
    
    
    $
    432,365
    
    
    $
    448,780France
    
    
    140,049
    
    
    
    197,431
    
    
    
    42,828United Kingdom
    
    
    190,090
    
    
    
    202,411
    
    
    
    133,309All other foreign
    
    
    11,005
    
    
    
    7,871
    
    
    
    825$
    910,144
    
    
    $
    840,078
    
    
    $
    625,742
 1
    
    Before corporate expense, shown on page 72.2
    
    Excludes corporate, shown on page 72.   2005
    
    2004
    
    2003Elastomeric products
    
    
    14
    %
    
    
    16
    %
    
    
    18
    %Sensors
    
    
    16
    %
    
    
    19
    %
    
    
    17
    %Aerospace switches and indicators
    
    
    12
    %
    
    
    13
    %
    
    
    16
    %Combustible ordnance components
    
    
    6
    %
    
    
    8
    %
    
    
    10
    %
 74




---



##### 



Quarterly Financial Data (Unaudited)
  In Thousands, Except Per Share AmountsFiscal Year 2005
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstNet sales
    
    $
    224,146
    
    
    $
    209,873
    
    
    $
    211,592
    
    
    $
    189,792Gross margin
    
    
    69,619
    
    
    
    65,693
    
    
    
    68,538
    
    
    
    58,100Income from continuing operations 1
    
    
    15,366
    
    
    
    11,859
    2
    
    
    13,726
    
    
    
    10,083Income from discontinued operations,
net of tax
    
    
    24
    
    
    
    3
    
    
    
    (562
    )
    
    
    7,527Net earnings
    
    $
    15,390
    
    
    $
    11,862
    2
    
    $
    13,164
    
    
    $
    17,610Earnings per share  basicContinuing operations
    
    $
    .61
    
    
    $
    .47
    
    
    $
    .55
    
    
    $
    .42Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (.03
    )
    
    
    .31Earnings per share  basic
    
    $
    .61
    
    
    $
    .47
    
    
    $
    .52
    
    
    $
    .73Earnings per share  dilutedContinuing operations 3
    
    $
    .60
    
    
    $
    .46
    
    
    $
    .54
    
    
    $
    .41Discontinued operations 3
    
    
    
    
    
    
    
    
    
    
    (.02
    )
    
    
    .31Earnings per share  diluted
    
    $
    .60
    
    
    $
    .46
    
    
    $
    .52
    
    
    $
    .72
 75




---



##### 



In Thousands, Except Per Share AmountsFiscal Year 2004
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstNet sales
    
    $
    190,346
    
    
    $
    147,424
    
    
    $
    146,474
    
    
    $
    129,366Gross margin
    
    
    61,982
    
    
    
    45,862
    
    
    
    48,584
    
    
    
    38,592Income from continuing operations 1
    
    
    14,381
    5
    
    
    5,336
    
    
    
    9,426
    
    
    
    232
    4Income from discontinued operations,
net of tax
    
    
    8,498
    
    
    
    576
    
    
    
    960
    
    
    
    174Net earnings
    
    $
    22,879
    5
    
    $
    5,912
    
    
    $
    10,386
    
    
    $
    406
    4Earnings per share  basicContinuing operations
    
    $
    .67
    
    
    $
    .25
    
    
    $
    .45
    
    
    $
    .01Discontinued operations 3
    
    
    .40
    
    
    
    .03
    
    
    
    .04
    
    
    
    .01Earnings per share  basic 3
    
    $
    1.07
    
    
    $
    .28
    
    
    $
    .49
    
    
    $
    .02Earnings per share  dilutedContinuing operations 3
    
    $
    .66
    
    
    $
    .25
    
    
    $
    .44
    
    
    $
    .01Discontinued operations 3
    
    
    .39
    
    
    
    .02
    
    
    
    .04
    
    
    
    .01Earnings per share  diluted 3
    
    $
    1.05
    
    
    $
    .27
    
    
    $
    .48
    
    
    $
    .02
 1
    
    The effects of stock options expense, net of tax, are included in income from continuing operations and presented below: Fourth
    
    
    Third
    
    
    Second
    
    
    FirstFiscal Year 2005
    
    $
    881
    
    
    $
    (2,308
    )
    
    $
    (941
    )
    
    $
    442Fiscal Year 2004
    
    $
    (237
    )
    
    $
    (1,737
    )
    
    $
    474
    
    
    $
    (1,472
    )
 2
    
    Included a $2.0 million reduction of previously estimated tax liabilities due to
the expiration of the statute of limitations and adjustments resulting from a reconciliation
of U.S. and non-U.S. tax returns to the provision for income taxes.3
    
    The sum of the quarterly per share amounts may not equal per share amounts reported
for year-to-date periods. This is due to changes in the number of weighted average shares
outstanding and the effects of rounding for each period.4
    
    Included $4.5 million in legal, severance and early retirement expense in the
Sensors & Systems segment. Included a $1.9 million reduction of previously estimated tax
liabilities associated with the receipt of a NOPA from the Internal Revenue Service.5
    
    Included a $3.4 million gain on the sale of a product line in the Sensors & Systems segment. 76




---



##### 



Guarantors
  77




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent AssetsCash and cash equivalents
    
    $
    75,364
    
    
    $
    2,154
    
    
    $
    40,786
    
    
    $
    
    
    
    $
    118,304Cash in escrow
    
    
    11,918
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,918Short-term investments
    
    
    62,656
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,656Accounts receivable, net
    
    
    671
    
    
    
    96,931
    
    
    
    52,149
    
    
    
    
    
    
    
    149,751Inventories
    
    
    
    
    
    
    84,351
    
    
    
    46,118
    
    
    
    
    
    
    
    130,469Deferred income tax benefits
    
    
    25,115
    
    
    
    102
    
    
    
    1,651
    
    
    
    
    
    
    
    26,868Prepaid expenses
    
    
    179
    
    
    
    4,481
    
    
    
    2,873
    
    
    
    
    
    
    
    7,533Other current assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Current Assets
    
    
    175,903
    
    
    
    188,019
    
    
    
    143,577
    
    
    
    
    
    
    
    507,499Property, Plant & Equipment, Net
    
    
    2,687
    
    
    
    95,001
    
    
    
    40,526
    
    
    
    
    
    
    
    138,214Goodwill
    
    
    
    
    
    
    191,919
    
    
    
    69,248
    
    
    
    
    
    
    
    261,167Intangibles, Net
    
    
    107
    
    
    
    82,196
    
    
    
    83,815
    
    
    
    
    
    
    
    166,118Debt Issuance Costs, Net
    
    
    5,144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,144Deferred Income Tax Benefits
    
    
    11,257
    
    
    
    
    
    
    
    2,063
    
    
    
    
    
    
    
    13,320Other Assets
    
    
    2,638
    
    
    
    16,266
    
    
    
    4,882
    
    
    
    
    
    
    
    23,786Amounts Due To (From)
Subsidiaries
    
    
    134,964
    
    
    
    64,835
    
    
    
    
    
    
    
    (199,799
    )
    
    
    Investment in Subsidiaries
    
    
    615,599
    
    
    
    129
    
    
    
    (128
    )
    
    
    (615,600
    )
    
    
    Total Assets
    
    $
    948,299
    
    
    $
    638,365
    
    
    $
    343,983
    
    
    $
    (815,399
    )
    
    $
    1,115,248
 78




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalLiabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    990
    
    
    $
    19,877
    
    
    $
    20,586
    
    
    $
    
    
    
    $
    41,453Accrued liabilities
    
    
    38,620
    
    
    
    53,246
    
    
    
    27,249
    
    
    
    
    
    
    
    119,115Credit facilities
    
    
    
    
    
    
    
    
    
    
    2,031
    
    
    
    
    
    
    
    2,031Current maturities of
long-term debt
    
    
    70,000
    
    
    
    
    
    
    
    934
    
    
    
    
    
    
    
    70,934Federal and foreign
income taxes
    
    
    3,634
    
    
    
    76
    
    
    
    5,088
    
    
    
    
    
    
    
    8,798Total Current Liabilities
    
    
    113,244
    
    
    
    73,199
    
    
    
    55,888
    
    
    
    
    
    
    
    242,331Long-Term Debt, Net
    
    
    173,988
    
    
    
    
    
    
    
    1,694
    
    
    
    
    
    
    
    175,682Deferred Income Taxes
    
    
    30,880
    
    
    
    (10
    )
    
    
    15,551
    
    
    
    
    
    
    
    46,421Other Liabilities
    
    
    9,323
    
    
    
    11,209
    
    
    
    6,705
    
    
    
    
    
    
    
    27,237Amounts Due To (From)
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    195,829
    
    
    
    (195,829
    )
    
    
    Minority Interest
    
    
    
    
    
    
    
    
    
    
    2,713
    
    
    
    
    
    
    
    2,713Shareholders Equity
    
    
    620,864
    
    
    
    553,967
    
    
    
    65,603
    
    
    
    (619,570
    )
    
    
    620,864Total Liabilities and
Shareholders Equity
    
    $
    948,299
    
    
    $
    638,365
    
    
    $
    343,983
    
    
    $
    (815,399
    )
    
    $
    1,115,248
 79




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalNet Sales
    
    $
    
    
    
    $
    574,864
    
    
    $
    278,767
    
    
    $
    (18,228
    )
    
    $
    835,403Cost of Sales
    
    
    
    
    
    
    403,823
    
    
    
    187,858
    
    
    
    (18,228
    )
    
    
    573,453
    
    
    
    171,041
    
    
    
    90,909
    
    
    
    
    
    
    
    261,950ExpensesSelling, general
and administrative
    
    
    
    
    
    
    90,892
    
    
    
    46,534
    
    
    
    
    
    
    
    137,426Research, development
and engineering
    
    
    
    
    
    
    17,399
    
    
    
    24,839
    
    
    
    
    
    
    
    42,238Total Expenses
    
    
    
    
    
    
    108,291
    
    
    
    71,373
    
    
    
    
    
    
    
    179,664Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    62,750
    
    
    
    19,536
    
    
    
    
    
    
    
    82,286Interest income
    
    
    (15,940
    )
    
    
    (3,015
    )
    
    
    (2,679
    )
    
    
    17,577
    
    
    
    (4,057
    )Interest expense
    
    
    18,261
    
    
    
    4,642
    
    
    
    12,833
    
    
    
    (17,577
    )
    
    
    18,159Other expense (income)
    
    
    50
    
    
    
    86
    
    
    
    378
    
    
    
    
    
    
    
    514Other Expense, Net
    
    
    2,371
    
    
    
    1,713
    
    
    
    10,532
    
    
    
    
    
    
    
    14,616Income (Loss) from Continuing
Operations Before Taxes
    
    
    (2,371
    )
    
    
    61,037
    
    
    
    9,004
    
    
    
    
    
    
    
    67,670Income Tax Expense (Benefit)
    
    
    (728
    )
    
    
    14,409
    
    
    
    2,620
    
    
    
    
    
    
    
    16,301Income (Loss) From
Continuing Operations
Before Minority Interest
    
    
    (1,643
    )
    
    
    46,628
    
    
    
    6,384
    
    
    
    
    
    
    
    51,369Minority Interest
    
    
    
    
    
    
    
    
    
    
    (335
    )
    
    
    
    
    
    
    (335
    )Income (Loss) From
Continuing Operations
    
    
    (1,643
    )
    
    
    46,628
    
    
    
    6,049
    
    
    
    
    
    
    
    51,034Income From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    6,992
    
    
    
    
    
    
    
    
    
    
    
    6,992Equity in Net Income of
Consolidated Subsidiaries
    
    
    59,669
    
    
    
    
    
    
    
    
    
    
    
    (59,669
    )
    
    
    Net Income (Loss)
    
    $
    58,026
    
    
    $
    53,620
    
    
    $
    6,049
    
    
    $
    (59,669
    )
    
    $
    58,026
 80




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Operating ActivitiesNet earnings (loss)
    
    $
    58,026
    
    
    $
    53,620
    
    
    $
    6,049
    
    
    $
    (59,669
    )
    
    $
    58,026Minority interest
    
    
    
    
    
    
    
    
    
    
    335
    
    
    
    
    
    
    
    335Depreciation & amortization
    
    
    
    
    
    
    22,152
    
    
    
    13,156
    
    
    
    
    
    
    
    35,308Deferred income tax
    
    
    3,205
    
    
    
    (112
    )
    
    
    (7,594
    )
    
    
    
    
    
    
    (4,501
    )Stock compensation expense
    
    
    
    
    
    
    2,262
    
    
    
    537
    
    
    
    
    
    
    
    2,799Gain on disposal of
discontinued operations
    
    
    
    
    
    
    (9,456
    )
    
    
    
    
    
    
    
    
    
    
    (9,456
    )Loss on sale of building
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59Gain on sale of short-term
investments
    
    
    (1,397
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,397
    )Working capital changes, net of
effect of acquisitionsAccounts receivable
    
    
    1,550
    
    
    
    (11,458
    )
    
    
    (7,737
    )
    
    
    
    
    
    
    (17,645
    )Inventories
    
    
    
    
    
    
    (6,350
    )
    
    
    (5,286
    )
    
    
    
    
    
    
    (11,636
    )Prepaid expenses
    
    
    174
    
    
    
    (903
    )
    
    
    2,431
    
    
    
    
    
    
    
    1,702Other current assets
    
    
    147
    
    
    
    288
    
    
    
    
    
    
    
    
    
    
    
    435Accounts payable
    
    
    470
    
    
    
    2,638
    
    
    
    1,058
    
    
    
    
    
    
    
    4,166Accrued liabilities
    
    
    9,540
    
    
    
    7,401
    
    
    
    2,975
    
    
    
    
    
    
    
    19,916Federal & foreign income taxes
    
    
    638
    
    
    
    1
    
    
    
    4,530
    
    
    
    
    
    
    
    5,169Other liabilities
    
    
    40
    
    
    
    (6,838
    )
    
    
    384
    
    
    
    
    
    
    
    (6,414
    )Other, net
    
    
    7,830
    
    
    
    (3,783
    )
    
    
    (4,501
    )
    
    
    
    
    
    
    (454
    )80,223
    
    
    
    49,521
    
    
    
    6,337
    
    
    
    (59,669
    )
    
    
    76,412Cash Flows Provided (Used)
by Investing ActivitiesPurchases of capital assets
    
    
    (754
    )
    
    
    (15,289
    )
    
    
    (7,733
    )
    
    
    
    
    
    
    (23,776
    )Proceeds from sale of
discontinued operations
    
    
    
    
    
    
    21,421
    
    
    
    
    
    
    
    
    
    
    
    21,421Proceeds from sale of building
    
    
    
    
    
    
    2,319
    
    
    
    
    
    
    
    
    
    
    
    2,319Escrow deposit
    
    
    (4,207
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,207
    )Proceeds
from sale of capital assets
    
    
    3
    
    
    
    2,017
    
    
    
    292
    
    
    
    
    
    
    
    2,312Purchase of short-term
investments
    
    
    (173,273
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (173,273
    )Proceeds
from sale of short-term
investments
    
    
    112,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,014Acquisitions of businesses, net
    
    
    
    
    
    
    (28,261
    )
    
    
    
    
    
    
    
    
    
    
    (28,261
    )(66,217
    )
    
    
    (17,793
    )
    
    
    (7,441
    )
    
    
    
    
    
    
    (91,451
    )
 81




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Financing ActivitiesProceeds provided by stock
issuance under employee
stock plans
    
    
    4,727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,727Proceeds from stock issuance
    
    
    108,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108,490Net change in credit facilities
    
    
    (5,000
    )
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    (4,829
    )Repayment of long-term debt, net
    
    
    (2,781
    )
    
    
    (57
    )
    
    
    (464
    )
    
    
    
    
    
    
    (3,302
    )Net change in intercompany
financing
    
    
    (50,479
    )
    
    
    (31,962
    )
    
    
    22,772
    
    
    
    59,669
    
    
    
    54,957
    
    
    
    (32,019
    )
    
    
    22,479
    
    
    
    59,669
    
    
    
    105,086Effect of foreign exchange
rates on cash
    
    
    (458
    )
    
    
    92
    
    
    
    (856
    )
    
    
    
    
    
    
    (1,222
    )Net increase (decrease) in cash
and cash equivalents
    
    
    68,505
    
    
    
    (199
    )
    
    
    20,519
    
    
    
    
    
    
    
    88,825Cash and cash equivalents
 beginning of year
    
    
    6,859
    
    
    
    2,353
    
    
    
    20,267
    
    
    
    
    
    
    
    29,479Cash and cash equivalents
 end of year
    
    $
    75,364
    
    
    $
    2,154
    
    
    $
    40,786
    
    
    $
    
    
    
    $
    118,304
 82




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent AssetsCash and cash equivalents
    
    $
    6,859
    
    
    $
    2,353
    
    
    $
    20,267
    
    
    $
    
    
    
    $
    29,479Cash in escrow
    
    
    8,511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,511Accounts receivable, net
    
    
    2,221
    
    
    
    83,115
    
    
    
    46,870
    
    
    
    
    
    
    
    132,206Inventories
    
    
    
    
    
    
    76,168
    
    
    
    42,886
    
    
    
    
    
    
    
    119,054Deferred income tax benefits
    
    
    40,630
    
    
    
    
    
    
    
    (17,131
    )
    
    
    
    
    
    
    23,499Prepaid expenses
    
    
    353
    
    
    
    3,598
    
    
    
    5,490
    
    
    
    
    
    
    
    9,441Other current assets
    
    
    147
    
    
    
    288
    
    
    
    
    
    
    
    
    
    
    
    435Total Current Assets
    
    
    58,721
    
    
    
    165,522
    
    
    
    98,382
    
    
    
    
    
    
    
    322,625Property, Plant & Equipment, Net
    
    
    2,369
    
    
    
    99,360
    
    
    
    43,406
    
    
    
    
    
    
    
    145,135Goodwill
    
    
    
    
    
    
    175,607
    
    
    
    72,210
    
    
    
    
    
    
    
    247,817Intangibles, Net
    
    
    141
    
    
    
    77,160
    
    
    
    92,575
    
    
    
    
    
    
    
    169,876Debt Issuance Costs, Net
    
    
    5,818
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,818Deferred Income Tax Benefits
    
    
    11,216
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,216Other Assets
    
    
    9,780
    
    
    
    18,309
    
    
    
    4,772
    
    
    
    
    
    
    
    32,861Amounts Due To (From)
Subsidiaries
    
    
    152,346
    
    
    
    36,188
    
    
    
    
    
    
    
    (188,534
    )
    
    
    Investment in Subsidiaries
    
    
    558,234
    
    
    
    
    
    
    
    92
    
    
    
    (558,326
    )
    
    
    Total Assets
    
    $
    798,625
    
    
    $
    572,146
    
    
    $
    311,437
    
    
    $
    (746,860
    )
    
    $
    935,348
 83




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalLiabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    520
    
    
    $
    16,814
    
    
    $
    20,533
    
    
    $
    
    
    
    $
    37,867Accrued liabilities
    
    
    29,880
    
    
    
    41,466
    
    
    
    25,692
    
    
    
    
    
    
    
    97,038Credit facilities
    
    
    5,000
    
    
    
    
    
    
    
    1,977
    
    
    
    
    
    
    
    6,977Current maturities of
long-term debt
    
    
    
    
    
    
    50
    
    
    
    981
    
    
    
    
    
    
    
    1,031Federal and foreign
income taxes
    
    
    2,996
    
    
    
    75
    
    
    
    3,607
    
    
    
    
    
    
    
    6,678Total Current Liabilities
    
    
    38,396
    
    
    
    58,405
    
    
    
    52,790
    
    
    
    
    
    
    
    149,591Long-Term Debt, Net
    
    
    246,769
    
    
    
    7
    
    
    
    2,280
    
    
    
    
    
    
    
    249,056Deferred Income Taxes
    
    
    43,149
    
    
    
    
    
    
    
    294
    
    
    
    
    
    
    
    43,443Other Liabilities
    
    
    9,283
    
    
    
    13,840
    
    
    
    6,729
    
    
    
    
    
    
    
    29,852Amounts Due To (From)
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    186,310
    
    
    
    (186,310
    )
    
    
    Minority Interest
    
    
    
    
    
    
    
    
    
    
    2,378
    
    
    
    
    
    
    
    2,378Shareholders Equity
    
    
    461,028
    
    
    
    499,894
    
    
    
    60,656
    
    
    
    (560,550
    )
    
    
    461,028Total Liabilities and
Shareholders Equity
    
    $
    798,625
    
    
    $
    572,146
    
    
    $
    311,437
    
    
    $
    (746,860
    )
    
    $
    935,348
 84




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalNet Sales
    
    $
    
    
    
    $
    461,067
    
    
    $
    155,073
    
    
    $
    (2,530
    )
    
    $
    613,610Cost of Sales
    
    
    
    
    
    
    320,285
    
    
    
    100,835
    
    
    
    (2,530
    )
    
    
    418,590
    
    
    
    140,782
    
    
    
    54,238
    
    
    
    
    
    
    
    195,020ExpensesSelling, general
and administrative
    
    
    
    
    
    
    79,038
    
    
    
    39,708
    
    
    
    
    
    
    
    118,746Research, development
and engineering
    
    
    
    
    
    
    10,275
    
    
    
    15,581
    
    
    
    
    
    
    
    25,856Total Expenses
    
    
    
    
    
    
    89,313
    
    
    
    55,289
    
    
    
    
    
    
    
    144,602Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    51,469
    
    
    
    (1,051
    )
    
    
    
    
    
    
    50,418Gain on sale of business
    
    
    (1,700
    )
    
    
    
    
    
    
    (1,734
    )
    
    
    
    
    
    
    (3,434
    )Interest income
    
    
    (14,316
    )
    
    
    (3,017
    )
    
    
    (828
    )
    
    
    16,197
    
    
    
    (1,964
    )Interest expense
    
    
    17,010
    
    
    
    3,272
    
    
    
    13,251
    
    
    
    (16,197
    )
    
    
    17,336Other expense (income)
    
    
    (520
    )
    
    
    (239
    )
    
    
    250
    
    
    
    
    
    
    
    (509
    )Other Expense, Net
    
    
    474
    
    
    
    16
    
    
    
    10,939
    
    
    
    
    
    
    
    11,429Income (Loss) from Continuing
Operations Before Taxes
    
    
    (474
    )
    
    
    51,453
    
    
    
    (11,990
    )
    
    
    
    
    
    
    38,989Income Tax Expense (Benefit)
    
    
    (140
    )
    
    
    12,934
    
    
    
    (3,202
    )
    
    
    
    
    
    
    9,592Income (Loss) From
Continuing Operations
Before Minority Interest
    
    
    (334
    )
    
    
    38,519
    
    
    
    (8,788
    )
    
    
    
    
    
    
    29,397Minority Interest
    
    
    
    
    
    
    
    
    
    
    (22
    )
    
    
    
    
    
    
    (22
    )Income (Loss) From
Continuing Operations
    
    
    (334
    )
    
    
    38,519
    
    
    
    (8,810
    )
    
    
    
    
    
    
    29,375Income From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    10,208
    
    
    
    
    
    
    
    
    
    
    
    10,208Equity in Net Income of
Consolidated Subsidiaries
    
    
    39,917
    
    
    
    
    
    
    
    
    
    
    
    (39,917
    )
    
    
    Net Income (Loss)
    
    $
    39,583
    
    
    $
    48,727
    
    
    $
    (8,810
    )
    
    $
    (39,917
    )
    
    $
    39,583
 85




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Operating ActivitiesNet earnings (loss)
    
    $
    39,583
    
    
    $
    48,727
    
    
    $
    (8,810
    )
    
    $
    (39,917
    )
    
    $
    39,583Minority interest
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    22Depreciation & amortization
    
    
    
    
    
    
    22,320
    
    
    
    8,825
    
    
    
    
    
    
    
    31,145Deferred income tax
    
    
    3,375
    
    
    
    
    
    
    
    (111
    )
    
    
    
    
    
    
    3,264Stock-based compensation
    
    
    
    
    
    
    3,191
    
    
    
    1,135
    
    
    
    
    
    
    
    4,326Gain on disposal of
discontinued operations
    
    
    
    
    
    
    (12,521
    )
    
    
    
    
    
    
    
    
    
    
    (12,521
    )Gain on sale of land
    
    
    
    
    
    
    (892
    )
    
    
    
    
    
    
    
    
    
    
    (892
    )Gain on sale of product line
    
    
    (1,700
    )
    
    
    
    
    
    
    (1,734
    )
    
    
    
    
    
    
    (3,434
    )Working capital changes, net of
effect of acquisitionsAccounts receivable
    
    
    (2,126
    )
    
    
    (5,513
    )
    
    
    (1,393
    )
    
    
    
    
    
    
    (9,032
    )Inventories
    
    
    
    
    
    
    (6,897
    )
    
    
    (2,198
    )
    
    
    
    
    
    
    (9,095
    )Prepaid expenses
    
    
    (219
    )
    
    
    760
    
    
    
    (1,200
    )
    
    
    
    
    
    
    (659
    )Accounts payable
    
    
    382
    
    
    
    (684
    )
    
    
    2,902
    
    
    
    
    
    
    
    2,600Accrued liabilities
    
    
    11,800
    
    
    
    (1,444
    )
    
    
    (116
    )
    
    
    
    
    
    
    10,240Federal & foreign income taxes
    
    
    8,935
    
    
    
    (804
    )
    
    
    820
    
    
    
    
    
    
    
    8,951Other liabilities
    
    
    9,283
    
    
    
    (923
    )
    
    
    (4,001
    )
    
    
    
    
    
    
    4,359Other, net
    
    
    (9,734
    )
    
    
    5,668
    
    
    
    (1,464
    )
    
    
    
    
    
    
    (5,530
    )59,579
    
    
    
    50,988
    
    
    
    (7,323
    )
    
    
    (39,917
    )
    
    
    63,327Cash Flows Provided (Used)
by Investing ActivitiesPurchases of capital assets
    
    
    (490
    )
    
    
    (18,881
    )
    
    
    (2,755
    )
    
    
    
    
    
    
    (22,126
    )Proceeds from sale of
discontinued operations
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    10,000Proceeds from sale of product line
    
    
    1,700
    
    
    
    
    
    
    
    1,775
    
    
    
    
    
    
    
    3,475Proceeds from sale of land
    
    
    
    
    
    
    1,654
    
    
    
    
    
    
    
    
    
    
    
    1,654Escrow deposit
    
    
    (12,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,500
    )Proceeds
from sale of capital assets
    
    
    23
    
    
    
    1,190
    
    
    
    (435
    )
    
    
    
    
    
    
    778Proceeds
from sale of short-term
investments
    
    
    12,797
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,797Acquisitions of businesses, net
    
    
    
    
    
    
    (50,855
    )
    
    
    (87,956
    )
    
    
    
    
    
    
    (138,811
    )1,530
    
    
    
    (56,892
    )
    
    
    (89,371
    )
    
    
    
    
    
    
    (144,733
    )
 86




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Financing ActivitiesProceeds provided by stock
issuance under employee
stock plans
    
    
    2,807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,807Net change in credit facilities
    
    
    5,000
    
    
    
    (180
    )
    
    
    (698
    )
    
    
    
    
    
    
    4,122Repayment of long-term debt, net
    
    
    (27,996
    )
    
    
    (77
    )
    
    
    (1,356
    )
    
    
    
    
    
    
    (29,429
    )Debt and other issuance costs
    
    
    (268
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (268
    )Net change in intercompany
financing
    
    
    (143,641
    )
    
    
    5,573
    
    
    
    98,151
    
    
    
    39,917
    
    
    
    (164,098
    )
    
    
    5,316
    
    
    
    96,097
    
    
    
    39,917
    
    
    
    (22,768
    )Effect of foreign exchange
rates on cash
    
    
    14
    
    
    
    (89
    )
    
    
    2,365
    
    
    
    
    
    
    
    2,290Net increase (decrease) in cash
and cash equivalents
    
    
    (102,975
    )
    
    
    (677
    )
    
    
    1,768
    
    
    
    
    
    
    
    (101,884
    )Cash and cash equivalents
 beginning of year
    
    
    109,834
    
    
    
    3,030
    
    
    
    18,499
    
    
    
    
    
    
    
    131,363Cash and cash equivalents
 end of year
    
    $
    6,859
    
    
    $
    2,353
    
    
    $
    20,267
    
    
    $
    
    
    
    $
    29,479
 87




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalNet Sales
    
    $
    
    
    
    $
    426,051
    
    
    $
    124,638
    
    
    $
    (1,557
    )
    
    $
    549,132Cost of Sales
    
    
    
    
    
    
    293,913
    
    
    
    84,575
    
    
    
    (1,557
    )
    
    
    376,931
    
    
    
    132,138
    
    
    
    40,063
    
    
    
    
    
    
    
    172,201ExpensesSelling, general
and administrative
    
    
    
    
    
    
    79,460
    
    
    
    25,841
    
    
    
    
    
    
    
    105,301Research, development
and engineering
    
    
    
    
    
    
    7,564
    
    
    
    10,218
    
    
    
    
    
    
    
    17,782Total Expenses
    
    
    
    
    
    
    87,024
    
    
    
    36,059
    
    
    
    
    
    
    
    123,083Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    45,114
    
    
    
    4,004
    
    
    
    
    
    
    
    49,118Loss on sale of business
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    66Gain on derivative
financial instruments
    
    
    (2,676
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,676
    )Interest income
    
    
    (5,492
    )
    
    
    (2,511
    )
    
    
    (370
    )
    
    
    7,505
    
    
    
    (868
    )Interest expense
    
    
    11,624
    
    
    
    2,526
    
    
    
    5,346
    
    
    
    (7,505
    )
    
    
    11,991Other expense (income)
    
    
    (116
    )
    
    
    96
    
    
    
    20
    
    
    
    
    
    
    
    Other Expense, Net
    
    
    3,340
    
    
    
    111
    
    
    
    5,062
    
    
    
    
    
    
    
    8,513Income (Loss) from Continuing
Operations Before Taxes
    
    
    (3,340
    )
    
    
    45,003
    
    
    
    (1,058
    )
    
    
    
    
    
    
    40,605Income Tax Expense (Benefit)
    
    
    (868
    )
    
    
    13,572
    
    
    
    (246
    )
    
    
    
    
    
    
    12,458Income (Loss) From
Continuing Operations
    
    
    (2,472
    )
    
    
    31,431
    
    
    
    (812
    )
    
    
    
    
    
    
    28,147Loss From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    (5,312
    )
    
    
    
    
    
    
    
    
    
    
    (5,312
    )Equity in Net Income of
Consolidated Subsidiaries
    
    
    25,307
    
    
    
    
    
    
    
    
    
    
    
    (25,307
    )
    
    
    Net Income (Loss)
    
    $
    22,835
    
    
    $
    26,119
    
    
    $
    (812
    )
    
    $
    (25,307
    )
    
    $
    22,835
 88




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Operating ActivitiesNet earnings (loss)
    
    $
    22,835
    
    
    $
    26,119
    
    
    $
    (812
    )
    
    $
    (25,307
    )
    
    $
    22,835Depreciation & amortization
    
    
    
    
    
    
    22,230
    
    
    
    3,985
    
    
    
    
    
    
    
    26,215Deferred income tax
    
    
    14,051
    
    
    
    (4,221
    )
    
    
    (595
    )
    
    
    
    
    
    
    9,235Stock-based compensation
    
    
    
    
    
    
    1,137
    
    
    
    291
    
    
    
    
    
    
    
    1,428Loss on disposal and holding
period loss on discontinued
operations
    
    
    
    
    
    
    9,282
    
    
    
    
    
    
    
    
    
    
    
    9,282Loss on sale of product line
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    66Working capital changes, net of
effect of acquisitionsAccounts receivable
    
    
    154
    
    
    
    (10,824
    )
    
    
    1,154
    
    
    
    
    
    
    
    (9,516
    )Inventories
    
    
    
    
    
    
    2,078
    
    
    
    4,244
    
    
    
    
    
    
    
    6,322Prepaid expenses
    
    
    (97
    )
    
    
    (8
    )
    
    
    222
    
    
    
    
    
    
    
    117Accounts payable
    
    
    115
    
    
    
    503
    
    
    
    (5,014
    )
    
    
    
    
    
    
    (4,396
    )Accrued liabilities
    
    
    7,905
    
    
    
    1,155
    
    
    
    (4,134
    )
    
    
    
    
    
    
    4,926Federal & foreign income taxes
    
    
    (7,451
    )
    
    
    6,639
    
    
    
    (111
    )
    
    
    
    
    
    
    (923
    )Other, net
    
    
    (1,754
    )
    
    
    (2,397
    )
    
    
    4,348
    
    
    
    
    
    
    
    19735,758
    
    
    
    51,693
    
    
    
    3,644
    
    
    
    (25,307
    )
    
    
    65,788Cash Flows Provided (Used)
by Investing ActivitiesPurchases of capital assets
    
    
    (2,235
    )
    
    
    (12,334
    )
    
    
    (2,561
    )
    
    
    
    
    
    
    (17,130
    )Proceeds
from sale of discontinued operations
    
    
    
    
    
    
    3,850
    
    
    
    
    
    
    
    
    
    
    
    3,850Proceeds
from sale of product line
    
    
    
    
    
    
    
    
    
    
    5,630
    
    
    
    
    
    
    
    5,630Escrow deposit
    
    
    (1,036
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,036
    )Proceeds
from sale of capital assets
    
    
    38
    
    
    
    581
    
    
    
    147
    
    
    
    
    
    
    
    766Purchase of short-term
investments
    
    
    (12,797
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,797
    )Acquisitions of businesses, net
    
    
    
    
    
    
    (32,767
    )
    
    
    (78,968
    )
    
    
    
    
    
    
    (111,735
    )(16,030
    )
    
    
    (40,670
    )
    
    
    (75,752
    )
    
    
    
    
    
    
    (132,452
    )
 89




---



##### 



Non-Guarantor
    
    
    GuarantorIn Thousands
    
    Parent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows Provided (Used)
by Financing ActivitiesProceeds provided by stock
issuance under employee
stock plans
    
    
    2,424
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,424Net change in credit facilities
    
    
    
    
    
    
    
    
    
    
    2,279
    
    
    
    
    
    
    
    2,279Repayment of long-term debt
    
    
    (235
    )
    
    
    (76
    )
    
    
    (421
    )
    
    
    
    
    
    
    (732
    )Debt and other issuance costs
    
    
    (7,735
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,735
    )Proceeds from note issuance
    
    
    175,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,000Investment in subsidiaries
    
    
    (85,867
    )
    
    
    (9,443
    )
    
    
    70,003
    
    
    
    25,307
    
    
    
    83,587
    
    
    
    (9,519
    )
    
    
    71,861
    
    
    
    25,307
    
    
    
    171,236Effect of foreign exchange
rates on cash
    
    
    (83
    )
    
    
    41
    
    
    
    4,322
    
    
    
    
    
    
    
    4,280Net increase in cash
and cash equivalents
    
    
    103,232
    
    
    
    1,545
    
    
    
    4,075
    
    
    
    
    
    
    
    108,852Cash and cash equivalents
 beginning of year
    
    
    6,602
    
    
    
    1,485
    
    
    
    14,424
    
    
    
    
    
    
    
    22,511Cash and cash equivalents
 end of year
    
    $
    109,834
    
    
    $
    3,030
    
    
    $
    18,499
    
    
    $
    
    
    
    $
    131,363
 90




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##### 



Managements Report on Internal Control Over Financial Reporting
        /s/ Robert W. CreminRobert W. CreminChairman, President and Chief Executive Officer(Principal Executive Officer)
 91




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##### 



/s/ Robert D. GeorgeRobert D. GeorgeVice President, Chief Financial Officer,Secretary and Treasurer(Principal Financial Officer)/s/
Gary J. PosnerGary
J. PosnerCorporate Controller(Principal Accounting Officer)
 92




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##### 



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders
Esterline Technologies Corporation
Bellevue, Washington
     93




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##### 



.
     94




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##### 



Report of Independent Registered Public Accounting Firm
 
      Ernst & Young LLP 
 95