##### Table of Contents



UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


FORM 10-K


(Mark One)


x


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2005


OR


o


| |                                                             
| | ------------------------------------------------------------
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE

SECURITIES EXCHANGE ACT OF 1934


For the transition period
from 
to


Commission file number 333-43005


PARK-OHIO INDUSTRIES, INC.


(Exact name of registrant as specified in its charter)


|                                                                                |  |                                               
|------------------------------------------------------------------------------- |  | ----------------------------------------------
|Ohio(State or other jurisdiction of
    incorporation or organization)          |  | 34-6520107(I.R.S. Employer Identification No.)
|                                                                               
|23000 Euclid Avenue
    Cleveland, Ohio(Address of principal executive offices) |  | 44117(Zip Code)                               

692-7200


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


None


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


None




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


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


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


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


Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in
Rule 12b-2 of the
Exchange Act.     Large accelerated
filer o Accelerated
filer o Non-accelerated
filer x


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




DOCUMENTS INCORPORATED BY REFERENCE


None




---

TABLE OF CONTENTS



|                                                    |                                                                                                                          |  |  |  |  |  |  | 
|--------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ |  |  |  |  |  |  | 
|Part I                                             
|                                                    | Item 1. Business                                                                                                        
|                                                    | Item 1A. Risk Factors                                                                                                   
|                                                    | Item 1B. Unresolved Staff Comments                                                                                      
|                                                    | Item 2. Properties                                                                                                      
|                                                    | Item 3. Legal Proceedings                                                                                               
|                                                    | Item 4. Submission of Matters to a Vote of Security Holders                                                             
|Part II                                            
|                                                    | Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|                                                    | Item 6. Selected Financial Data                                                                                         
|                                                    | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations                           
|                                                    | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                                     
|Item 8. Financial Statements and Supplementary Data
|                                                    | Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                            
|                                                    | Item 9A. Controls and Procedures                                                                                        
|                                                    | Item 9B. Other Information                                                                                              
|Part III                                           
|                                                    | Item 10. Directors and Executive Officers of the Registrant                                                             
|                                                    | Item 11. Executive Compensation                                                                                         
|                                                    | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                 
|                                                    | Item 13. Certain Relationships and Related Transactions                                                                 
|                                                    | Item 14. Principal Accountant Fees and Services                                                                         
|Part IV                                            
|                                                    | Item 15. Exhibits and Financial Statement Schedules                                                                     
|SIGNATURES                                         
|EXHIBIT INDEX                                      
|EX-24.1 Power of Attorney                          
|EX-31.1 302 CEO Certification                      
|EX-31.2 302 CFO Certification                      
|EX-32.1 906 CEO & CFO Certification                



---



##### Table of Contents






Part I







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

Overview










|                           |  |                                                                                                                                                                                                                                                         |  |                                                                                                                                                                                           |  |                                                                                                                                                                                                                             
|-------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  | Integrated Logistics                                                                                                                                                                                                                                    |  |                                                                                                                                                                                           |  |                                                                                                                                                                                                                             
|                           |  | Solutions                                                                                                                                                                                                                                               |  | Aluminum Products                                                                                                                                                                         |  | Manufactured Products                                                                                                                                                                                                       
|                           |  |                                                                                                                                                                                                                                                         |  |                                                                                                                                                                                           |  |                                                                                                                                                                                                                             
|NET
    SALES(1)           |  | $532.6 million
    (57% of total)                                                                                                                                                                                                                       |  | $159.1 million
    (17% of total)                                                                                                                                                         |  | $241.2 million
    (26% of total)                                                                                                                                                                                           
|SELECTED PRODUCTS          |  | Sourcing, planning and procurement of over 175,000 production
    components, including:
     Fasteners
     Pins
     Valves
     Hoses
     Wire harnesses
     Clamps and fittings
     Rubber and plastic
    components                     |  |  Pump housings
     Clutch retainers/ pistons
     Control arms
     Knuckles
     Master cylinders
     Pinion housings
     Brake calipers
     Oil pans
     Flywheel spacers |  |  Induction heating and melting systems
     Pipe threading
    systems
     Industrial oven systems
     Injection molded rubber components
     Forging presses                                                       
|SELECTED INDUSTRIES SERVED |  |  Heavy-duty truck
     Automotive and vehicle parts
     Electrical distribution and controls
     Power sports/ fitness equipment
     HVAC
     Aerospace and defense
     Electrical components
     Appliance
     Semiconductor equipment |  |  Automotive
     Agricultural equipment
     Construction equipment
     Heavy-duty truck
     Marine equipment                                                                      |  |  Steel
     Coatings
     Forging
     Foundry
     Heavy-duty truck
     Construction equipment
     Bottling
     Automotive
     Oil and gas
     Rail and locomotive manufacturing
     Aerospace and defense






|    |                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Results are for the year ended December 31, 2005 and
    exclude the results of operations related to the assets of the
    Purchased Parts Group, Inc. prior to the date of acquisition on
    July 20, 2005.

Integrated Logistics Solutions




1



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##### Table of Contents



just-in point-of


10-K


Products and Services. on-site




®


Markets and Customers.


2



---



##### Table of Contents





Competition.


Aluminum Products




Products and Services.


10-K


Markets and Customers.


Competition.


3



---



##### Table of Contents





Manufactured Products




Products and Services.




Markets and Customers.


Competition.


Sales and Marketing




4



---



##### Table of Contents





Raw Materials and Suppliers




Customer Dependence




Backlog


just-in


Environmental, Health and Safety Regulations






5



---



##### Table of Contents



clean-up


Information as to Industry Segment Reporting and Geographic
Areas




Recent Developments




Available Information


10-K, 10-Q, 8-K 1-800-SEC-0330,





Item 1A. Risk Factors






| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | The industries in which we operate are cyclical and are
    affected by the economy in general.



6



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##### Table of Contents





| |                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because a significant portion of our sales is to the
    automotive and heavy-duty truck industries, a decrease in the
    demand of these industries or the loss of any of our major
    customers in these industries could adversely affect our
    financial health.





| |                                                                                                           
| | ----------------------------------------------------------------------------------------------------------
| | Our ILS customers are generally not contractually
    obligated to purchase products and services from us.





| |                                   
| | ----------------------------------
| | We are dependent on key customers.





| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | the loss of any key customer, in whole or in part;                                                              
|
| |  | the insolvency or bankruptcy of any key customer;                                                               
|
| |  | a declining market in which customers reduce orders or demand
    reduced prices; or                            
|
| |  | a strike or work stoppage at a key customer facility, which
    could affect both their suppliers and customers.





7



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| |                                             
| | --------------------------------------------
| | We operate in highly competitive industries.







| |                                                          
| | ---------------------------------------------------------
| | The loss of key executives could adversely impact
    us.





| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | We may encounter difficulty in expanding our business
    through targeted acquisitions.







| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | Our ILS business depends upon third parties for
    substantially all of our component parts.



8



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##### Table of Contents







| |                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The raw materials used in our production processes and by
    our suppliers of component parts are subject to price and supply
    fluctuations that could increase our costs of production and
    adversely affect our results of operations.







| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The energy costs involved in our production processes and
    transportation are subject to fluctuations that are beyond our
    control and could significantly increase our costs of
    production.





| |                                                                             
| | ----------------------------------------------------------------------------
| | Potential product liability risks exist from the products
    which we sell.





| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | Some of our employees belong to labor unions, and strikes
    or work stoppages could adversely affect our operations.



9



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##### Table of Contents





| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | We operate and source internationally, which exposes us to
    the risks of doing business abroad.





| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | fluctuations in currency exchange rates;                                
|
| |  | limitations on ownership and on repatriation of earnings;               
|
| |  | transportation delays and interruptions;                                
|
| |  | political, social and economic instability and disruptions;             
|
| |  | government embargoes or foreign trade restrictions;                     
|
| |  | the imposition of duties and tariffs and other trade barriers;          
|
| |  | import and export controls;                                             
|
| |  | labor unrest and current and changing regulatory environments;          
|
| |  | the potential for nationalization of enterprises;                       
|
| |  | difficulties in staffing and managing multinational operations;         
|
| |  | limitations on our ability to enforce legal rights and
    remedies; and
|
| |  | potentially adverse tax consequences.                                   





| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | We are subject to significant environmental, health and
    safety laws and regulations and related compliance expenditures
    and liabilities.







10



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##### Table of Contents







| |                                                                               
| | ------------------------------------------------------------------------------
| | If our information systems fail, our business will be
    materially affected.





| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | Operating problems in our business may materially
    adversely affect our financial condition and results of
    operations.





| |                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Chairman of the Board and Chief Executive Officer and
    our President and Chief Operating Officer collectively
    beneficially own a significant portion of our parent
    companys outstanding common stock and their interests may
    conflict with yours.








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








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



11



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|                 |  |                    |  |          |              |                |  |     |         |     |  |                            
|---------------- |  | ------------------ |  | -------- | ------------ | -------------- |  | --- | ------- | --- |  | ---------------------------
|Related Industry |  |                    |  | Owned or |              | Approximate    |  |    
|Segment          |  | Location           |  | Leased   |              | Square Footage |  | Use
|                 |  |                    |  |          |              |                |  |    
|ILS(1)           |  | Cleveland, OH      |  |          | Leased       |                |  |     | 60,350  | (2) |  | ILS Corporate Office       
|                 |  | Memphis, TN        |  |          | Leased       |                |  |     | 121,700 |     |  | Logistics                  
|                 |  | Dayton, OH         |  |          | Leased       |                |  |     | 112,960 |     |  | Logistics                  
|                 |  | Lawrence, PA       |  |          | Leased       |                |  |     | 116,000 |     |  | Logistics and Manufacturing
|                 |  | St. Paul, MN       |  |          | Leased       |                |  |     | 104,425 |     |  | Logistics                  
|                 |  | Allentown, PA      |  |          | Leased       |                |  |     | 62,200  |     |  | Logistics                  
|                 |  | Atlanta, GA        |  |          | Leased       |                |  |     | 56,000  |     |  | Logistics                  
|                 |  | Dallas, TX         |  |          | Leased       |                |  |     | 49,985  |     |  | Logistics                  
|                 |  | Nashville, TN      |  |          | Leased       |                |  |     | 44,900  |     |  | Logistics                  
|                 |  | Charlotte, NC      |  |          | Leased       |                |  |     | 24,000  |     |  | Logistics                  
|                 |  | Kent, OH           |  |          | Leased       |                |  |     | 225,000 |     |  | Manufacturing              
|                 |  | Mississauga,       |  |          | Leased       |                |  |     | 117,000 |     |  | Manufacturing              
|                 |  | Ontario, Canada    |  |          |              |                |  |     |         |     |  |                            
|                 |  | Solon, OH          |  |          | Leased       |                |  |     | 42,600  |     |  | Logistics                  
|                 |  | Dublin, VA         |  |          | Leased       |                |  |     | 40,000  |     |  | Logistics                  
|                 |  | Delaware, OH       |  |          | Owned        |                |  |     | 45,000  |     |  | Manufacturing              
|ALUMINUM         |  | Conneaut, OH(3)    |  |          | Leased/Owned |                |  |     | 304,000 |     |  | Manufacturing              
|PRODUCTS         |  | Huntington, IN     |  |          | Leased       |                |  |     | 132,000 |     |  | Manufacturing              
|                 |  | Fremont, IN        |  |          | Owned        |                |  |     | 108,000 |     |  | Manufacturing              
|                 |  | Wapakoneta, OH     |  |          | Owned        |                |  |     | 188,000 |     |  | Manufacturing              
|                 |  | Richmond, IN       |  |          | Leased/Owned |                |  |     | 97,300  |     |  | Manufacturing              
|                 |  | Cedarburg, WI      |  |          | Leased       |                |  |     | 157,000 |     |  | Manufacturing              
|MANUFACTURED     |  | Cuyahoga Hts., OH  |  |          | Owned        |                |  |     | 427,000 |     |  | Manufacturing              
|PRODUCTS(4)      |  | Le Roeulx, Belgium |  |          | Owned        |                |  |     | 120,000 |     |  | Manufacturing              
|                 |  | Euclid, OH         |  |          | Owned        |                |  |     | 154,000 |     |  | Manufacturing              
|                 |  | Wickliffe, OH      |  |          | Owned        |                |  |     | 110,000 |     |  | Manufacturing              
|                 |  | Boaz, AL           |  |          | Owned        |                |  |     | 100,000 |     |  | Manufacturing              
|                 |  | Warren, OH         |  |          | Owned        |                |  |     | 195,000 |     |  | Manufacturing              
|                 |  | Canton, OH         |  |          | Leased       |                |  |     | 125,000 |     |  | Manufacturing              
|                 |  | Oxted, England     |  |          | Owned        |                |  |     | 135,000 |     |  | Manufacturing              
|                 |  | Newport, AR        |  |          | Leased       |                |  |     | 111,300 |     |  | Manufacturing              
|                 |  | Cicero, IL         |  |          | Owned        |                |  |     | 45,000  |     |  | Manufacturing              
|                 |  | Cleveland, OH      |  |          | Leased       |                |  |     | 150,000 |     |  | Manufacturing              
|                 |  | Shanghai, China    |  |          | Leased       |                |  |     | 20,500  |     |  | Manufacturing              






|    |                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | ILS has 30 other facilities, none of which is deemed to be a
    principal facility.                                                                
|   
|(2) | Includes 11,000 square feet used by Park-Ohios
    corporate office.                                                                               
|   
|(3) | Includes three leased properties with square footage of 82,300,
    64,000 and 45,700 and two owned properties of 91,800 and
    20,200 square feet.
|   
|(4) | Manufactured Products has 16 other owned and leased facilities,
    none of which is deemed to be a principal facility.                             






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





12



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

10-K.


13



---



##### Table of Contents








Part II







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








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

10-K.







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

year-to


Executive Overview


just-in




14



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Goodwill






15



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##### Table of Contents



Results of Operations




| |                 
| | ----------------
| | 2005 versus 2004



| |                      
| | ---------------------
| | Net Sales by Segment:

|                       |  |              |       |  |      |   |         |        |           |            |        |  |  |       |    |   |  |   |      | 
|---------------------- |  | ------------ | ----- |  | ---- | - | ------- | ------ | --------- | ---------- | ------ |  |  | ----- | -- | - |  | - | ---- | 
|                       |  | Year Ended   |       |  |      |   |         |        |          
|                       |  | December 31, |       |  |      |   |         |        | Acquired/ |           
|                       |  |              |       |  |      |   | Percent |        |           | (Divested) |       
|                       |  | 2005         |       |  | 2004 |   |         | Change |           |            | Change |  |  | Sales |   
|                       |  |              |       |  |      |   |         |        |           |            |        |  |  |       |   
|ILS                    |  | $            | 532.6 |  |      | $ | 453.2   |        |           | $          | 79.4   |  |  |       | 18 | % |  | $ | 31.4 | 
|Aluminum Products      |  |              | 159.1 |  |      |   | 135.4   |        |           |            | 23.7   |  |  |       | 18 | % |  |   | 34.5 | 
|Manufactured Products  |  |              | 241.2 |  |      |   | 220.1   |        |           |            | 21.1   |  |  |       | 10 | % |  |   | 3.5  | 
|                       |  |              |       |  |      |   |         |        |           |            |        |  |  |       |   
|Consolidated net sales |  | $            | 932.9 |  |      | $ | 808.7   |        |           | $          | 124.2  |  |  |       | 15 | % |  | $ | 69.4 | 
|                       |  |              |       |  |      |   |         |        |           |            |        |  |  |       |   





| |                                      
| | -------------------------------------
| | Cost of Products Sold & Gross Profit:

|                                   |  |              |       |   |      |   |         |        |  |   |        |  |  |  |    |  
|---------------------------------- |  | ------------ | ----- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                                   |  | Year Ended   |       |   |      |   |        
|                                   |  | December 31, |       |   |      |   |        
|                                   |  |              |       |   |      |   | Percent |       
|                                   |  | 2005         |       |   | 2004 |   |         | Change |  |   | Change | 
|                                   |  |              |       |   |      |   |         |        |  |   |        | 
|Consolidated cost of products sold |  | $            | 796.3 |   |      | $ | 682.6   |        |  | $ | 113.7  |  |  |  | 17 | %
|                                   |  |              |       |   |      |   |         |        |  |   |        | 
|Consolidated gross profit          |  | $            | 136.6 |   |      | $ | 126.1   |        |  | $ | 10.5   |  |  |  | 8  | %
|                                   |  |              |       |   |      |   |         |        |  |   |        | 
|Gross margin                       |  |              | 14.6  | % |      |   | 15.6    | %      |  |   |        |  |  |  |    |  





| |                                                         
| | --------------------------------------------------------
| | Selling, General & Administrative
    (SG&A) Expenses:

|                           |  |              |      |   |      |   |         |        |  |   |        |  |  |  |   |  
|-------------------------- |  | ------------ | ---- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | - | -
|                           |  | Year Ended   |      |   |      |   |        
|                           |  | December 31, |      |   |      |   |        
|                           |  |              |      |   |      |   | Percent |       
|                           |  | 2005         |      |   | 2004 |   |         | Change |  |   | Change | 
|                           |  |              |      |   |      |   |         |        |  |   |        | 
|Consolidated SG&A expenses |  | $            | 81.4 |   |      | $ | 76.7    |        |  | $ | 4.7    |  |  |  | 6 | %
|SG&A percent               |  |              | 8.7  | % |      |   | 9.5     | %      |  |   |        |  |  |  |   |  



16



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| |                  
| | -----------------
| | Interest Expense:

|                                                       |  |              |       |   |      |   |         |        |  |  |                   |   |  |  |     |   
|------------------------------------------------------ |  | ------------ | ----- | - | ---- | - | ------- | ------ |  |  | ----------------- | - |  |  | --- | --
|                                                       |  | Year Ended   |       |   |      |   |        
|                                                       |  | December 31, |       |   |      |   |        
|                                                       |  |              |       |   |      |   | Percent |       
|                                                       |  | 2005         |       |   | 2004 |   |         | Change |  |  | Change            |  
|                                                       |  |              |       |   |      |   |         |        |  |  |                   |  
|Interest expense                                       |  | $            | 27.1  |   |      | $ | 31.4    |        |  |  | $(4.3             | ) |  |  | (14 | )%
|Debt extinguishment costs included in interest expense |  |              | -0-   |   |      | $ | 6.0     |        |  |  | $(6.0             | ) |  |  |     |   
|Average outstanding borrowings                         |  | $            | 357.1 |   |      | $ | 328.9   |        |  |  | $28.2             |   |  |  | 9   | % 
|Average borrowing rate                                 |  |              | 7.59  | % |      |   | 7.72    | %      |  |  | (13) basis points |   |  |  |     |   





| |              
| | -------------
| | Income Taxes:

|                                                                            |  |              |      |    |      |   |      |  
|--------------------------------------------------------------------------- |  | ------------ | ---- | -- | ---- | - | ---- | -
|                                                                            |  | Year Ended   |     
|                                                                            |  | December 31, |     
|                                                                            |  |              |     
|                                                                            |  | 2005         |      |    | 2004 |  
|                                                                            |  |              |      |    |      |  
|Income before income taxes                                                  |  | $            | 27.3 |    |      | $ | 17.9 |  
|Income taxes (benefit)                                                      |  | $            | (4.3 | )  |      | $ | 3.4  |  
|Reversal of tax valuation allowance included in 2005 income tax
    benefit |  |              | (7.3 | )  |      |   |      |  
|                                                                            |  |              |      |    |      |  
|2005 Income taxes excluding reversal of tax valuation allowance             |  | $            | 3.0  |    |      |   |      |  
|                                                                            |  |              |      |    |      |  
|Effective income tax rate                                                   |  |              | (16  | )% |      |   | 19   | %
|Effective income tax rate excluding reversal of tax valuation
    allowance |  |              | 11   | %  |      |   |      |  





17



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Results of Operations




| |                 
| | ----------------
| | 2004 versus 2003



| |                      
| | ---------------------
| | Net Sales by Segment:

|                       |  |              |       |  |      |   |         |        |  |   |        |  |  |  |    |  
|---------------------- |  | ------------ | ----- |  | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                       |  | Year Ended   |       |  |      |   |        
|                       |  | December 31, |       |  |      |   |        
|                       |  |              |       |  |      |   | Percent |       
|                       |  | 2004         |       |  | 2003 |   |         | Change |  |   | Change | 
|                       |  |              |       |  |      |   |         |        |  |   |        | 
|ILS                    |  | $            | 453.2 |  |      | $ | 377.6   |        |  | $ | 75.6   |  |  |  | 20 | %
|Aluminum Products      |  |              | 135.4 |  |      |   | 90.1    |        |  |   | 45.3   |  |  |  | 50 | %
|Manufactured Products  |  |              | 220.1 |  |      |   | 156.6   |        |  |   | 63.5   |  |  |  | 41 | %
|                       |  |              |       |  |      |   |         |        |  |   |        | 
|Consolidated net sales |  | $            | 808.7 |  |      | $ | 624.3   |        |  | $ | 184.4  |  |  |  | 30 | %
|                       |  |              |       |  |      |   |         |        |  |   |        | 





| |                                      
| | -------------------------------------
| | Cost of Products Sold & Gross Profit:

|                                   |  |              |       |   |      |   |         |        |  |   |        |  |  |  |    |  
|---------------------------------- |  | ------------ | ----- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                                   |  | Year Ended   |       |   |      |   |        
|                                   |  | December 31, |       |   |      |   |        
|                                   |  |              |       |   |      |   | Percent |       
|                                   |  | 2004         |       |   | 2003 |   |         | Change |  |   | Change | 
|                                   |  |              |       |   |      |   |         |        |  |   |        | 
|Consolidated cost of products sold |  | $            | 682.6 |   |      | $ | 527.6   |        |  | $ | 155.0  |  |  |  | 29 | %
|Consolidated gross profit          |  | $            | 126.1 |   |      | $ | 96.7    |        |  | $ | 29.4   |  |  |  | 30 | %
|Gross margin                       |  |              | 15.6  | % |      |   | 15.5    | %      |  |   |        |  |  |  |    |  





| |               
| | --------------
| | SG&A Expenses:

|                           |  |              |      |   |      |   |         |        |  |   |        |  |  |  |    |  
|-------------------------- |  | ------------ | ---- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                           |  | Year Ended   |      |   |      |   |        
|                           |  | December 31, |      |   |      |   |        
|                           |  |              |      |   |      |   | Percent |       
|                           |  | 2004         |      |   | 2003 |   |         | Change |  |   | Change | 
|                           |  |              |      |   |      |   |         |        |  |   |        | 
|Consolidated SG&A expenses |  | $            | 76.7 |   |      | $ | 62.4    |        |  | $ | 14.3   |  |  |  | 23 | %
|SG&A percent               |  |              | 9.5  | % |      |   | 10.0    | %      |  |   |        |  |  |  |    |  

18



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| |                  
| | -----------------
| | Interest Expense:

|                                                       |  |              |       |   |      |   |         |        |  |                   |        |  |  |  |    |  
|------------------------------------------------------ |  | ------------ | ----- | - | ---- | - | ------- | ------ |  | ----------------- | ------ |  |  |  | -- | -
|                                                       |  | Year Ended   |       |   |      |   |        
|                                                       |  | December 31, |       |   |      |   |        
|                                                       |  |              |       |   |      |   | Percent |       
|                                                       |  | 2004         |       |   | 2003 |   |         | Change |  |                   | Change | 
|                                                       |  |              |       |   |      |   |         |        |  |                   |        | 
|Interest expense                                       |  | $            | 31.4  |   |      | $ | 26.2    |        |  |                   | $5.2   |  |  |  | 20 | %
|Debt extinguishment costs included in interest expense |  | $            | 6.0   |   |      |   | -0-     |        |  |                   | $6.0   |  |  |  |    |  
|Average outstanding borrowings                         |  | $            | 328.9 |   |      | $ | 320.8   |        |  |                   | $8.1   |  |  |  | 3  | %
|Average borrowing rate                                 |  |              | 7.72  | % |      |   | 8.17    | %      |  | (45) basis points |        |  |  | 





| |              
| | -------------
| | Income Taxes:



Critical Accounting Policies




Revenue Recognition:


Allowance for Uncollectible Accounts Receivable:


19



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Allowance for Obsolete and Slow Moving Inventory:


Impairment of Long-Lived Assets:


Restructuring: 94-3)


94-3


Goodwill:




Deferred Income Tax Assets and Liabilities:




Pension and Other Postretirement Benefit Plans:


20



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Environmental


clean-up




Seasonality; Variability of Operating Results






Forward-Looking Statements


10-K


21



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







22



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

Index to Consolidated Financial Statements


|                                                                                                   |  |      |    | 
|-------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                   |  | Page |   
|                                                                                                   |  |      |   
|Report of Management on Internal Control Over Financial Reporting                                  |  |      | 24 | 
|Report of Independent Registered Public Accounting Firm                                            |  |      | 25 | 
|Report of Independent Registered Public Accounting Firm                                            |  |      | 26 | 
|Consolidated Balance Sheets  December 31, 2005
    and 2004                                       |  |      | 27 | 
|Consolidated Statements of Operations  Years Ended
    December 31, 2005, 2004 and 2003           |  |      | 28 | 
|Consolidated Statements of Shareholders Equity 
    Years Ended December 31, 2005, 2004 and 2003 |  |      | 29 | 
|Consolidated Statements of Cash Flows  Years Ended
    December 31, 2005, 2004 and 2003           |  |      | 30 | 
|Notes to Consolidated Financial Statements                                                         |  |      | 31 | 

23



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REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER


FINANCIAL REPORTING


15d-15(f)


10-K.






24



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




















| |                      
| | ---------------------
| | -s- Ernst & Young LLP





25



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












Park-Ohio




| |                      
| | ---------------------
| | -s- Ernst & Young LLP





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Park-Ohio Industries, Inc. and Subsidiaries


Consolidated Balance Sheets


|                                                                                          |                                                                                                     |                           |                                      |         |         |   |         |         |         |  | 
|----------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ------------------------- | ------------------------------------ | ------- | ------- | - | ------- | ------- | ------- |  | 
|                                                                                          |                                                                                                     | December 31,              |                                     
|                                                                                          |                                                                                                     |                           |                                     
|                                                                                          |                                                                                                     | 2005                      |                                      |         | 2004    |  
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     | (Dollars in thousands)    |                                     
|ASSETS                                                                                    |                                                                                                     |                           |                                      |         |         |   |         |        
|Current Assets                                                                            |                                                                                                     |                           |                                      |         |         |   |         |        
|                                                                                          | Cash and cash equivalents                                                                           |                           | $                                    | 17,868  |         |   | $       | 6,407   |        
|                                                                                          | Accounts receivable, less allowances for doubtful accounts of
    $5,120 in 2005 and $3,976 in 2004 |                           |                                      | 153,502 |         |   |         | 145,475 |        
|                                                                                          | Inventories                                                                                         |                           |                                      | 190,553 |         |   |         | 177,294 |        
|                                                                                          | Deferred tax assets                                                                                 |                           |                                      | 8,627   |         |   |         | -0-     |        
|                                                                                          | Other current assets                                                                                |                           |                                      | 27,753  |         |   |         | 20,655  |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     | Total Current Assets      |                                      |         | 398,303 |   |         |         | 349,831 | 
|Property, Plant and Equipment:                                                            |                                                                                                     |                           |                                      |         |         |   |         |        
|                                                                                          | Land and land improvements                                                                          |                           |                                      | 6,964   |         |   |         | 6,788   |        
|                                                                                          | Buildings                                                                                           |                           |                                      | 38,384  |         |   |         | 36,217  |        
|                                                                                          | Machinery and equipment                                                                             |                           |                                      | 198,019 |         |   |         | 185,489 |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     |                           | 243,367                              |         |         |   | 228,494 |        
|                                                                                          | Less accumulated depreciation                                                                       |                           |                                      | 127,136 |         |   |         | 118,613 |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     |                           | 116,231                              |         |         |   | 109,881 |        
|Other Assets:                                                                             |                                                                                                     |                           |                                      |         |         |   |         |        
|                                                                                          | Goodwill                                                                                            |                           |                                      | 82,703  |         |   |         | 82,565  |        
|                                                                                          | Net assets held for sale                                                                            |                           |                                      | -0-     |         |   |         | 1,035   |        
|                                                                                          | Other                                                                                               |                           |                                      | 70,617  |         |   |         | 68,535  |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     | $                         | 667,854                              |         |         | $ | 611,847 |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                         
|                                                                                          |                                                                                                     |                           | LIABILITIES AND SHAREHOLDERS EQUITY |         |         |   |         |         |         |  | 
|Current Liabilities                                                                       |                                                                                                     |                           |                                      |         |         |   |         |        
|                                                                                          | Trade accounts payable                                                                              |                           | $                                    | 115,396 |         |   | $       | 108,862 |        
|                                                                                          | Accrued expenses                                                                                    |                           |                                      | 68,313  |         |   |         | 59,745  |        
|                                                                                          | Current portion of long-term liabilities                                                            |                           |                                      | 4,161   |         |   |         | 5,812   |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     | Total Current Liabilities |                                      |         | 187,870 |   |         |         | 174,419 | 
|Long-Term Liabilities, less current portion
    8.375% senior subordinated notes due 2014 |                                                                                                     |                           | 210,000                              |         |         |   | 210,000 |        
|                                                                                          | Revolving credit                                                                                    |                           |                                      | 128,300 |         |   |         | 120,600 |        
|                                                                                          | Other long-term debt                                                                                |                           |                                      | 6,705   |         |   |         | 4,776   |        
|                                                                                          | Deferred tax liability                                                                              |                           |                                      | 3,176   |         |   |         | 1,074   |        
|                                                                                          | Other postretirement benefits and other long-term liabilities                                       |                           |                                      | 26,174  |         |   |         | 26,496  |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     |                           | 374,355                              |         |         |   | 362,946 |        
|Shareholders Equity                                                                      |                                                                                                     |                           |                                      |         |         |   |         |        
|                                                                                          | Common stock, par value $1 a share                                                                  |                           |                                      | -0-     |         |   |         | -0-     |        
|                                                                                          | Additional paid-in capital                                                                          |                           |                                      | 64,844  |         |   |         | 64,844  |        
|                                                                                          | Retained earnings                                                                                   |                           |                                      | 42,887  |         |   |         | 11,314  |        
|                                                                                          | Accumulated other comprehensive loss                                                                |                           |                                      | (2,102  | )       |   |         | (1,676  | )      
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     |                           | 105,629                              |         |         |   | 74,482  |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  
|                                                                                          |                                                                                                     | $                         | 667,854                              |         |         | $ | 611,847 |        
|                                                                                          |                                                                                                     |                           |                                      |         |         |  



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Park-Ohio Industries, Inc. and Subsidiaries


Consolidated Statements of Operations


|                                             |                                   |                         |         |         |        |   |         |         |        |   |         |         |         |  
|-------------------------------------------- | --------------------------------- | ----------------------- | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------- | -
|                                             |                                   | Year Ended December 31, |        
|                                             |                                   |                         |        
|                                             |                                   | 2005                    |         |         | 2004   |   |         | 2003    |       
|                                             |                                   |                         |         |         |        |   |         |         |       
|                                             |                                   | (Dollars in thousands)  |        
|Net sales                                    |                                   | $                       | 932,900 |         |        | $ | 808,718 |         |        | $ | 624,295 |        
|Cost of products sold                        |                                   |                         | 796,283 |         |        |   | 682,658 |         |        |   | 527,586 |        
|                                             |                                   |                         |         |         |        |   |         |         |       
|                                             | Gross profit                      |                         |         | 136,617 |        |   |         | 126,060 |        |   |         | 96,709  |        
|Selling, general and administrative expenses |                                   |                         | 81,368  |         |        |   | 76,714  |         |        |   | 62,369  |        
|Restructuring and impairment charges         |                                   |                         | 943     |         |        |   | -0-     |         |        |   | 18,808  |        
|                                             |                                   |                         |         |         |        |   |         |         |       
|                                             | Operating income                  |                         |         | 54,306  |        |   |         | 49,346  |        |   |         | 15,532  |        
|Interest expense                             |                                   |                         | 27,056  |         |        |   | 31,413  |         |        |   | 26,151  |        
|                                             |                                   |                         |         |         |        |   |         |         |       
|                                             | Income (loss) before income taxes |                         |         | 27,250  |        |   |         | 17,933  |        |   |         | (10,619 | )      
|Income taxes (benefit)                       |                                   |                         | (4,323  | )       |        |   | 3,400   |         |        |   | 904     |        
|                                             |                                   |                         |         |         |        |   |         |         |       
|                                             |                                   | Net income (loss)       |         | $       | 31,573 |   |         | $       | 14,533 |   |         | $       | (11,523 | )
|                                             |                                   |                         |         |         |        |   |         |         |       



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Park-Ohio Industries, Inc. and Subsidiaries


Consolidated Statements of Shareholders Equity


|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         |         |  
|---------------------------- | --------------------------------------- | ---------------------- | --- | ---------- | ------- | - | ------ | ----------- | ------------- | - | ------ | ------- | - | ----- | ------ | ----- | - | - | ------- | ------- | -
|                             |                                         |                        |     |            |         |   |        | Accumulated |               |   |       
|                             |                                         |                        |     |            |         |   |        | Other       |               |   |       
|                             |                                         |                        |     | Additional |         |   |        |             | Comprehensive |   |        |        
|                             |                                         | Common                 |     |            | Paid-In |   |        | Retained    |               |   | Income |         |   |      
|                             |                                         | Stock                  |     |            | Capital |   |        | Earnings    |               |   | (Loss) |         |   | Total |       
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|                             |                                         | (Dollars in thousands) |    
|Balance at January 1, 2003   |                                         | $                      | -0- |            |         | $ | 64,844 |             |               | $ | 8,304  |         |   | $     | (8,096 | )     |   | $ | 65,052  |        
|Comprehensive (loss):        |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         |        
|                             | Net Loss                                |                        |     |            |         |   |        |             |               |   |        | (11,523 | ) |       |        |       |   |   |         | (11,523 | )
|                             | Foreign currency translation adjustment |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | 3,632 |   |   |         | 3,632   |  
|                             | Minimum pension liability               |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | 1,200 |   |   |         | 1,200   |  
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|                             | Comprehensive (loss)                    |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         | (6,691  | )
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|Balance at December 31, 2003 |                                         |                        | -0- |            |         |   | 64,844 |             |               |   | (3,219 | )       |   |       | (3,264 | )     |   |   | 58,361  |        
|Comprehensive income (loss): |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         |        
|                             | Net income                              |                        |     |            |         |   |        |             |               |   |        | 14,533  |   |       |        |       |   |   |         | 14,533  |  
|                             | Foreign currency translation adjustment |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | 2,071 |   |   |         | 2,071   |  
|                             | Minimum pension liability               |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | (483  | ) |   |         | (483    | )
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|                             | Comprehensive income                    |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         | 16,121  |  
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|Balance at December 31, 2004 |                                         |                        | -0- |            |         |   | 64,844 |             |               |   | 11,314 |         |   |       | (1,676 | )     |   |   | 74,482  |        
|Comprehensive income (loss): |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         |        
|                             | Net income                              |                        |     |            |         |   |        |             |               |   |        | 31,573  |   |       |        |       |   |   |         | 31,573  |  
|                             | Foreign currency translation adjustment |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | 94    |   |   |         | 94      |  
|                             | Minimum pension liability               |                        |     |            |         |   |        |             |               |   |        |         |   |       |        | (520  | ) |   |         | (520    | )
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|                             | Comprehensive income                    |                        |     |            |         |   |        |             |               |   |        |         |   |       |        |       |   |   |         | 31,147  |  
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       
|Balance at December 31, 2005 |                                         | $                      | -0- |            |         | $ | 64,844 |             |               | $ | 42,887 |         |   | $     | (2,102 | )     |   | $ | 105,629 |        
|                             |                                         |                        |     |            |         |   |        |             |               |   |        |         |   |       |       



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Park-Ohio Industries, Inc. and Subsidiaries


Consolidated Statements of Cash Flows


|                                                                                      |                                       |                                                  |         |         |         |   |          |         |         |   |          |        |         |  
|------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------ | ------- | ------- | ------- | - | -------- | ------- | ------- | - | -------- | ------ | ------- | -
|                                                                                      |                                       | Year Ended December 31,                          |        
|                                                                                      |                                       |                                                  |        
|                                                                                      |                                       | 2005                                             |         |         | 2004    |   |          | 2003    |        
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|                                                                                      |                                       | (Dollars in thousands)                           |        
|OPERATING ACTIVITIES                                                                  |                                       |                                                  |         |         |         |   |          |         |         |   |          |       
|Net income (loss)                                                                     |                                       | $                                                | 31,573  |         |         | $ | 14,533   |         |         | $ | (11,523  | )     
|Adjustments to reconcile net income (loss) to net cash provided
    by operations:    |                                       |                                                  |         |         |         |   |          |         |         |   |          |       
|                                                                                      |                                       | Depreciation and amortization                    |         |         | 17,261  |   |          |         | 15,385  |   |          |        | 15,479  |  
|                                                                                      |                                       | Restructuring and impairment charges             |         |         | 1,776   |   |          |         | -0-     |   |          |        | 18,641  |  
|                                                                                      |                                       | Deferred income taxes                            |         |         | (6,525  | ) |          |         | 1,074   |   |          |        | -0-     |  
|Changes in operating assets and liabilities excluding
    acquisitions of businesses: |                                       |                                                  |         |         |         |   |          |         |         |   |          |       
|                                                                                      |                                       | Accounts receivable                              |         |         | 5,507   |   |          |         | (35,606 | ) |          |        | 539     |  
|                                                                                      |                                       | Inventories                                      |         |         | (1,699  | ) |          |         | (26,541 | ) |          |        | 6,991   |  
|                                                                                      |                                       | Accounts payable and accrued expenses            |         |         | (934    | ) |          |         | 39,400  |   |          |        | (12,160 | )
|                                                                                      |                                       | Other                                            |         |         | (12,464 | ) |          |         | (7,331  | ) |          |        | (6,149  | )
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|                                                                                      |                                       | Net cash provided by operating activities        |         |         | 34,495  |   |          |         | 914     |   |          |        | 11,818  |  
|INVESTING ACTIVITIES                                                                  |                                       |                                                  |         |         |         |   |          |         |         |   |          |       
|Purchases of property, plant and equipment, net                                       |                                       |                                                  | (20,295 | )       |         |   | (9,963   | )       |         |   | (10,869  | )     
|Costs of acquisitions, net of cash acquired                                           |                                       |                                                  | (12,181 | )       |         |   | (9,997   | )       |         |   | -0-      |       
|Proceeds from the sale of business units or assets held for sale                      |                                       |                                                  | 1,100   |         |         |   | -0-      |         |         |   | 7,340    |       
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|                                                                                      | Net cash used by investing activities |                                                  |         | (31,376 | )       |   |          | (19,960 | )       |   |          | (3,529 | )      
|FINANCING ACTIVITIES                                                                  |                                       |                                                  |         |         |         |   |          |         |         |   |          |       
|Proceeds from bank arrangements, net                                                  |                                       |                                                  | 8,342   |         |         |   | 18,013   |         |         |   | 112,000  |       
|Payments on long-term debt                                                            |                                       |                                                  | -0-     |         |         |   | (199,930 | )       |         |   | (126,898 | )     
|Issuance of 8.375% senior subordinated notes, net of
    deferred financing costs     |                                       |                                                  | -0-     |         |         |   | 205,179  |         |         |   | -0-      |       
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|                                                                                      |                                       | Net cash provided (used) by financing activities |         |         | 8,342   |   |          |         | 23,262  |   |          |        | (14,898 | )
|                                                                                      |                                       | Increase (decrease) in cash and cash equivalents |         |         | 11,461  |   |          |         | 4,216   |   |          |        | (6,609  | )
|                                                                                      |                                       | Cash and cash equivalents at beginning of year   |         |         | 6,407   |   |          |         | 2,191   |   |          |        | 8,800   |  
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|                                                                                      |                                       | Cash and cash equivalents at end of year         |         | $       | 17,868  |   |          | $       | 6,407   |   |          | $      | 2,191   |  
|                                                                                      |                                       |                                                  |         |         |         |   |          |         |        
|Income taxes paid (refunded)                                                          |                                       | $                                                | 881     |         |         | $ | 3,370    |         |         | $ | (1,038   | )     
|Interest paid                                                                         |                                       |                                                  | 24,173  |         |         |   | 28,891   |         |         |   | 25,213   |       



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


December 31, 2005, 2004 and 2003


(Dollars in thousands)


NOTE A  Summary of Significant Accounting
Policies


Consolidation:


Accounting Estimates:


Cash Equivalents:


Inventories: first-in,




| |                             
| | ----------------------------
| | Major Classes of Inventories

|                           |  |              |         |  |      |   |         | 
|-------------------------- |  | ------------ | ------- |  | ---- | - | ------- | 
|                           |  | December 31, |        
|                           |  |              |        
|                           |  | 2005         |         |  | 2004 |  
|                           |  |              |         |  |      |  
|Finished goods             |  | $            | 128,465 |  |      | $ | 121,832 | 
|Work in process            |  |              | 32,547  |  |      |   | 27,959  | 
|Raw materials and supplies |  |              | 29,541  |  |      |   | 27,503  | 
|                           |  |              |         |  |      |  
|                           |  | $            | 190,553 |  |      | $ | 177,294 | 
|                           |  |              |         |  |      |  

Property, Plant and Equipment: 3-16


Goodwill:


Pensions and Other Postretirement Benefits:


Accounting for Asset Retirement Obligations: long-term


31



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




Income Taxes:


Revenue Recognition:


Accounts Receivable:


Software Development Costs:


Concentration of Credit Risk:


Shipping and Handling Costs:


Environmental:


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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


Foreign Currency Translation:


Reclassification:


NOTE B  FAS 142, Goodwill and Other
Intangible Assets






|                  |  |                   |        |  |                   |   |        | 
|----------------- |  | ----------------- | ------ |  | ----------------- | - | ------ | 
|Reporting         |  | Goodwill at       |        |  | Goodwill at       |  
|Segment           |  | December 31, 2005 |        |  | December 31, 2004 |  
|                  |  |                   |        |  |                   |  
|ILS               |  | $                 | 66,188 |  |                   | $ | 66,050 | 
|Aluminum Products |  |                   | 16,515 |  |                   |   | 16,515 | 
|                  |  |                   |        |  |                   |  
|                  |  | $                 | 82,703 |  |                   | $ | 82,565 | 
|                  |  |                   |        |  |                   |  



NOTE C  Acquisitions


S-X.


|                                           |                     |   |       |        |  
|------------------------------------------ | ------------------- | - | ----- | ------ | -
|Cash acquisition price, less cash acquired |                     | $ | 4,698 |       
|Assets                                     |                     |   |       |       
|                                           | Accounts receivable |   |       | (2,640 | )
|                                           | Inventories         |   |       | (954   | )
|                                           | Prepaid expenses    |   |       | (97    | )
|                                           | Equipment           |   |       | (871   | )
|                                           | Other assets        |   |       | (545   | )
|Liabilities                                |                     |   |       |       
|                                           | Accrued expenses    |   |       | 409    |  
|                                           |                     |   |      
|Goodwill                                   |                     | $ | -0-   |       
|                                           |                     |   |      



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


S-X.


|                       |                     |   |       |         |  
|---------------------- | ------------------- | - | ----- | ------- | -
|Cash acquisition price |                     | $ | 7,000 |        
|Assets                 |                     |   |       |        
|                       | Accounts receivable |   |       | (10,894 | )
|                       | Inventories         |   |       | (10,606 | )
|                       | Prepaid expenses    |   |       | (1,201  | )
|                       | Equipment           |   |       | (407    | )
|Liabilities            |                     |   |       |        
|                       | Accounts payable    |   |       | 13,255  |  
|                       | Accrued expenses    |   |       | 2,370   |  
|                       | Note payable        |   |       | 483     |  
|                       |                     |   |      
|Goodwill               |                     | $ | -0-   |        
|                       |                     |   |      

95-3,


|                             |  |               |      |   |            |   |       |       |  |   |        |  
|---------------------------- |  | ------------- | ---- | - | ---------- | - | ----- | ----- |  | - | ------ | -
|                             |  | Severance     |      |   | Exit and   |   |       |      
|                             |  | and Personnel |      |   | Relocation |   |       | Total | 
|                             |  |               |      |   |            |   |       |       | 
|Balance at June 30, 2005     |  | $             | -0-  |   |            | $ | -0-   |       |  | $ | -0-    |  
|Add: Accruals                |  |               | 250  |   |            |   | 1,750 |       |  |   | 2,000  |  
|Less: Payments               |  |               | (551 | ) |            |   | (594  | )     |  |   | (1,145 | )
|Transfers                    |  |               | 400  |   |            |   | (400  | )     |  |   | -0-    |  
|                             |  |               |      |   |            |   |       |       | 
|Balance at December 31, 2005 |  | $             | 99   |   |            | $ | 756   |       |  | $ | 855    |  
|                             |  |               |      |   |            |   |       |       | 

S-X.




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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|                       |                        |   |        |         |  
|---------------------- | ---------------------- | - | ------ | ------- | -
|Cash acquisition price |                        | $ | 10,000 |        
|Assets                 |                        |   |        |        
|                       | Accounts receivable    |   |        | (8,948  | )
|                       | Inventories            |   |        | (2,044  | )
|                       | Property and equipment |   |        | (15,499 | )
|                       | Other                  |   |        | (115    | )
|Liabilities            |                        |   |        |        
|                       | Accounts payable       |   |        | 4,041   |  
|                       | Compensation accruals  |   |        | 3,825   |  
|                       | Other accruals         |   |        | 8,740   |  
|                       |                        |   |       
|Goodwill               |                        | $ | -0-    |        
|                       |                        |   |       



|                             |  |           |       |   |      |   |     |            |  |   |       |   |  |   |       |  
|---------------------------- |  | --------- | ----- | - | ---- | - | --- | ---------- |  | - | ----- | - |  | - | ----- | -
|                             |  | Severance |       |   | Exit |   |     | Relocation |  |   | Total |  
|                             |  |           |       |   |      |   |     |            |  |   |       |  
|Balance at June 30, 2004     |  | $         | -0-   |   |      | $ | -0- |            |  | $ | -0-   |   |  | $ | -0-   |  
|Add: Accruals                |  |           | 1,916 |   |      |   | 100 |            |  |   | 265   |   |  |   | 2,281 |  
|Less: Payments               |  |           | 295   |   |      |   | -0- |            |  |   | 2     |   |  |   | 297   |  
|                             |  |           |       |   |      |   |     |            |  |   |       |  
|Balance at December 31, 2004 |  |           | 1,621 |   |      |   | 100 |            |  |   | 263   |   |  |   | 1,984 |  
|Transfer                     |  |           | 0     |   |      |   | 48  |            |  |   | (48   | ) |  |   | 0     |  
|Adjustments                  |  |           | (612  | ) |      |   | 0   |            |  |   | (113  | ) |  |   | (725  | )
|Less: Payments               |  |           | 1,009 |   |      |   | 148 |            |  |   | 102   |   |  |   | 1,259 |  
|                             |  |           |       |   |      |   |     |            |  |   |       |  
|Balance at December 31, 2005 |  | $         | 0     |   |      | $ | 0   |            |  | $ | 0     |   |  | $ | 0     |  
|                             |  |           |       |   |      |   |     |            |  |   |       |  

S-X.


35



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


NOTE D  Other Assets




|                           |        |              |        |        |      |   |        |        | 
|-------------------------- | ------ | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                           |        | December 31, |       
|                           |        |              |       
|                           |        | 2005         |        |        | 2004 |  
|                           |        |              |        |        |      |  
|Pension assets             |        | $            | 47,164 |        |      | $ | 41,295 |       
|Idle assets                |        |              | 5,161  |        |      |   | 6,040  |       
|Deferred financing costs   |        |              | 7,048  |        |      |   | 7,846  |       
|Tooling                    |        |              | 3,327  |        |      |   | 3,570  |       
|Software development costs |        |              | 2,485  |        |      |   | 3,390  |       
|Other                      |        |              | 5,432  |        |      |   | 6,394  |       
|                           |        |              |        |        |      |  
|                           | Totals |              | $      | 70,617 |      |   | $      | 68,535 | 
|                           |        |              |        |        |      |  

NOTE E  Accrued Expenses




|                                            |        |              |        |        |      |   |        |        | 
|------------------------------------------- | ------ | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                                            |        | December 31, |       
|                                            |        |              |       
|                                            |        | 2005         |        |        | 2004 |  
|                                            |        |              |        |        |      |  
|Accrued salaries, wages and benefits        |        | $            | 16,435 |        |      | $ | 14,098 |       
|Advance billings                            |        |              | 21,969 |        |      |   | 10,059 |       
|Warranty, project and installation accruals |        |              | 4,391  |        |      |   | 5,660  |       
|Severance and exit costs                    |        |              | 1,451  |        |      |   | 2,175  |       
|Interest payable                            |        |              | 2,900  |        |      |   | 2,022  |       
|State and local taxes                       |        |              | 4,866  |        |      |   | 4,553  |       
|Sundry                                      |        |              | 16,301 |        |      |   | 21,178 |       
|                                            |        |              |        |        |      |  
|                                            | Totals |              | $      | 68,313 |      |   | $      | 59,745 | 
|                                            |        |              |        |        |      |  





|                                         |  |              |        |   |      |   |        |  
|---------------------------------------- |  | ------------ | ------ | - | ---- | - | ------ | -
|                                         |  | December 31, |       
|                                         |  |              |       
|                                         |  | 2005         |        |   | 2004 |  
|                                         |  |              |        |   |      |  
|Balance at beginning of year             |  | $            | 4,281  |   |      | $ | 5,614  |  
|Claims paid during the year              |  |              | (3,297 | ) |      |   | (4,708 | )
|Additional warranties issued during year |  |              | 2,593  |   |      |   | 2,874  |  
|Acquired warranty liabilities            |  |              | -0-    |   |      |   | 501    |  
|Other                                    |  |              | (11    | ) |      |   | -0-    |  
|                                         |  |              |        |   |      |  
|Balance at end of year                   |  | $            | 3,566  |   |      | $ | 4,281  |  
|                                         |  |              |        |   |      |  



36



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


NOTE F  Financing Arrangements




|                                                                                                |       |              |         |         |      |   |         |         | 
|----------------------------------------------------------------------------------------------- | ----- | ------------ | ------- | ------- | ---- | - | ------- | ------- | 
|                                                                                                |       | December 31, |        
|                                                                                                |       |              |        
|                                                                                                |       | 2005         |         |         | 2004 |  
|                                                                                                |       |              |         |         |      |  
|8.375% senior subordinated notes due 2014                                                       |       | $            | 210,000 |         |      | $ | 210,000 |        
|Revolving credit maturing on December 31, 2010                                                  |       |              | 128,300 |         |      |   | 120,600 |        
|Industrial development revenue bonds maturing in 2012 at
    interest rates from 2.00% to 4.15% |       |              | 3,586   |         |      |   | 4,041   |        
|Other                                                                                           |       |              | 4,763   |         |      |   | 3,666   |        
|                                                                                                |       |              |         |         |      |  
|                                                                                                |       |              | 346,649 |         |      |   | 338,307 |        
|Less current maturities                                                                         |       |              | 1,644   |         |      |   | 2,931   |        
|                                                                                                |       |              |         |         |      |  
|                                                                                                | Total |              | $       | 345,005 |      |   | $       | 335,376 | 
|                                                                                                |       |              |         |         |      |  











37



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued








NOTE G  Income Taxes




|                           |         |                         |        |        |      |   |       |       |   |   |     |     | 
|-------------------------- | ------- | ----------------------- | ------ | ------ | ---- | - | ----- | ----- | - | - | --- | --- | 
|                           |         | Year Ended December 31, |       
|                           |         |                         |       
|                           |         | 2005                    |        |        | 2004 |   |       | 2003  |  
|                           |         |                         |        |        |      |   |       |       |  
|Current payable (benefit): |         |                         |        |        |      |   |       |       |   |   |     |    
|                           | Federal |                         | $      | 165    |      |   | $     | (426  | ) |   | $   | -0- | 
|                           | State   |                         |        | 198    |      |   |       | 23    |   |   |     | 16  | 
|                           | Foreign |                         |        | 2,260  |      |   |       | 3,245 |   |   |     | 888 | 
|                           |         |                         |        |        |      |   |       |       |  
|                           |         |                         | 2,623  |        |      |   | 2,842 |       |   |   | 904 |    
|Deferred:                  |         |                         |        |        |      |   |       |       |   |   |     |    
|                           | Federal |                         |        | (7,300 | )    |   |       | -0-   |   |   |     | -0- | 
|                           | State   |                         |        | -0-    |      |   |       | -0-   |   |   |     | -0- | 
|                           | Foreign |                         |        | 354    |      |   |       | 558   |   |   |     | -0- | 
|                           |         |                         |        |        |      |   |       |       |  
|                           |         |                         | (6,946 | )      |      |   | 558   |       |   |   | -0- |    
|                           |         |                         |        |        |      |   |       |       |  
|Income taxes (benefit)     |         | $                       | (4,323 | )      |      | $ | 3,400 |       |   | $ | 904 |    
|                           |         |                         |        |        |      |   |       |       |  



|                             |  |                         |         |   |      |   |        |      |  |   |        |  
|---------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                             |  | Year Ended December 31, |        
|                             |  |                         |        
|                             |  | 2005                    |         |   | 2004 |   |        | 2003 | 
|                             |  |                         |         |   |      |   |        |      | 
|Computed statutory amount    |  | $                       | 9,189   |   |      | $ | 5,984  |      |  | $ | (3,712 | )
|Effect of state income taxes |  |                         | 65      |   |      |   | 16     |      |  |   | 11     |  
|Foreign rate differences     |  |                         | (151    | ) |      |   | 661    |      |  |   | 815    |  
|Medicare subsidy             |  |                         | (795    | ) |      |   | -0-    |      |  |   | -0-    |  
|Valuation allowance          |  |                         | (12,093 | ) |      |   | (3,042 | )    |  |   | 3,695  |  
|Other, net                   |  |                         | (538    | ) |      |   | (219   | )    |  |   | 95     |  
|                             |  |                         |         |   |      |   |        |      | 
|Income taxes (benefit)       |  | $                       | (4,323  | ) |      | $ | 3,400  |      |  | $ | 904    |  
|                             |  |                         |         |   |      |   |        |      | 

38



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|                                   |                                                 |                                |        |        |        |   |         |        |        | 
|---------------------------------- | ----------------------------------------------- | ------------------------------ | ------ | ------ | ------ | - | ------- | ------ | ------ | 
|                                   |                                                 | December 31,                   |       
|                                   |                                                 |                                |       
|                                   |                                                 | 2005                           |        |        | 2004   |  
|                                   |                                                 |                                |        |        |        |  
|Deferred tax assets:               |                                                 |                                |        |        |        |   |         |       
|                                   | Postretirement benefit obligation               |                                | $      | 7,542  |        |   | $       | 7,933  |       
|                                   | Inventory                                       |                                |        | 10,433 |        |   |         | 11,277 |       
|                                   | Net operating loss and tax credit carryforwards |                                |        | 18,996 |        |   |         | 20,384 |       
|                                   | Other  net                                     |                                |        | 12,246 |        |   |         | 11,867 |       
|                                   |                                                 |                                |        |        |        |  
|                                   |                                                 | Total deferred tax assets      |        |        | 49,217 |   |         |        | 51,461 | 
|Deferred tax liabilities:          |                                                 |                                |        |        |        |   |         |       
|                                   | Tax over book depreciation                      |                                |        | 15,578 |        |   |         | 15,492 |       
|                                   | Pension                                         |                                |        | 18,926 |        |   |         | 16,725 |       
|                                   | Deductible goodwill                             |                                |        | 2,251  |        |   |         | 1,087  |       
|                                   |                                                 |                                |        |        |        |  
|                                   |                                                 | Total deferred tax liabilities |        |        | 36,755 |   |         |        | 33,304 | 
|                                   |                                                 |                                |        |        |        |  
|                                   |                                                 |                                | 12,462 |        |        |   | 18,157  |       
|Valuation reserves                 |                                                 |                                | (7,011 | )      |        |   | (19,231 | )     
|                                   |                                                 |                                |        |        |        |  
|Net deferred tax asset (liability) |                                                 | $                              | 5,451  |        |        | $ | (1,074  | )     
|                                   |                                                 |                                |        |        |        |  









NOTE H  Legal Proceedings




39



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




NOTE I  Pensions and Postretirement Benefits




|                                                 |  |         |         |                |          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------ |  | ------- | ------- | -------------- | -------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                 |  |         |         | Postretirement |         
|                                                 |  | Pension |         |                | Benefits |  
|                                                 |  |         |         |                |          |  
|                                                 |  | 2005    |         |                | 2004     |   |         | 2005 |  |   | 2004    |  
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Change in benefit obligation                     |  |         |         |                |          |   |         |      |  |   |         |   |  |   |         |  
|Benefit obligation at beginning of year          |  | $       | 55,303  |                |          | $ | 53,075  |      |  | $ | 24,680  |   |  | $ | 27,366  |  
|Service cost                                     |  |         | 364     |                |          |   | 291     |      |  |   | 145     |   |  |   | 136     |  
|Curtailment and settlement                       |  |         | (1,023  | )              |          |   | -0-     |      |  |   | -0-     |   |  |   | -0-     |  
|Interest cost                                    |  |         | 3,194   |                |          |   | 3,320   |      |  |   | 1,281   |   |  |   | 1,532   |  
|Amendments                                       |  |         | -0-     |                |          |   | 566     |      |  |   | -0-     |   |  |   | -0-     |  
|Actuarial losses (gains)                         |  |         | 2,101   |                |          |   | 2,799   |      |  |   | 200     |   |  |   | (637    | )
|Benefits and expenses paid, net of contributions |  |         | (5,205  | )              |          |   | (4,748  | )    |  |   | (3,463  | ) |  |   | (3,717  | )
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Benefit obligation at end of year                |  | $       | 54,734  |                |          | $ | 55,303  |      |  | $ | 22,843  |   |  | $ | 24,680  |  
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Change in plan assets                            |  |         |         |                |          |   |         |      |  |   |         |   |  |   |         |  
|Fair value of plan assets at beginning of year   |  | $       | 103,948 |                |          | $ | 97,603  |      |  | $ | -0-     |   |  | $ | -0-     |  
|Actual return on plan assets                     |  |         | 3,919   |                |          |   | 11,093  |      |  |   | -0-     |   |  |   | -0-     |  
|Company contributions                            |  |         | -0-     |                |          |   | -0-     |      |  |   | 3,463   |   |  |   | 3,717   |  
|Curtailments and settlement                      |  |         | (1,023  | )              |          |   | -0-     |      |  |   | -0-     |   |  |   | -0-     |  
|Benefits and expenses paid, net of contributions |  |         | (5,205  | )              |          |   | (4,748  | )    |  |   | (3,463  | ) |  |   | (3,717  | )
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Fair value of plan assets at end of year         |  | $       | 101,639 |                |          | $ | 103,948 |      |  | $ | -0-     |   |  | $ | -0-     |  
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Funded (underfunded) status of the plan          |  | $       | 46,905  |                |          | $ | 48,645  |      |  | $ | (22,843 | ) |  | $ | (24,680 | )
|Unrecognized net transition obligation           |  |         | (386    | )              |          |   | (439    | )    |  |   | -0-     |   |  |   | -0-     |  
|Unrecognized net actuarial (gain) loss           |  |         | (13     | )              |          |   | (6,929  | )    |  |   | 4,734   |   |  |   | 4,639   |  
|Unrecognized prior service cost (benefit)        |  |         | 922     |                |          |   | 1,210   |      |  |   | (178    | ) |  |   | (247    | )
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  
|Net amount recognized at year end                |  | $       | 47,428  |                |          | $ | 42,487  |      |  | $ | (18,287 | ) |  | $ | (20,288 | )
|                                                 |  |         |         |                |          |   |         |      |  |   |         |  



|                                     |                                              |      |        |        |      |   |        |        | 
|------------------------------------ | -------------------------------------------- | ---- | ------ | ------ | ---- | - | ------ | ------ | 
|                                     |                                              | 2005 |        |        | 2004 |  
|                                     |                                              |      |        |        |      |  
|Prepaid pension cost                 |                                              | $    | 47,164 |        |      | $ | 41,295 |       
|Accrued pension cost                 |                                              |      | (5,491 | )      |      |   | (4,211 | )     
|Intangible asset                     |                                              |      | 397    |        |      |   | 565    |       
|Accumulated other comprehensive loss |                                              |      | 5,358  |        |      |   | 4,838  |       
|                                     |                                              |      |        |        |      |  
|                                     | Net amount recognized at the end of the year |      | $      | 47,428 |      |   | $      | 42,487 | 
|                                     |                                              |      |        |        |      |  

40



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|                  |  |             |       |             |      |  |      |      |  |  |      |  
|----------------- |  | ----------- | ----- | ----------- | ---- |  | ---- | ---- |  |  | ---- | -
|                  |  |             |       | Plan Assets |     
|                  |  |             |       |             |     
|                  |  | Target 2006 |       |             | 2005 |  |      | 2004 | 
|                  |  |             |       |             |      |  |      |      | 
|Asset Category    |  |             |       |             |      |  |      |      |  |  |      |  
|Equity securities |  |             | 60-70 | %           |      |  | 71.1 | %    |  |  | 66.7 | %
|Debt securities   |  |             | 20-30 |             |      |  | 19.7 |      |  |  | 20.5 |  
|Other             |  |             | 7-15  |             |      |  | 9.2  |      |  |  | 12.8 |  
|                  |  |             |       |             |      |  |      |      | 
|                  |  |             | 100   | %           |      |  | 100  | %    |  |  | 100  | %
|                  |  |             |       |             |      |  |      |      | 



|                               |  |                    |        |  |      |   |        | 
|------------------------------ |  | ------------------ | ------ |  | ---- | - | ------ | 
|                               |  | For the Year Ended |       
|                               |  | December 31,       |       
|                               |  |                    |       
|                               |  | 2005               |        |  | 2004 |  
|                               |  |                    |        |  |      |  
|Projected benefit obligation   |  | $                  | 17,476 |  |      | $ | 17,458 | 
|                               |  |                    |        |  |      |  
|Accumulated benefit obligation |  | $                  | 17,476 |  |      | $ | 17,458 | 
|                               |  |                    |        |  |      |  
|Fair value of plan assets      |  | $                  | 11,985 |  |      | $ | 13,247 | 
|                               |  |                    |        |  |      |  



|                               |  |                                    |      |                |          |  |      |      |  |  |      |   |  |      |      |   |      |  |      |   |  |  |      |  
|------------------------------ |  | ---------------------------------- | ---- | -------------- | -------- |  | ---- | ---- |  |  | ---- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                               |  | Weighted-Average assumptions as of |     
|                               |  | December 31,                       |     
|                               |  |                                    |     
|                               |  |                                    |      | Postretirement |         
|                               |  | Pension                            |      |                | Benefits | 
|                               |  |                                    |      |                |          | 
|                               |  | 2005                               |      |                | 2004     |  |      | 2003 |  |  | 2005 |   |  | 2004 |      |   | 2003 | 
|                               |  |                                    |      |                |          |  |      |      |  |  |      |   |  |      |      |   |      | 
|Discount rate                  |  |                                    | 5.50 | %              |          |  | 6.00 | %    |  |  | 6.50 | % |  |      | 5.50 | % |      |  | 6.00 | % |  |  | 6.50 | %
|Expected return on plan assets |  |                                    | 8.75 | %              |          |  | 8.75 | %    |  |  | 8.75 | % |  |      | N/A  |   |      |  | N/A  |   |  |  | N/A  |  
|Rate of compensation increase  |  |                                    | N/A  |                |          |  | N/A  |      |  |  | 2.00 | % |  |      | N/A  |   |      |  | N/A  |   |  |  | N/A  |  



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|                                        |  |                  |        |   |                |   |        |      |  |   |        |   |  |      |       |   |      |   |       |   |  |   |       |  
|--------------------------------------- |  | ---------------- | ------ | - | -------------- | - | ------ | ---- |  | - | ------ | - |  | ---- | ----- | - | ---- | - | ----- | - |  | - | ----- | -
|                                        |  | Pension Benefits |        |   | Other Benefits |  
|                                        |  |                  |        |   |                |  
|                                        |  | 2005             |        |   | 2004           |   |        | 2003 |  |   | 2005   |   |  | 2004 |       |   | 2003 |  
|                                        |  |                  |        |   |                |   |        |      |  |   |        |   |  |      |       |   |      |  
|Components of net periodic benefit cost |  |                  |        |   |                |   |        |      |  |   |        |   |  |      |       |   |      |   |       |   |  |   |       |  
|Service costs                           |  | $                | 364    |   |                | $ | 291    |      |  | $ | 545    |   |  | $    | 145   |   |      | $ | 136   |   |  | $ | 147   |  
|Interest costs                          |  |                  | 3,194  |   |                |   | 3,320  |      |  |   | 3,498  |   |  |      | 1,281 |   |      |   | 1,532 |   |  |   | 1,701 |  
|Expected return on plan assets          |  |                  | (8,804 | ) |                |   | (8,313 | )    |  |   | (7,229 | ) |  |      | -0-   |   |      |   | -0-   |   |  |   | -0-   |  
|Transition obligation                   |  |                  | (49    | ) |                |   | (49    | )    |  |   | (49    | ) |  |      | -0-   |   |      |   | -0-   |   |  |   | -0-   |  
|Amortization of prior service cost      |  |                  | 163    |   |                |   | 129    |      |  |   | 257    |   |  |      | (69   | ) |      |   | (80   | ) |  |   | (80   | )
|Recognized net actuarial (gain) loss    |  |                  | (224   | ) |                |   | (286   | )    |  |   | 361    |   |  |      | 106   |   |      |   | 99    |   |  |   | 43    |  
|                                        |  |                  |        |   |                |   |        |      |  |   |        |   |  |      |       |   |      |  
|Benefit (income) costs                  |  | $                | (5,356 | ) |                | $ | (4,908 | )    |  | $ | (2,617 | ) |  | $    | 1,463 |   |      | $ | 1,687 |   |  | $ | 1,811 |  
|                                        |  |                  |        |   |                |   |        |      |  |   |        |   |  |      |       |   |      |  



|             |  |          |        |  |          |   |       |                  |  |   |       | 
|------------ |  | -------- | ------ |  | -------- | - | ----- | ---------------- |  | - | ----- | 
|             |  | Pension  |        |  | Other    |   |       | Payments due to  | 
|             |  | Benefits |        |  | Benefits |   |       | Medicare Subsidy | 
|             |  |          |        |  |          |   |       |                  | 
|2006         |  | $        | 4,534  |  |          | $ | 2,517 |                  |  | $ | 231   | 
|2007         |  |          | 4,374  |  |          |   | 2,465 |                  |  |   | 237   | 
|2008         |  |          | 4,300  |  |          |   | 2,450 |                  |  |   | 270   | 
|2009         |  |          | 4,290  |  |          |   | 2,364 |                  |  |   | 242   | 
|2010         |  |          | 4,240  |  |          |   | 2,304 |                  |  |   | 241   | 
|2011 to 2015 |  |          | 20,087 |  |          |   | 9,881 |                  |  |   | 1,080 | 





|                                                                         |  |              |       |  |              |   |        |  
|------------------------------------------------------------------------ |  | ------------ | ----- |  | ------------ | - | ------ | -
|                                                                         |  | 1-Percentage |       |  | 1-Percentage |  
|                                                                         |  | Point        |       |  | Point        |  
|                                                                         |  | Increase     |       |  | Decrease     |  
|                                                                         |  |              |       |  |              |  
|Effect on total of service and interest cost components in 2005          |  | $            | 127   |  |              | $ | (107   | )
|Effect on post retirement benefit obligation as of
    December 31, 2005 |  | $            | 1,886 |  |              | $ | (1,601 | )



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


NOTE J  Leases




NOTE K  Industry Segments








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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


|                                       |                       |                         |         |         |      |   |         |         |   |   |         |         |  
|-------------------------------------- | --------------------- | ----------------------- | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | -
|                                       |                       | Year Ended December 31, |        
|                                       |                       |                         |        
|                                       |                       | 2005                    |         |         | 2004 |   |         | 2003    |  
|                                       |                       |                         |         |         |      |   |         |         |  
|Net sales:                             |                       |                         |         |         |      |   |         |         |   |   |         |        
|                                       | ILS                   |                         | $       | 532,624 |      |   | $       | 453,223 |   |   | $       | 377,645 |  
|                                       | Aluminum Products     |                         |         | 159,053 |      |   |         | 135,402 |   |   |         | 90,080  |  
|                                       | Manufactured Products |                         |         | 241,223 |      |   |         | 220,093 |   |   |         | 156,570 |  
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       | $                       | 932,900 |         |      | $ | 808,718 |         |   | $ | 624,295 |        
|                                       |                       |                         |         |         |      |   |         |         |  
|Income (loss) before income taxes:     |                       |                         |         |         |      |   |         |         |   |   |         |        
|                                       | ILS                   |                         | $       | 34,814  |      |   | $       | 29,191  |   |   | $       | 24,893  |  
|                                       | Aluminum Products     |                         |         | 9,103   |      |   |         | 9,021   |   |   |         | 10,201  |  
|                                       | Manufactured Products |                         |         | 20,630  |      |   |         | 18,890  |   |   |         | (13,759 | )
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       |                         | 64,547  |         |      |   | 57,102  |         |   |   | 21,335  |        
|                                       | Corporate costs       |                         |         | (10,241 | )    |   |         | (7,756  | ) |   |         | (5,803  | )
|                                       | Interest expense      |                         |         | (27,056 | )    |   |         | (31,413 | ) |   |         | (26,151 | )
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       | $                       | 27,250  |         |      | $ | 17,933  |         |   | $ | (10,619 | )      
|                                       |                       |                         |         |         |      |   |         |         |  
|Identifiable assets:                   |                       |                         |         |         |      |   |         |         |   |   |         |        
|                                       | ILS                   |                         | $       | 323,176 |      |   | $       | 297,002 |   |   | $       | 267,361 |  
|                                       | Aluminum Products     |                         |         | 104,618 |      |   |         | 105,535 |   |   |         | 88,031  |  
|                                       | Manufactured Products |                         |         | 169,004 |      |   |         | 163,230 |   |   |         | 121,331 |  
|                                       | General corporate     |                         |         | 71,056  |      |   |         | 46,080  |   |   |         | 32,821  |  
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       | $                       | 667,854 |         |      | $ | 611,847 |         |   | $ | 509,544 |        
|                                       |                       |                         |         |         |      |   |         |         |  
|Depreciation and amortization expense: |                       |                         |         |         |      |   |         |         |   |   |         |        
|                                       | ILS                   |                         | $       | 4,575   |      |   | $       | 4,608   |   |   | $       | 4,868   |  
|                                       | Aluminum Products     |                         |         | 7,484   |      |   |         | 5,858   |   |   |         | 5,342   |  
|                                       | Manufactured Products |                         |         | 4,986   |      |   |         | 4,728   |   |   |         | 5,050   |  
|                                       | General corporate     |                         |         | 216     |      |   |         | 191     |   |   |         | 219     |  
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       | $                       | 17,261  |         |      | $ | 15,385  |         |   | $ | 15,479  |        
|                                       |                       |                         |         |         |      |   |         |         |  
|Capital expenditures:                  |                       |                         |         |         |      |   |         |         |   |   |         |        
|                                       | ILS                   |                         | $       | 2,070   |      |   | $       | 3,691   |   |   | $       | 3,017   |  
|                                       | Aluminum Products     |                         |         | 10,473  |      |   |         | 5,497   |   |   |         | 1,878   |  
|                                       | Manufactured Products |                         |         | 7,266   |      |   |         | 720     |   |   |         | 5,867   |  
|                                       | General corporate     |                         |         | 486     |      |   |         | 55      |   |   |         | 107     |  
|                                       |                       |                         |         |         |      |   |         |         |  
|                                       |                       | $                       | 20,295  |         |      | $ | 9,963   |         |   | $ | 10,869  |        
|                                       |                       |                         |         |         |      |   |         |         |  



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|              |  |              |     |   |      |  |     |      |  |  |     |  
|------------- |  | ------------ | --- | - | ---- |  | --- | ---- |  |  | --- | -
|              |  | Year Ended   |    
|              |  | December 31, |    
|              |  |              |    
|              |  | 2005         |     |   | 2004 |  |     | 2003 | 
|              |  |              |     |   |      |  |     |      | 
|United States |  |              | 79  | % |      |  | 74  | %    |  |  | 83  | %
|Canada        |  |              | 7   | % |      |  | 9   | %    |  |  | 8   | %
|Other         |  |              | 14  | % |      |  | 17  | %    |  |  | 9   | %
|              |  |              |     |   |      |  |     |      | 
|              |  |              | 100 | % |      |  | 100 | %    |  |  | 100 | %
|              |  |              |     |   |      |  |     |      | 



NOTE L  Accumulated Comprehensive Loss




|                                        |       |              |        |       |      |   |        |       | 
|--------------------------------------- | ----- | ------------ | ------ | ----- | ---- | - | ------ | ----- | 
|                                        |       | December 31, |       
|                                        |       |              |       
|                                        |       | 2005         |        |       | 2004 |  
|                                        |       |              |        |       |      |  
|Foreign currency translation adjustment |       | $            | (3,256 | )     |      | $ | (3,162 | )    
|Minimum pension liability               |       |              | 5,358  |       |      |   | 4,838  |      
|                                        |       |              |        |       |      |  
|                                        | Total |              | $      | 2,102 |      |   | $      | 1,676 | 
|                                        |       |              |        |       |      |  

NOTE M  Restructuring and Unusual Charges




|                      |  |          |     |  |            |   |        |               |  |   |             |  |  |       |       |  |  |   |        | 
|--------------------- |  | -------- | --- |  | ---------- | - | ------ | ------------- |  | - | ----------- |  |  | ----- | ----- |  |  | - | ------ | 
|                      |  | Cost of  |     |  |            |   |        |               |  |   |            
|                      |  | Products |     |  | Asset      |   |        | Restructuring |  |   | Pension     |  |  |      
|                      |  | Sold     |     |  | Impairment |   |        | & Severance   |  |   | Curtailment |  |  | Total |      
|                      |  |          |     |  |            |   |        |               |  |   |             |  |  |       |      
|Manufactured Products |  | $        | 638 |  |            | $ | 16,051 |               |  | $ | 990         |  |  | $     | 1,600 |  |  | $ | 19,279 | 
|Aluminum Products     |  |          | -0- |  |            |   | -0-    |               |  |   | -0-         |  |  |       | 167   |  |  |   | 167    | 
|                      |  |          |     |  |            |   |        |               |  |   |             |  |  |       |      
|                      |  | $        | 638 |  |            | $ | 16,051 |               |  | $ | 990         |  |  | $     | 1,767 |  |  | $ | 19,446 | 
|                      |  |          |     |  |            |   |        |               |  |   |             |  |  |       |      



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




|                      |  |          |     |  |            |   |     |               |  |   |             |  |  |       |     |  |  |   |       | 
|--------------------- |  | -------- | --- |  | ---------- | - | --- | ------------- |  | - | ----------- |  |  | ----- | --- |  |  | - | ----- | 
|                      |  | Cost of  |     |  |            |   |     |               |  |   |            
|                      |  | Products |     |  | Asset      |   |     | Restructuring |  |   | Pension     |  |  |      
|                      |  | Sold     |     |  | Impairment |   |     | & Severance   |  |   | Curtailment |  |  | Total |    
|                      |  |          |     |  |            |   |     |               |  |   |             |  |  |       |    
|Manufactured Products |  | $        | 833 |  |            | $ | -0- |               |  | $ | 400         |  |  | $     | 152 |  |  | $ | 1,385 | 
|Aluminum Products     |  |          | -0- |  |            |   | 391 |               |  |   | -0-         |  |  |       | -0- |  |  |   | 391   | 
|                      |  |          |     |  |            |   |     |               |  |   |             |  |  |       |    
|                      |  | $        | 833 |  |            | $ | 391 |               |  | $ | 400         |  |  | $     | 152 |  |  | $ | 1,776 | 
|                      |  |          |     |  |            |   |     |               |  |   |             |  |  |       |    



|                                            |  |   |        |  
|------------------------------------------- |  | - | ------ | -
|Balance at January 1, 2003                  |  | $ | 4,045  |  
|Severance and exit charges recorded in 2003 |  |   | 990    |  
|Cash payments made in 2003                  |  |   | (2,500 | )
|                                            |  |   |       
|Balance at December 31, 2003                |  |   | 2,535  |  
|Severance and exit charges recorded in 2004 |  |   | -0-    |  
|Cash payments made in 2004                  |  |   | (2,073 | )
|                                            |  |   |       
|Balance at December 31, 2004                |  |   | 462    |  
|Exit charges recorded in 2005               |  |   | 400    |  
|Cash payments made in 2005                  |  |   | (266   | )
|                                            |  |   |       
|Balance at December 31, 2005                |  | $ | 596    |  
|                                            |  |   |       







NOTE N  Derivatives and Hedging






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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued




NOTE O  Supplemental Guarantor Information


wholly-owned 3-10(h)(1) S-X.


Park-Ohio


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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2005


|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |         |         | 
|------------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | ------- | --------- | ------------ | - | ------------- | ------------ | ------- | ------------------ | ------------ | ------ | ------ | ------------ | -------- | ------- | ---------- | - | ------- | ------- | ------- | 
|                                            |                                                               |                                            |         | Combined  |              |   | Combined      |              |         |                    |              |       
|                                            |                                                               |                                            |         | Guarantor |              |   | Non-Guarantor |              |         | Reclassifications/ |              |        |       
|                                            |                                                               | Parent                                     |         |           | Subsidiaries |   |               | Subsidiaries |         |                    | Eliminations |        |        | Consolidated |         
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | (In thousands)                             |        
|ASSETS                                     
|Current assets:                             |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Cash and cash equivalents                                     |                                            | $       | (11,036   | )            |   | $             | 626          |         |                    | $            | 11,899 |        |              | $        | 16,379  |            |   | $       | 17,868  |        
|                                            | Accounts receivable, net                                      |                                            |         | -0-       |              |   |               | 129,302      |         |                    |              | 24,200 |        |              |          | -0-     |            |   |         | 153,502 |        
|                                            | Inventories                                                   |                                            |         | -0-       |              |   |               | 160,775      |         |                    |              | 29,778 |        |              |          | -0-     |            |   |         | 190,553 |        
|                                            | Other current assets                                          |                                            |         | 464       |              |   |               | 20,029       |         |                    |              | 1,147  |        |              |          | 6,113   |            |   |         | 27,753  |        
|                                            | Deferred tax assets                                           |                                            |         | -0-       |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | 8,627   |            |   |         | 8,627   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Assets                       |         |           | (10,572      | ) |               |              | 310,732 |                    |              |        | 67,024 |              |          |         | 31,119     |   |         |         | 398,303 | 
|Investment in subsidiaries                  |                                                               |                                            | 290,802 |           |              |   | -0-           |              |         |                    | -0-          |        |        |              | (290,802 | )       |            |   | -0-     |        
|Inter-company advances                      |                                                               |                                            | 359,963 |           |              |   | 372,156       |              |         |                    | 8,208        |        |        |              | (740,327 | )       |            |   | -0-     |        
|Property, Plant and Equipment, net          |                                                               |                                            | 2,536   |           |              |   | 101,175       |              |         |                    | 12,520       |        |        |              | -0-      |         |            |   | 116,231 |        
|Other Assets:                               |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Goodwill                                                      |                                            |         | -0-       |              |   |               | 78,424       |         |                    |              | 4,279  |        |              |          | -0-     |            |   |         | 82,703  |        
|                                            | Other                                                         |                                            |         | 34,724    |              |   |               | 37,530       |         |                    |              | 686    |        |              |          | (2,323  | )          |   |         | 70,617  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Other Assets                         |         |           | 34,724       |   |               |              | 115,954 |                    |              |        | 4,965  |              |          |         | (2,323     | ) |         |         | 153,320 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Assets                               |         | $         | 677,453      |   |               | $            | 900,017 |                    |              | $      | 92,717 |              |          | $       | (1,002,333 | ) |         | $       | 667,854 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                           
|LIABILITIES AND SHAREHOLDERS EQUITY       
|Current Liabilities:                        |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Trade accounts payable                                        |                                            | $       | 3,348     |              |   | $             | 87,666       |         |                    | $            | 9,778  |        |              | $        | 14,604  |            |   | $       | 115,396 |        
|                                            | Accrued expenses                                              |                                            |         | 1,643     |              |   |               | 46,847       |         |                    |              | 14,763 |        |              |          | 5,060   |            |   |         | 68,313  |        
|                                            | Current portion of long-term liabilities                      |                                            |         | -0-       |              |   |               | 11,054       |         |                    |              | 590    |        |              |          | (7,483  | )          |   |         | 4,161   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Liabilities                  |         |           | 4,991        |   |               |              | 145,567 |                    |              |        | 25,131 |              |          |         | 12,181     |   |         |         | 187,870 | 
|Long-Term Liabilities, less current portion |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | 8.375% Senior Subordinated Notes due 2014                     |                                            |         | 210,000   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |            |   |         | 210,000 |        
|                                            | Revolving credit maturing on December 31, 2010                |                                            |         | 128,300   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |            |   |         | 128,300 |        
|                                            | Other long-term debt                                          |                                            |         | -0-       |              |   |               | 34,533       |         |                    |              | 3,140  |        |              |          | (30,968 | )          |   |         | 6,705   |        
|                                            | Deferred tax liability                                        |                                            |         | -0-       |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | 3,176   |            |   |         | 3,176   |        
|                                            | Other postretirement benefits and other long-term liabilities |                                            |         | 4,115     |              |   |               | 21,501       |         |                    |              | 3,076  |        |              |          | (2,518  | )          |   |         | 26,174  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Long-Term Liabilities                |         |           | 342,415      |   |               |              | 56,034  |                    |              |        | 6,216  |              |          |         | (30,310    | ) |         |         | 374,355 | 
|Inter-company advances                      |                                                               |                                            | 227,614 |           |              |   | 415,558       |              |         |                    | 17,674       |        |        |              | (660,846 | )       |            |   | -0-     |        
|Shareholders Equity                        |                                                               |                                            | 102,433 |           |              |   | 282,858       |              |         |                    | 43,696       |        |        |              | (323,358 | )       |            |   | 105,629 |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Liabilities and Shareholders Equity |         | $         | 677,453      |   |               | $            | 900,017 |                    |              | $      | 92,717 |              |          | $       | (1,002,333 | ) |         | $       | 667,854 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         

48



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2004


|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |          |   |         |         |         | 
|------------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | ------- | --------- | ------------ | - | ------------- | ------------ | ------- | ------------------ | ------------ | ------ | ------ | ------------ | -------- | ------- | -------- | - | ------- | ------- | ------- | 
|                                            |                                                               |                                            |         | Combined  |              |   | Combined      |              |         |                    |              |       
|                                            |                                                               |                                            |         | Guarantor |              |   | Non-Guarantor |              |         | Reclassifications/ |              |        |       
|                                            |                                                               | Parent                                     |         |           | Subsidiaries |   |               | Subsidiaries |         |                    | Eliminations |        |        | Consolidated |         
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | (In thousands)                             |        
|ASSETS                                     
|Current assets:                             |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |          |   |         |        
|                                            | Cash and cash equivalents                                     |                                            | $       | (14,387   | )            |   | $             | 199          |         |                    | $            | 6,851  |        |              | $        | 13,744  |          |   | $       | 6,407   |        
|                                            | Accounts receivable, net                                      |                                            |         | 114       |              |   |               | 117,097      |         |                    |              | 30,208 |        |              |          | (1,944  | )        |   |         | 145,475 |        
|                                            | Inventories                                                   |                                            |         | (81       | )            |   |               | 151,187      |         |                    |              | 26,188 |        |              |          | -0-     |          |   |         | 177,294 |        
|                                            | Other current assets                                          |                                            |         | 499       |              |   |               | 12,215       |         |                    |              | 1,799  |        |              |          | 6,142   |          |   |         | 20,655  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Assets                       |         |           | (13,855      | ) |               |              | 280,698 |                    |              |        | 65,046 |              |          |         | 17,942   |   |         |         | 349,831 | 
|Investment in subsidiaries                  |                                                               |                                            | 341,088 |           |              |   | -0-           |              |         |                    | -0-          |        |        |              | (341,088 | )       |          |   | -0-     |        
|Inter-company advances                      |                                                               |                                            | 251,357 |           |              |   | 224,918       |              |         |                    | 5,145        |        |        |              | (481,420 | )       |          |   | -0-     |        
|Property, Plant and Equipment, net          |                                                               |                                            | 2,266   |           |              |   | 95,494        |              |         |                    | 12,121       |        |        |              | -0-      |         |          |   | 109,881 |        
|Other Assets:                               |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |          |   |         |        
|                                            | Goodwill                                                      |                                            |         | -0-       |              |   |               | 78,424       |         |                    |              | 4,141  |        |              |          | -0-     |          |   |         | 82,565  |        
|                                            | Net assets held for sale                                      |                                            |         | -0-       |              |   |               | 1,035        |         |                    |              | -0-    |        |              |          | -0-     |          |   |         | 1,035   |        
|                                            | Other                                                         |                                            |         | 43,908    |              |   |               | 37,316       |         |                    |              | 1,490  |        |              |          | (14,179 | )        |   |         | 68,535  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Other Assets                         |         |           | 43,908       |   |               |              | 116,775 |                    |              |        | 5,631  |              |          |         | (14,179  | ) |         |         | 152,135 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Assets                               |         | $         | 624,764      |   |               | $            | 717,885 |                    |              | $      | 87,943 |              |          | $       | (818,745 | ) |         | $       | 611,847 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                           
|LIABILITIES AND SHAREHOLDERS EQUITY       
|Current Liabilities:                        |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |          |   |         |        
|                                            | Trade accounts payable                                        |                                            | $       | 4,347     |              |   | $             | 87,291       |         |                    | $            | 16,130 |        |              | $        | 1,094   |          |   | $       | 108,862 |        
|                                            | Accrued expenses                                              |                                            |         | 6,291     |              |   |               | 44,529       |         |                    |              | 8,925  |        |              |          | -0-     |          |   |         | 59,745  |        
|                                            | Current portion of long-term liabilities                      |                                            |         | -0-       |              |   |               | 587          |         |                    |              | 2,344  |        |              |          | 2,881   |          |   |         | 5,812   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Liabilities                  |         |           | 10,638       |   |               |              | 132,407 |                    |              |        | 27,399 |              |          |         | 3,975    |   |         |         | 174,419 | 
|Long-Term Liabilities, less current portion |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |          |   |         |        
|                                            | 8.375% Senior Subordinated Notes due 2014                     |                                            |         | 210,000   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |          |   |         | 210,000 |        
|                                            | Revolving credit maturing on December 31, 2010                |                                            |         | 120,600   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |          |   |         | 120,600 |        
|                                            | Other long-term debt                                          |                                            |         | -0-       |              |   |               | 35,037       |         |                    |              | 707    |        |              |          | (30,968 | )        |   |         | 4,776   |        
|                                            | Deferred tax liability                                        |                                            |         | 1,074     |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |          |   |         | 1,074   |        
|                                            | Other postretirement benefits and other long-term liabilities |                                            |         | 4,241     |              |   |               | 21,875       |         |                    |              | 3,261  |        |              |          | (2,881  | )        |   |         | 26,496  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Long-Term Liabilities                |         |           | 335,915      |   |               |              | 56,912  |                    |              |        | 3,968  |              |          |         | (33,849  | ) |         |         | 362,946 | 
|Inter-company advances                      |                                                               |                                            | 206,503 |           |              |   | 242,202       |              |         |                    | 17,425       |        |        |              | (466,130 | )       |          |   | -0-     |        
|Shareholders Equity                        |                                                               |                                            | 71,708  |           |              |   | 286,364       |              |         |                    | 39,151       |        |        |              | (322,741 | )       |          |   | 74,482  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Liabilities and Shareholders Equity |         | $         | 624,764      |   |               | $            | 717,885 |                    |              | $      | 87,943 |              |          | $       | (818,745 | ) |         | $       | 611,847 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         

49



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF INCOME


For the Year Ended December 31, 2005


|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ------ |  | ------------ | ------ | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |       
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |       
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |        |  | Consolidated |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 827,815       |              |  | $ | 114,179      |        |  | $            | (9,094 | )   |  | $ | 932,900 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 715,057       |              |  |   | 90,320       |        |  |              | (9,094 | )   |  |   | 796,283 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       
|Gross profit               |                                              |                | -0-    |           |              |   | 112,758       |              |  |   | 23,859       |        |  |              | -0-    |     |  |   | 136,617 |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | 3,349     |              |   |               | 62,394       |  |   |              | 15,025 |  |              |        | 600 |  |   |         | 81,368 | 
|                           | Restructuring and impairment charges         |                |        | -0-       |              |   |               | 943          |  |   |              | -0-    |  |              |        | -0- |  |   |         | 943    | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       
|Operating Income           |                                              |                | (3,349 | )         |              |   | 49,421        |              |  |   | 8,834        |        |  |              | (600   | )   |  |   | 54,306  |       
|Interest expense           |                                              |                | (5,346 | )         |              |   | 31,442        |              |  |   | 1,560        |        |  |              | (600   | )   |  |   | 27,056  |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       
|Income before income taxes |                                              |                | 1,997  |           |              |   | 17,979        |              |  |   | 7,274        |        |  |              | -0-    |     |  |   | 27,250  |       
|Income taxes               |                                              |                | (7,439 | )         |              |   | 59            |              |  |   | 3,057        |        |  |              | -0-    |     |  |   | (4,323  | )     
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       
|                           | Net income                                   |                | $      | 9,436     |              |   | $             | 17,920       |  |   | $            | 4,217  |  |              | $      | -0- |  |   | $       | 31,573 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |       

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF INCOME


For the Year Ended December 31, 2004


|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |         |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ------ |  | ------------ | ------- | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |       
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |       
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |        |  | Consolidated |        
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 697,888       |              |  | $ | 123,827      |        |  | $            | (12,997 | )   |  | $ | 808,718 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 599,379       |              |  |   | 96,276       |        |  |              | (12,997 | )   |  |   | 682,658 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        
|Gross profit               |                                              |                | -0-    |           |              |   | 98,509        |              |  |   | 27,551       |        |  |              | -0-     |     |  |   | 126,060 |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |         |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | (22,748   | )            |   |               | 82,657       |  |   |              | 16,605 |  |              |         | 200 |  |   |         | 76,714 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        
|Operating Income           |                                              |                | 22,748 |           |              |   | 15,852        |              |  |   | 10,946       |        |  |              | (200    | )   |  |   | 49,346  |       
|Interest expense           |                                              |                | 30,954 |           |              |   | 439           |              |  |   | 220          |        |  |              | (200    | )   |  |   | 31,413  |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        
|Income before income taxes |                                              |                | (8,206 | )         |              |   | 15,413        |              |  |   | 10,726       |        |  |              | -0-     |     |  |   | 17,933  |       
|Income taxes               |                                              |                | 318    |           |              |   | -0-           |              |  |   | 3,082        |        |  |              | -0-     |     |  |   | 3,400   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        
|                           | Net income                                   |                | $      | (8,524    | )            |   | $             | 15,413       |  |   | $            | 7,644  |  |              | $       | -0- |  |   | $       | 14,533 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |        |  |              |        

50



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF OPERATIONS


For the Year Ended December 31, 2003


|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |        |     |  |   |         |         |  
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ |  | ------------ | ------ | --- |  | - | ------- | ------- | -
|                           |                                              |                |        | Combined  |              |   | Combined      |              |   |   |              |       
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |  | Consolidated |       
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 546,002       |              |   | $ | 84,298       |        |  | $            | (6,005 | )   |  | $ | 624,295 |        
|Cost of sales              |                                              |                | -0-    |           |              |   | 463,984       |              |   |   | 69,607       |        |  |              | (6,005 | )   |  |   | 527,586 |        
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       
|Gross profit               |                                              |                | -0-    |           |              |   | 82,018        |              |   |   | 14,691       |        |  |              | -0-    |     |  |   | 96,709  |        
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |        |     |  |   |         |        
|                           | Selling, general and administrative expenses |                |        | 2,094     |              |   |               | 48,682       |   |   |              | 11,593 |  |              |        | -0- |  |   |         | 62,369  |  
|                           | Restructuring and impairment charges         |                |        | -0-       |              |   |               | 18,553       |   |   |              | 255    |  |              |        | -0- |  |   |         | 18,808  |  
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       
|Operating Income           |                                              |                | (2,094 | )         |              |   | 14,783        |              |   |   | 2,843        |        |  |              | -0-    |     |  |   | 15,532  |        
|Interest expense           |                                              |                | 1,239  |           |              |   | 23,781        |              |   |   | 1,131        |        |  |              | -0-    |     |  |   | 26,151  |        
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       
|Income before income taxes |                                              |                | (3,333 | )         |              |   | (8,998        | )            |   |   | 1,712        |        |  |              | -0-    |     |  |   | (10,619 | )      
|Income taxes               |                                              |                | 16     |           |              |   | -0-           |              |   |   | 888          |        |  |              | -0-    |     |  |   | 904     |        
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       
|                           | Net income                                   |                | $      | (3,349    | )            |   | $             | (8,998       | ) |   | $            | 824    |  |              | $      | -0- |  |   | $       | (11,523 | )
|                           |                                              |                |        |           |              |   |               |              |   |   |              |        |  |              |       

51



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


For the Year Ended December 31, 2005


|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |         |  
|------------------------------------------------- | ----------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ | - | ------------ | --- | --- |  | - | ------- | ------- | -
|                                                  |                                                 |                |        | Combined  |              |   | Combined      |              |   |   |              |       
|                                                  |                                                 |                |        | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                                                  |                                                 | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |   | Consolidated |    
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    
|                                                  |                                                 | (In thousands) |       
|Net cash provided (used ) by operations           |                                                 | $              | (1,228 | )         |              | $ | 29,314        |              |   | $ | 6,409        |        |   | $            | -0- |     |  | $ | 34,495  |        
|Cash flows from investing activities:             |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |        
|                                                  | Purchases of property, plant and equipment, net |                |        | (486      | )            |   |               | (17,769      | ) |   |              | (2,040 | ) |              |     | -0- |  |   |         | (20,295 | )
|                                                  | Acquisitions, net of cash acquired              |                |        | -0-       |              |   |               | (12,181      | ) |   |              | -0-    |   |              |     | -0- |  |   |         | (12,181 | )
|                                                  | Proceeds from sale of assets held for sale      |                |        | -0-       |              |   |               | 1,100        |   |   |              | -0-    |   |              |     | -0- |  |   |         | 1,100   |  
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used ) in investing activities |                                                 |                | (486   | )         |              |   | (28,850       | )            |   |   | (2,040       | )      |   |              | -0- |     |  |   | (31,376 | )      
|Cash flows from financing activities:             |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |        
|Proceeds from bank arrangements, net              |                                                 |                | 7,700  |           |              |   | (37           | )            |   |   | 679          |        |   |              | -0- |     |  |   | 8,342   |        
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used ) by financing activities |                                                 |                | 7,700  |           |              |   | (37           | )            |   |   | 679          |        |   |              | -0- |     |  |   | 8,342   |        
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    
|Increase (decrease) in cash and cash equivalents  |                                                 |                | 5,986  |           |              |   | 427           |              |   |   | 5,048        |        |   |              | -0- |     |  |   | 11,461  |        
|Cash and cash equivalents at beginning of year    |                                                 |                | (643   | )         |              |   | 199           |              |   |   | 6,851        |        |   |              | -0- |     |  |   | 6,407   |        
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    
|Cash and cash equivalents at end of year          |                                                 | $              | 5,343  |           |              | $ | 626           |              |   | $ | 11,899       |        |   | $            | -0- |     |  | $ | 17,868  |        
|                                                  |                                                 |                |        |           |              |   |               |              |   |   |              |        |   |              |    

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


For the Year Ended December 31, 2004


|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |          |  
|------------------------------------------------- | -------------------------------------------------------------- | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ | - | ------------ | --- | --- |  | - | ------- | -------- | -
|                                                  |                                                                |                |         | Combined  |              |   | Combined      |              |   |   |              |       
|                                                  |                                                                |                |         | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                                                  |                                                                | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |   | Consolidated |    
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|                                                  |                                                                | (In thousands) |        
|Net cash provided (used ) by operations           |                                                                | $              | (24,045 | )         |              | $ | 18,123        |              |   | $ | 6,836        |        |   | $            | -0- |     |  | $ | 914     |         
|Cash flows from investing activities:             |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |         
|                                                  | Purchases of property, plant and equipment, net                |                |         | (55       | )            |   |               | (8,979       | ) |   |              | (929   | ) |              |     | -0- |  |   |         | (9,963   | )
|                                                  | Acquisitions, net of cash acquired                             |                |         | -0-       |              |   |               | (9,997       | ) |   |              | -0-    |   |              |     | -0- |  |   |         | (9,997   | )
|                                                  | Proceeds from sale of assets held for sale                     |                |         | -0-       |              |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | -0-      |  
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used ) in investing activities |                                                                |                | (55     | )         |              |   | (18,976       | )            |   |   | (929         | )      |   |              | -0- |     |  |   | (19,960 | )       
|Cash flows from financing activities:             |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |         
|                                                  | Proceeds from 8.375% Senior Subordinated Notes                 |                |         | 205,179   |              |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | 205,179  |  
|                                                  | Payment on 9.25% Senior Subordinated Notes                     |                |         | (199,930  | )            |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | (199,930 | )
|                                                  | Principal payments on revolving credit and long-term debt, net |                |         | 19,600    |              |   |               | 171          |   |   |              | (1,758 | ) |              |     | -0- |  |   |         | 18,013   |  
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used ) by financing activities |                                                                |                | 24,849  |           |              |   | 171           |              |   |   | (1,758       | )      |   |              | -0- |     |  |   | 23,262  |         
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Increase (decrease) in cash and cash equivalents  |                                                                |                | 749     |           |              |   | (682          | )            |   |   | 4,149        |        |   |              | -0- |     |  |   | 4,216   |         
|Cash and cash equivalents at beginning of year    |                                                                |                | (1,392  | )         |              |   | 881           |              |   |   | 2,702        |        |   |              | -0- |     |  |   | 2,191   |         
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Cash and cash equivalents at end of year          |                                                                | $              | (643    | )         |              | $ | 199           |              |   | $ | 6,851        |        |   | $            | -0- |     |  | $ | 6,407   |         
|                                                  |                                                                |                |         |           |              |   |               |              |   |   |              |        |   |              |    

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


For the Year Ended December 31, 2003


|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |          |  
|------------------------------------------------- | --------------------------------------------------------- | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ | - | ------------ | --- | --- |  | - | ------- | -------- | -
|                                                  |                                                           |                |         | Combined  |              |   | Combined      |              |   |   |              |       
|                                                  |                                                           |                |         | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                                                  |                                                           | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |   | Consolidated |    
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|                                                  |                                                           | (In thousands) |        
|Net cash provided (used) by operations            |                                                           | $              | 7,459   |           |              | $ | 737           |              |   | $ | 3,622        |        |   | $            | -0- |     |  | $ | 11,818  |         
|Cash flows from investing activities:             |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |         
|                                                  | Purchases of property, plant and equipment, net           |                |         | (50       | )            |   |               | (8,398       | ) |   |              | (2,421 | ) |              |     | -0- |  |   |         | (10,869  | )
|                                                  | Acquisitions, net of cash acquired                        |                |         | -0-       |              |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | -0-      |  
|                                                  | Proceeds from sale of assets held for sale                |                |         | -0-       |              |   |               | 7,340        |   |   |              | -0-    |   |              |     | -0- |  |   |         | 7,340    |  
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used) in investing activities  |                                                           |                | (50     | )         |              |   | (1,058        | )            |   |   | (2,421       | )      |   |              | -0- |     |  |   | (3,529  | )       
|Cash flows from financing activities:             |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |         
|                                                  | Proceeds from bank arrangements                           |                |         | 112,000   |              |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | 112,000  |  
|                                                  | Repayment of old revolving credit agreement               |                |         | (112,000  | )            |   |               | -0-          |   |   |              | -0-    |   |              |     | -0- |  |   |         | (112,000 | )
|                                                  | Principal payments on revolving credit and long-term debt |                |         | (13,000   | )            |   |               | (796         | ) |   |              | (1,102 | ) |              |     | -0- |  |   |         | (14,898  | )
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used ) by financing activities |                                                           |                | (13,000 | )         |              |   | (796          | )            |   |   | (1,102       | )      |   |              | -0- |     |  |   | (14,898 | )       
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Increase (decrease) in cash and cash equivalents  |                                                           |                | (5,591  | )         |              |   | (1,117        | )            |   |   | 99           |        |   |              | -0- |     |  |   | (6,609  | )       
|Cash and cash equivalents at beginning of year    |                                                           |                | 4,199   |           |              |   | 1,998         |              |   |   | 2,603        |        |   |              | -0- |     |  |   | 8,800   |         
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Cash and cash equivalents at end of year          |                                                           | $              | (1,392  | )         |              | $ | 881           |              |   | $ | 2,702        |        |   | $            | -0- |     |  | $ | 2,191   |         
|                                                  |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    

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



55



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##### Table of Contents








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

Evaluation of disclosure controls and procedures




Changes in internal controls over financial reporting




Managements assessment of the effectiveness of the
Companys internal control over financial reporting


15d-15(f) 15d-15(f) 10-K,


10-K




56



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##### Table of Contents






Item 9B. Other Information







Part III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

10-K.







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

10-K.







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

10-K.







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

10-K.







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




|                   |  |      |           |  |      |   |           | 
|------------------ |  | ---- | --------- |  | ---- | - | --------- | 
|                   |  | 2005 |           |  | 2004 |  
|                   |  |      |           |  |      |  
|Audit fees         |  | $    | 1,007,000 |  |      | $ | 1,264,000 | 
|Audit-related fees |  |      | 60,000    |  |      |   | 58,000    | 
|Tax fees           |  |      | 86,000    |  |      |   | 65,000    | 

10-Q,




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##### Table of Contents






Part IV







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

10-K:


|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page |   
|                                                                                                         |  |      |   
|Managements Annual Report on Internal Control Over
    Financial Reporting                              |  |      | 24 | 
|Report of Independent Registered Public Accounting Firm on
    Internal Control Over Financial Reporting |  |      | 25 | 
|Report of Independent Registered Public Accounting Firm                                                  |  |      | 26 | 
|Consolidated Balance Sheets  December 31, 2005
    and 2004                                             |  |      | 27 | 
|Consolidated Statements of Operations  Years Ended
    December 31, 2005, 2004 and 2003                 |  |      | 28 | 
|Consolidated Statements of Shareholders Equity 
    Years Ended December 31, 2005, 2004 and 2003       |  |      | 29 | 
|Consolidated Statements of Cash Flows  Years Ended
    December 31, 2005, 2004 and 2003                 |  |      | 30 | 
|Notes to Consolidated Financial Statements                                                               |  |      | 31 | 





| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All schedules for which provision is made in the applicable
    accounting regulations of the SEC are not required under the
    related instructions or are not applicable and, therefore, have
    been omitted.





| |                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The exhibits filed as part of this
    Form 10-K are
    listed on the Exhibit Index immediately preceding such
    exhibits and are incorporated herein by reference.
|
| | No annual report or proxy statement covering the Companys
    last fiscal year has been or will be circulated to security
    holders.                               

58



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SIGNATURES


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




| |                                            
| | -------------------------------------------
| | PARK-OHIO INDUSTRIES,
    INC. (Registrant)



| |     |                       
| | --- | ----------------------
| | By: | /s/ Richard P. Elliott

| |                                   
| | ----------------------------------
| |                                   
| | Richard P. Elliott, Vice President
| | and Chief Financial Officer       



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


|                      |  |                                                                                             |  |               
|--------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------
|                     
|*Edward F. Crawford   |  | Chairman, Chief Executive Officer and Director                                              |  | March 15, 2006
|                     
|*Richard P. Elliott   |  | Vice President and Chief Financial Officer (Principal Financial
    and Accounting Officer) |  | March 15, 2006
|                     
|*Matthew V. Crawford  |  | President, Chief Operating Officer and Director                                             |  | March 15, 2006
|*Patrick V. Auletta   |  | Director                                                                                    |  | March 15, 2006
|*Kevin R. Greene      |  | Director                                                                                    |  | March 15, 2006
|*Lewis E. Hatch, Jr.  |  | Director                                                                                    |  | March 27, 2006
|*Dan T. Moore         |  | Director                                                                                    |  | March 15, 2006
|*Lawrence O. Selhorst |  | Director                                                                                    |  | March 15, 2006
|*Ronna Romney         |  | Director                                                                                    |  | March 15, 2006
|*James W. Wert        |  | Director                                                                                    |  | March 15, 2006



|  |                                                                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The undersigned, pursuant to a Power of Attorney executed by
    each of the directors and officers identified above and filed
    with the Securities and Exchange Commission, by signing his name
    hereto, does hereby sign and execute this report on behalf of
    each of the persons noted above, in the capacities indicated.



| |     |                      
| | --- | ---------------------
| | By: | /s/ Robert D. Vilsack

| |                                        
| | ---------------------------------------
| |                                        
| | Robert D. Vilsack,
    Attorney-in-Fact

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ANNUAL REPORT ON
FORM 10-K


PARK-OHIO INDUSTRIES, INC.


For the Year Ended December 31, 2005





EXHIBIT INDEX


|        |    |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | -- | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |    
|        |    |    
|        | 3  | .1  |  | Amended and Restated Articles of Incorporation of Park-Ohio
    Industries, Inc. (filed as Exhibit 3.1 to the
    Form 10-K of Park-Ohio Industries, Inc. for the year ended
    December 31, 1998, SEC File No. 333-43005 and
    incorporated by reference and made a part hereof)                                                                                                                                                                                                                 
|        | 3  | .2  |  | Code of Regulations of Park-Ohio Industries, Inc. (filed as
    Exhibit 3.2 to the Form 10-K of Park-Ohio Industries,
    Inc. for the year ended December 31, 1998, SEC File
    No. 333-43005 and incorporated by reference and made a part
    hereof)                                                                                                                                                                                                                                            
|        | 4  | .1  |  | Amended and Restated Credit Agreement, dated November 5,
    2003, among Park-Ohio Industries, Inc., the other loan parties
    party thereto, the lenders party thereto, Bank One, NA and Banc
    One Capital Markets Inc. (filed as Exhibit 4 to the
    Form 10-Q of Park-Ohio Holdings Corp. for the quarter ended
    September 30, 2003, SEC File No. 000-03134 and incorporated
    by reference and made a part hereof)                                                                     
|        | 4  | .2  |  | First Amendment, dated September 30, 2004, to the Amended
    and Restated Credit Agreement, dated November 5, 2003,
    among Park-Ohio Industries, Inc., the other loan parties
    thereto, the lenders party thereto, Bank One, NA and Bank One
    Capital Markets, Inc. (filed as Exhibit 4.1 to the
    Form 8-K of Park-Ohio Holdings Corp. on October 1,
    2004, SEC File No. 000-03134 and incorporated herein by
    reference and made a part hereof)                                  
|        | 4  | .3  |  | Second Amendment, dated December 29, 2004, to the Amended
    and Restated Credit Agreement, dated November 5, 2003,
    among Park-Ohio Industries, Inc., the other loan parties
    thereto, the lenders party thereto and JP Morgan Chase Bank, NA
    (successor by merger to Bank One, NA), as agent (filed as
    Exhibit 4.1 to the Form 8-K of Park-Ohio Holdings
    Corp. filed on January 5, 2005, SEC File No. 000-03134
    and incorporated herein by reference and made a part hereof)
|        | 4  | .4  |  | Indenture, dated as of November 30, 2004, among Park-Ohio
    Industries, Inc., the Guarantors (as defined therein) and Wells
    Fargo Bank, NA, as trustee (filed as Exhibit 4.1 to the
    Form 8-K of Park-Ohio Holdings Corp. filed on
    December 6, 2004, SEC File No. 000-03134 and
    incorporated herein by reference and made a part hereof)                                                                                                                                            
|        | 10 | .1  |  | Form of Indemnification Agreement entered into between Park-Ohio
    Industries, Inc. and each of its directors and certain officers
    (filed as Exhibit 10.1 to the Form 10-K of Park-Ohio
    Industries, Inc. for the year ended December 31, 1998, SEC
    File No. 333-43005 and incorporated by reference and made a
    part hereof)                                                                                                                                                        
|        | 10 | .2* |  | Amended and Restated 1998 Long-Term Incentive Plan (filed as
    Appendix A to the Definitive Proxy Statement of Park-Ohio
    Holdings Corp., filed on April 23, 2001, SEC File
    No. 000-03134 and incorporated by reference and made a part
    hereof)                                                                                                                                                                                                                                         
|        | 10 | .3  |  | Registration Rights Agreement, dated November 30, 2004,
    among Park-Ohio Industries, Inc., the Guarantors (as defined
    therein) and the initial purchasers that are party thereto
    (filed as Exhibit 10.1 to Form 8-K of Park-Ohio
    Holdings Corp. filed on December 6, 2004, SEC File No.
    000-03134 and incorporated herein by reference and made a part
    hereof)                                                                                                                
|        | 24 | .1  |  | Power of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 31 | .1  |  | Principal Executive Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                            
|        | 31 | .2  |  | Principal Financial Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                            
|        | 32 | .1  |  | Certification requirement under Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                    






|  |                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------
|* | Reflects management contract or other compensatory arrangement
    required to be filed as an exhibit pursuant to Item 15(c)
    of this Report.