TABLE OF CONTENTS




|                                              |                                                                                               |  |  |  |  |  |  | 
|--------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                       
|                                              | Item 1. Business                                                                             
|                                              | Executive Officers of the Registrant                                                         
|                                              | 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 and Related Stockholder Matters            
|                                              | 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 
|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                      
|                                              | Item 13. Certain Relationships and Related Transactions                                      
|PART IV                                      
|                                              | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     
|                                              | Schedule II - Valuation and Qualifying Accounts and Reserves                                 
|                                              | Signatures                                                                                   
|                                              | Index to Certain Exhibits and Financial Statement Schedules                                  
|Exhibit 11--Computation of Per-share Earnings
|Exhibit 21--Subsidiaries                     
|Exhibit 23--Consent of Experts and Counsel   



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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

|                          |  |                       
|------------------------- |  | ----------------------
|For the Fiscal Year Ended |  | Commission File Number
|December 31, 2000         |  | 1-8485                

MILACRON INC.

2090 Florence Avenue


Cincinnati, Ohio 45206


(513) 487-5000


|                         |  |                      
|------------------------ |  | ---------------------
|Incorporated in Delaware |  | I.R.S. No. 31-1062125



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Securities Registered Pursuant to Section 12(b) of the
Act:

|                                                      |  |                                                                           
|----------------------------------------------------- |  | --------------------------------------------------------------------------
|Title of Each Class:
	Common Shares  Par Value $1.00 |  | Name of Each Exchange
	on Which Registered:
	New York Stock Exchange, Inc.

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed
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  
	               No | 

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

The aggregate market value of voting stock held
by non-affiliates of the registrant is $613,586,298 at
February 28, 2001.*

*Voting stock held by officers, directors and
principal holders is not included in the computation. The
company, however, has not made a determination that such
individuals are affiliates within the meaning of
Rule 405 under the Securities Act of 1933.

Number of shares of Common Stock, $1.00 par
value, outstanding as of February 28, 2001:
33,354,557

Documents Incorporated by
Reference:PART III  Proxy statement, dated March 23,
2001



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##### Table of Contents



Milacron Inc.





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|PART I   |  |                                                                                        |  |     
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|Item 1   |  | Business                                                                               |  |      | 3  | 
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|         |  | Executive Officers of the Registrant                                                   |  |      | 9  | 
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|Item 2   |  | Properties                                                                             |  |      | 10 | 
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|Item 3   |  | Legal Proceedings                                                                      |  |      | 10 | 
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|Item 4   |  | Submission of Matters to a Vote of Security Holders                                    |  |      | 10 | 
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|PART II  |  |                                                                                        |  |     
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|Item 5   |  | Market for the Registrants Common Equity and Related
	Stockholder Matters             |  |      | 10 | 
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|Item 6   |  | Selected Financial Data                                                                |  |      | 11 | 
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|Item 7   |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |  |      | 12 | 
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|Item 7A  |  | Quantitative and Qualitative Disclosures About Market Risk                             |  |      | 21 | 
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|Item 8   |  | Financial Statements and Supplementary Data                                            |  |      | 21 | 
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|Item 9   |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |  |      | 44 | 
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|PART III |  |                                                                                        |  |     
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|Item 10  |  | Directors and Executive Officers of the Registrant                                     |  |      | 44 | 
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|Item 11  |  | Executive Compensation                                                                 |  |      | 44 | 
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|Item 12  |  | Security Ownership of Certain Beneficial Owners and Management                         |  |      | 44 | 
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|Item 13  |  | Certain Relationships and Related Transactions                                         |  |      | 44 | 
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|PART IV  |  |                                                                                        |  |     
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|Item 14  |  | Exhibits, Financial Statement Schedules and Reports on
	Form  8-K                      |  |      | 44 | 
|        
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|         |  | Schedule II  Valuation and Qualifying Accounts
	and Reserves                          |  |      | 47 | 
|        
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|         |  | Signatures                                                                             |  |      | 48 | 
|        
|        
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|         |  | Index to Certain Exhibits and Financial Statement Schedules                            |  |      | 49 | 

2



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##### Table of Contents






PART I




Item 1.   Business

General

Milacron is a global manufacturer and distributor
of tools, supplies, machinery and systems to produce plastic and
metal products. We operate in two business segments: plastics
technologies and metalworking technologies. To processors of
plastic products, we sell a broad range of machinery, mold
tooling and ancillary supplies; and to metalworking industries,
we sell a wide variety of cutting tools, abrasives and
fluids.


Starting out in the 1860s as a screw and tap
maker in a small shop in downtown Cincinnati, the company was
first incorporated in 1884. As a successor to that business,
Milacron was most recently incorporated in Delaware in 1983.
Known throughout most of our history as a leading maker of
machine tools serving metalworking industries, in 1998 we
divested this business in order to focus exclusively on our two
more rapidly growing businesses.

Milacrons plastics technologies group,
which accounted for 55% of consolidated sales in 2000, sells
equipment and turnkey systems for the three most common methods
of processing plastic: injection molding, extrusion and blow
molding, as well as related mold tooling, components and MRO
(maintenance, repair and operating) supplies to these same
customers. Major global markets for plastics technologies
include the following industries: packaging, automotive,
construction, consumer goods, electrical and electronics,
medical and housewares and appliances.

Milacrons metalworking technologies group,
at 45% of consolidated sales, sells carbide inserts and related
tool holders, carbide and high-speed steel round tools,
coolants, lubricants, cleaning fluids and grinding wheels to
many large manufacturing industries worldwide. These include:
automotive, machinery, electrical and electronic, consumer
goods, oil and gas drilling and mining, aerospace, off-road
equipment, housewares and appliances, and construction.

Milacron pursues an active acquisition and
divestiture strategy to expand our core businesses on a global
basis and to improve profitability. Since 1993, we have made
eleven acquisitions in plastics technologies and eight in
metalworking technologies while divesting six businesses.

During the last eight years, with the help of
several acquisitions, plastics technologies sales have grown at
a compounded annual rate of 14%, while metalworking technologies
sales, starting from a lower base, have grown 27%. In both
segments, operating earnings before nonrecurring items
(primarily gains and losses on divestitures and restructuring
charges) have risen 18% compounded annually. Reported growth in
the past few years has been slower for several reasons including
ongoing softness in many key industrial markets worldwide and
the effect of currency translation.

On a consolidated basis in the past eight years,
Milacrons sales from continuing operations have grown 18%
compounded annually. Competing effectively in international
markets, our sales to customers outside the U.S. have risen from
$155 million in 1992 to $613 million, representing 39%
of total sales, in 2000. Since 1992, excluding nonrecurring
items, Milacrons earnings have improved 34% compounded
annually and earnings per share have increased 31%. Including
nonrecurring items, earnings from continuing operations have
grown 16% compounded annually and 13% on a per-share
basis.

Strategic Acquisitions and Divestitures

Over the past eight years in an effort to expand
our product offering and global presence in both plastics and
metalworking technologies, Milacron has made a series of
acquisitions in both segments. In plastics, we have made a
strong effort to diversify from capital goods into durable goods
and consumables. In metalworking, which is almost entirely
consumables and durables, we have expanded our annual revenues
of $108 million from metalworking fluids and abrasives in
1992 to $710 million in 2000 through the addition of
several cutting tool businesses.


3



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##### Table of Contents



|                          |  |      |  |                                 
|------------------------- |  | ---- |  | --------------------------------
|                         
|                         
|Acquisition               |  | Date |  | Product Lines                   
|                         
|                         
|Valenite                  |  | 1993 |  | Carbide inserts, tool holders   
|                         
|                         
|                         
|                         
|Ferromatik                |  | 1993 |  | Injection molding machines      
|                         
|                         
|                         
|                         
|Widia                     |  | 1995 |  | Carbide inserts, tool holders   
|                         
|                         
|                         
|                         
|Talbot Holdings           |  | 1995 |  | Drills, end mills, taps         
|                         
|                         
|                         
|                         
|D-M-E                     |  | 1996 |  | Mold bases, mold tooling        
|                         
|                         
|                         
|                         
|Data Flute CNC            |  | 1997 |  | Solid carbide end mils          
|                         
|                         
|                         
|                         
|Minnesota Twist           |  | 1997 |  | High-speed steel drills         
|                         
|                         
|                         
|                         
|Northern Supply           |  | 1998 |  | Plastics processing supplies    
|                         
|                         
|                         
|                         
|Wear Technology           |  | 1998 |  | Extruder barrels and screws     
|                         
|                         
|                         
|                         
|Autojectors               |  | 1998 |  | Vertical injection machines     
|                         
|                         
|                         
|                         
|Uniloy                    |  | 1998 |  | Blow molding systems and   molds
|                         
|                         
|                         
|                         
|Master Unit Die           |  | 1998 |  | Mold bases, tooling             
|                         
|                         
|                         
|                         
|Werkö                     |  | 1998 |  | High-speed steel drills         
|                         
|                         
|                         
|                         
|Nickerson                 |  | 1999 |  | Plastics tooling and supplies   
|                         
|                         
|                         
|                         
|Producto Chemicals        |  | 1999 |  | Metalworking cleaning fluids    
|                         
|                         
|                         
|                         
|Oak International         |  | 1999 |  | Metalforming fluids             
|                         
|                         
|                         
|                         
|Akron Extruders           |  | 2000 |  | Single-screw extruders          
|                         
|                         
|                         
|                         
|Rite-Tek Canada           |  | 2000 |  | Plastics MRO supplies           
|                         
|                         
|                         
|                         
|Ontario Heater and Supply |  | 2000 |  | Plastics MRO supplies           
|                         

To further expand our presence in all phases of
plastics processing, in 2000 we bought three small companies
with strategic, high-growth characteristics: Ontario Heater and
Supply Company (OHS) and Rite-Tek Canada, which specialize
in the distribution of supplies to the plastics processing
industry; and Akron Extruders, which adds new depth to our North
American line of single-screw extrusion systems.

Milacron is committed to growing sales and
profitability in each of our businesses and we will seek to
divest any operation or product line that is not critical to our
core businesses or not likely to meet our growth targets. Since
1994, we have sold six such businesses:

|                         |  |      |      |               |  |                            |  | 
|------------------------ |  | ---- | ---- | ------------- |  | -------------------------- |  | 
|                        
|                        
|Divestiture              |  | Date |      | Product Lines
|                        
|                        
|Sano                     |  |      | 1993 |               |  | Plastic blown film systems
|                        
|                        
|                        
|                        
|American Mine Tool       |  |      | 1995 |               |  | Carbide mining tools      
|                        
|                        
|                        
|                        
|Electronic Systems       |  |      | 1995 |               |  | Machine controls          
|                        
|                        
|                        
|                        
|Machine Tools            |  |      | 1998 |               |  | Metalworking machinery    
|                        
|                        
|                        
|                        
|European Extrusion       |  |      | 1999 |               |  | Plastics extrusion systems
|                        
|                        
|                        
|                        
|Widia Magnet Engineering |  |      | 2000 |               |  | Industrial magnets        
|                        

Cost Cutting and Efficiency Initiatives

In the normal course of business, we continually
search for opportunities to reduce costs and improve efficiency.
In 2000, we concentrated on two major efforts in this area: a
company-wide efficiency program and the consolidation of our
European blow molding operations.


The company-wide efficiency-improvement program,
carried out in both segments in North America and in Europe,
entailed closing four small manufacturing facilities and five
administrative offices, and the elimination of more than 300
administrative and manufacturing positions worldwide. Initiated
in 1999 and substantially completed in 2000, the plan cost
approximately $18 million and yielded $19 million in
savings in 2000. The annualized savings from the plan are
expected to exceed $20 million and to be fully realized in
2001.

The consolidation of European blow molding
operations consisted of closing plants in Florence, Milan, and
Berlin and the transfer of their manufacturing and assembly
operations to an existing plant located in the Czech Republic
and to a new facility near Milan upon its completion in the
first half of 2001. The consolidation, which cost approximately
$6 million, is expected to generate annual savings of
approximately $3 million.

All told, the efficiency improvement program, the
consolidation of European blow molding operations and other
cost-cutting efforts in 2000 led to the elimination of more than
400 positions and projected annualized savings of around
$25 million.

Research and Development, New Product Development and Capital
Expenditures

At Milacron, we emphasize efficient investment in
research and development and in new capital equipment in support
of rapid new product introductions to enhance our growth and
global competitive position. To this end, we invested
$34.4 million in R&D in 2000, compared to
$34.5 million in 1999 and $36.7 million in 1998.


In 2000, we invested $47 million in capital
additions, most of which went for advanced technology to
increase productivity throughout our operations. The balance of
our investment went primarily to enhance our computer systems
and Internet capabilities to better serve our customers.

Patents

Milacron holds a number of patents pertaining to
both plastics and metalworking technologies, none of which is
material to either business segment.


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##### Table of Contents



Employees

The average number of employees at Milacron was
10,922 people in 2000. Of these, 5,424 were outside the U.S. As
of year-end 2000, our employment was 10,735 people.


Backlog

The backlog of unfilled orders was
$181 million at the end of 2000 and $243 million at
the end of 1999. The backlog at year-end 2000, substantially all
of which is believed to be firm, is expected to be delivered in
2001.


Segment Information

Segment and geographic information for the years
ended December 31, 2000, 1999 and 1998 is included in the
notes to Milacrons consolidated financial statements on
pages 40 through 42 of this Form 10-K.


Plastics Technologies Business

Plastics Technologies Markets.The markets for plastics machinery
and supplies have grown steadily over the past five decades, as
plastics continue to replace traditional materials such as
metal, wood, glass and paper in manufactured products. Plastics
are increasingly the material of choice for packaging, cars,
buildings and infrastructure, consumer goods, electronics,
medical devices and housewares and appliances.

Advancements in the development of materials and
in the capabilities of the processing equipment continue to make
plastic products more functional and less expensive, thus
spurring secular growth. Thanks to superior strength-to-weight
ratios, plastics are increasingly used in transportation-related
industries. And consumer demand for safer, more convenient
products has also driven the general demand for plastic
products.

The plastics technologies areas where Milacron
competes comprise a $15 billion global market. About two-thirds
of the market consists of capital equipment, which is subject to
general economic cycles and capital spending patterns. Demand is
often shaped by other, more specific factors as well, such as
fluctuations in resin pricing and availability, oil, gas and
electricity prices, the impact of interest rates on new housing
starts and auto sales, the introduction of new model cars and
consumer spending. Changes in currency exchange rates may also
affect our customers businesses and, in turn, the demand
for processing equipment.

While concerns about energy conservation and the
environment could theoretically deter the growth of the plastics
industry, in practice this does not appear to have happened.
Factually, it has been known for many decades that the use of
plastics actually conserves energy and is environmentally
friendly when compared to making the same products out of metal,
wood, glass or paper. To further address environmental issues,
many polymer suppliers, machinery makers and processors are
actively developing and improving methods of recycling. Through
membership in the trade association, Society of Plastics
Industry, Milacron continues to work with other leading
companies to position plastics as a part of the solution to the
challenges of energy and environmental conservation.

Plastics Technologies
Products.We believe Milacron is
the broadest-line producer of machinery, mold bases, related
tooling and supplies for plastics processing in the world. With
2000 sales of $874 million, our plastics technologies
segment is organized around five major businesses:

|                      |  |                               
|--------------------- |  | ------------------------------
|                     
|                     
|Business              |  | Product Lines                 
|                     
|                     
|Ferromatik Milacron   |  | Injection molding systems     
|                     
|                     
|                     
|                     
|Uniloy Milacron       |  | Blow molding systems and molds
|                     
|                     
|                     
|                     
|ExtrusionTek Milacron |  | Extrusion systems             
|                     
|                     
|                     
|                     
|D-M-E                 |  | Mold bases and related tooling
|                     
|                     
|                     
|                     
|MRO                   |  | Aftermarket parts and supplies
|                     

We offer full lines of equipment and systems for
the three major methods of processing plastic: injection
molding, extrusion and blow molding. Milacron is also a leading
maker and supplier of durable goods such as mold bases and
related tooling, components and supplies for the injection
moldmaking industry, and we make complete molds for blow
molding. We sell specialty auxiliary equipment for all types of
plastics processing and we rebuild and retrofit older equipment
manufactured by Milacron or others. We also have a growing
presence as a supplier of aftermarket MRO items.

In each of our businesses, Milacron has a global
leadership position with certain product lines. We are a world
leader, for example, in all-electric injection molding systems,
which we believe will become the industry standard within the
next several years. Compared to traditional hydraulic powered
machines, all-electric systems are faster, quieter, cleaner,
more accurate and consume less than half the energy. In blow
molding, we believe we are the number-one maker of systems to
produce HDPE (high density polyethylene) containers. Our
twin-screw extruders are the system of choice in North America
to produce a wide variety of PVC products used in construction
and remodeling. And our D-M-E pre-engineered mold bases are the
best-selling products in their categories in North America and
very popular in Europe as well.

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Plastics Technologies Geographic
Sales.About 78% of our plastics
technologies sales in 2000 went to customers in North America.
European sales made up about 17% of the groups total, with
the rest coming from Asia and the rest of the world. The trend
in recent years toward an increasingly high percentage of sales
in North America has been exacerbated by weak or depressed
overseas markets, the strong dollar and the resulting currency
translation effects, the divestiture of our European extrusion
systems business at the end of 1999 and recent acquisitions of
North American-based companies. From a transactional point of
view, fluctuating currency exchange rates and the introduction
of the euro have not caused any material changes in
Milacrons competitive position in the industry or in the
operation of this groups businesses.

Plastics Technologies
Distribution.We distribute our
plastics machinery and systems through a combination of a direct
sales force and independent agents, who are spread
geographically throughout our key markets. We sell our mold
bases, supplies and components through a direct distribution
network in North America and Europe and through a large network
of joint venture sales and service offices in Asia. We market
our MRO supplies in traditional printed catalogs as well as
through electronic catalogs and over the Internet.

Our plastics technologies group maintains sales,
marketing and customer service facilities in major cities across
North America and Europe. In Asia, we have offices in Singapore,
China and Malaysia and we also sell through a large network of
joint venture sales and service offices in all major countries.
A great number of D-M-Es products are sold through
catalogs and telemarketing. We are rapidly developing full
e-business capabilities for Internet sales and
distribution.

Our service and parts organization, ServTek,
provides a steady revenue stream and continues to grow
worldwide. Through ServTek, we supplement our own service
technicians with a network of independent providers for 24-hour
response across North and South America and in a number of
European countries.

Plastics Technologies
Customers.Our plastics
technologies customers are involved in making a wide range of
everyday products: from automotive parts to refrigerator liners,
from electronic and medical components to digital cameras, cell
phones, toothbrushes and razors; from milk bottles to outdoor
furniture and toys. Discrete end-markets in order of 2000 sales
were: packaging, automotive, construction, consumer goods,
electrical, medical, housewares and appliances. The two largest
customer categories, packaging and automotive, each accounted
for about 20% of the groups sales.

Plastics Technologies Production
Facilities.For the plastics
technologies segment, Milacron maintains the following principal
production facilities:

|                              |  |                                                                                                                      
|----------------------------- |  | ---------------------------------------------------------------------------------------------------------------------
|                             
|                             
|Facility Location             |  | Products                                                                                                             
|                             
|                             
|Ahmedabad, India              |  | Injection molding machines                                                                                           
|                             
|                             
|                             
|                             
|Batavia, Ohio                 |  | Injection machines, all-electric injection molding
        machines, blow molding machines,
        extrusion systems
|                             
|                             
|                             
|                             
|Charlevoix, Michigan          |  | Mold components                                                                                                      
|                             
|                             
|                             
|                             
|Corby, England                |  | Injection molding components                                                                                         
|                             
|                             
|                             
|                             
|Florence, Italy (1)           |  | Blow molding machines                                                                                                
|                             
|                             
|                             
|                             
|Greenville, Michigan*         |  | Mold base manufacturing                                                                                              
|                             
|                             
|                             
|                             
|Lewistown, Pennsylvania       |  | Mold components                                                                                                      
|                             
|                             
|                             
|                             
|Madison Heights, Michigan     |  | Mold base components                                                                                                 
|                             
|                             
|                             
|                             
|Magenta, Italy* (2)           |  | Blow molding machines                                                                                                
|                             
|                             
|                             
|                             
|Malterdingen, Germany         |  | Injection molding machines                                                                                           
|                             
|                             
|                             
|                             
|Manchester, Michigan          |  | Blow molding machines                                                                                                
|                             
|                             
|                             
|                             
|McPherson, Kansas*            |  | Extrusion screws and barrels                                                                                         
|                             
|                             
|                             
|                             
|Mechelen, Belgium             |  | Mold base components                                                                                                 
|                             
|                             
|                             
|                             
|Melrose Park, Illinois        |  | Special mold base components                                                                                         
|                             
|                             
|                             
|                             
|Monterey Park, California     |  | Special mold base components                                                                                         
|                             
|                             
|                             
|                             
|Mt. Orab, Ohio                |  | Plastics machinery parts                                                                                             
|                             
|                             
|                             
|                             
|Neuenstadt am Kocher, Germany |  | Special mold base components                                                                                         
|                             
|                             
|                             
|                             
|Policka, Czech Republic       |  | Blow molding machines                                                                                                
|                             
|                             
|                             
|                             
|Windsor, Ontario, Canada      |  | Machinery for mold bases                                                                                             
|                             
|                             
|                             
|                             
|Youngwood, Pennsylvania       |  | Mold bases and components                                                                                            
|                             



|    |                           
|--- | --------------------------
|(1) | Closing in quarter 1, 2001
|(2) | Opening in quarter 2, 2001

|  |       
|- | ------
|* | Leased

Plastics Technologies
Competition.The markets for
plastics technologies are global and highly competitive and
include North American, European and Asian companies. We believe
Milacron has the number-one share of the North American market
and the number-two share worldwide. Our competitors vary in
size: some are larger than us, most are smaller, and only a few
compete in more than one product category. Principal competitive
factors in the plastics technologies industry are: product
features, technology, performance, reliability, quality,
delivery, price and customer service.

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Metalworking Technologies Business

Metalworking Technologies
Markets.Key markets for our tools
and related supplies include the whole spectrum of metalworking
industries, from auto, aircraft and machinery makers and job
shops, to manufacturers of electronic and consumer goods, and
the construction and energy extraction businesses.

During the past several decades, overall demand
for metalworking products has grown at a rate approximating the
growth of GDP (gross domestic product) in both developing and
mature economies around the world. Higher growth areas within
the metalworking industries include the machining of special
alloys and lightweight metals such as aluminum as well as
components to build equipment to process silicon wafers, circuit
boards and other materials used in the electronic and
computer-related industries.

Milacrons metalworking technologies
business participates in a $15 billion world market and consists
almost entirely of consumables, durables and services. As such,
demand for our products is generally directly proportional to
levels of industrial production, although we specifically target
higher-growth areas with each of our product lines. Factors
affecting our customers production rates, and ultimately
demand for our own products, include auto sales, consumer
spending and confidence, interest rates, energy prices and
currency exchange rates.

Metalworking Technologies
Products.We believe Milacron is
the worlds broadest-line maker of tools and supplies for
the metalworking industries. The group, whose sales in 2000 were
$710 million, is organized around five basic
businesses:

|                                  |  |                                                                            
|--------------------------------- |  | ---------------------------------------------------------------------------
|                                 
|                                 
|Business                          |  | Product Lines                                                              
|                                 
|                                 
|Widia, Valenite                   |  | Carbide inserts, tool holders                                              
|                                 
|                                 
|                                 
|                                 
|Round tools (many brands)         |  | Carbide and high-speed steel drills, taps and end mills                    
|                                 
|                                 
|                                 
|                                 
|Metalworking fluids (many brands) |  | Oil-based, water-soluble and synthetic fluids, cleaning and
	forming fluids
|                                 
|                                 
|                                 
|                                 
|Abrasives (many brands)           |  | Resinoid, vitrified, super abrasive and synthetic grinding wheels          
|                                 
|                                 
|                                 
|                                 
|Carbide die and wear              |  | Die parts, wear parts, carbide rods                                        
|                                 

The lines listed above represent over 150,000
different products. Milacron has established a leadership
position in many new product technologies including synthetic
lubricants, use of ceramic and super abrasives, high-performance
cutting tool coatings, and product designs using computer
modeling. About 65% of this segments 2000 sales are
consumable products, which are depleted during the metalworking
process, offering us a continuous opportunity to sell
replacement products to our customers.

Metalworking Technologies Geographic
Sales.About 57% of our
metalworking technologies sales were to customers in North
America in 2000, while another 30% were sold in Europe. The
remaining sales were to Asia, primarily India, where we have the
leading share of the carbide insert market. Over the past
several years, the group has achieved substantial growth in
European markets in local currencies but adverse currency
translation effects  the result of a strong U.S. dollar
 have reduced reported sales considerably. In fact, the
groups sales would be at least $100 million higher in 2000
if 1995 exchange rates had been in effect. From a transactional
point of view, fluctuating exchange rates and the introduction
of the euro have not caused any material changes in
Milacrons competitive position in the industry or in the
operation of this groups businesses.

Metalworking Technologies
Distribution.Our metalworking
technologies business sells products under multiple brands
through parallel market channels, using direct sales, industrial
distributors, agents and manufacturers representatives,
and in traditional printed catalogs as well as through
electronic catalogs and over the Internet. We manufacture most
of what we sell, and most of what we make is sold under
company-owned brands. In addition, our products are sold under
the brand names of other companies through their own market
channels, and we also use Milacron brand names to sell products
that are made by other companies.

Metalworking Technologies
Customers.Our metalworking tools,
abrasives and fluids are involved in making all kinds of
products, from automotive power train parts to aluminum soft
drink cans, from air conditioners and hair dryers to jet engines
and bicycles, not to mention a variety of industrial components
such as gaskets, seals, pumps and valves.

Discrete end-markets for our metalworking
technologies group in order of importance based on 2000 sales
were: automotive and transportation, machinery, electrical and
electronic, consumer goods, energy extraction, aerospace,
off-road equipment, housewares and appliances and construction.
The largest customer category, automotive and transportation,
accounted for 35% of the groups sales in 2000, higher than
usual due to the strength of car production and softness in many
other markets.

7



---



##### Table of Contents



Metalworking Technologies Production
Facilities.For our metalworking
technologies segment, Milacron maintains the following principal
production facilities:

|                                                        |  |                                                                          
|------------------------------------------------------- |  | -------------------------------------------------------------------------
|                                                       
|                                                       
|Facility Location                                       |  | Products                                                                 
|                                                       
|                                                       
|Altenburg, Germany *                                    |  | Taps                                                                     
|                                                       
|                                                       
|                                                       
|                                                       
|Andrezieux, France                                      |  | Carbide inserts                                                          
|                                                       
|                                                       
|                                                       
|                                                       
|Bangalore, India                                        |  | Carbide inserts, tool holders, carbide wear parts, special
	machine tools
|                                                       
|                                                       
|                                                       
|                                                       
|Carlisle, Pennsylvania                                  |  | Resin grinding wheels                                                    
|                                                       
|                                                       
|                                                       
|                                                       
|Chisholm, Minnesota                                     |  | High-speed steel drills                                                  
|                                                       
|                                                       
|                                                       
|                                                       
|Cincinnati, Ohio                                        |  | Metalworking fluids, precision grinding wheels                           
|                                                       
|                                                       
|                                                       
|                                                       
|Corby, England *                                        |  | Metalforming fluids                                                      
|                                                       
|                                                       
|                                                       
|                                                       
|Detroit, Michigan (5 plants in metro area, of which 3*) |  | Carbide inserts, special steel products, gaging systems                  
|                                                       
|                                                       
|                                                       
|                                                       
|Essen, Germany (2 plants)                               |  | Carbide inserts, metallurgical powders, carbide rods                     
|                                                       
|                                                       
|                                                       
|                                                       
|Gainesville, Texas *                                    |  | Tool holding systems for turning, milling and boring                     
|                                                       
|                                                       
|                                                       
|                                                       
|Grenada, Mississippi *                                  |  | Metalforming fluids                                                      
|                                                       
|                                                       
|                                                       
|                                                       
|Hardenberg, The Netherlands                             |  | Carbide wear parts                                                       
|                                                       
|                                                       
|                                                       
|                                                       
|Königsee, Germany *                                     |  | High-speed steel drills and taps                                         
|                                                       
|                                                       
|                                                       
|                                                       
|Lichtenau, Germany                                      |  | Tool holders                                                             
|                                                       
|                                                       
|                                                       
|                                                       
|Livonia, Michigan *                                     |  | Process cleaners, corrosion inhibitors, specialty products               
|                                                       
|                                                       
|                                                       
|                                                       
|Millersburg, Pennsylvania (2 plants)                    |  | End mills, taps, counterbores                                            
|                                                       
|                                                       
|                                                       
|                                                       
|Nogales, Mexico *                                       |  | Resin grinding wheels                                                    
|                                                       
|                                                       
|                                                       
|                                                       
|Patancheru, India                                       |  | Rock tools                                                               
|                                                       
|                                                       
|                                                       
|                                                       
|Pittsfield, Massachusetts (2 plants)                    |  | Carbide end mills                                                        
|                                                       
|                                                       
|                                                       
|                                                       
|Sinsheim, Germany *                                     |  | Special steel tooling                                                    
|                                                       
|                                                       
|                                                       
|                                                       
|Sturgis, Michigan                                       |  | Metalforming fluids                                                      
|                                                       
|                                                       
|                                                       
|                                                       
|Ulsan, South Korea                                      |  | Metalworking fluids                                                      
|                                                       
|                                                       
|                                                       
|                                                       
|Valley View, Ohio *                                     |  | End mills                                                                
|                                                       
|                                                       
|                                                       
|                                                       
|Vlaardingen, The Netherlands                            |  | Metalworking fluids                                                      
|                                                       
|                                                       
|                                                       
|                                                       
|West Branch, Michigan (2 plants)                        |  | Metallurgical powders, carbide rods, carbide wear parts                  
|                                                       
|                                                       
|                                                       
|                                                       
|Westminster and Seneca, South Carolina (6 plants)       |  | Carbide and diamond inserts                                              
|                                                       



|  |       
|- | ------
|* | Leased

Metalworking Technologies
Competition.While we have many
competitors in metalcutting tools, we believe Milacron has the
number-two share of the North American market and ranks third
overall globally. Our competitors in metalworking fluids are
large petrochemical companies and smaller companies specializing
in similar fluids. There are a few large competitors in the
North American grinding wheel market, one of which is
significantly larger than Milacron. Principal competitive
factors in these markets include market coverage, technology,
performance, delivery, price and customer service.

8



---



##### Table of Contents






Executive Officers of the Registrant

The following information is included in
accordance with the provisions for Part III, Item 10:

|                                 |  |                                                       |  |                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------- |  | ----------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                
|                                
|                                 |  | Positions Held During                                
|Name and Age                     |  | Position                                              |  | Last Five Years                                                                                                                                                                                                                                                                                                                                           
|                                
|                                
|Daniel J. Meyer (a)
	(64)        |  | Chairman and Chief Executive Officer, Director        |  | Elected Chairman and Chief Executive Officer in November, 1991.
	Has served as Director since 1985. Also is a member of the
	Executive Committee. Also served as President from January, 1998
	through September, 1999.                                                                                                                                   
|Ronald D. Brown (b)
	(47)        |  | President and Chief Operating Officer, Director       |  | Elected President and Chief Operating Officer and a Director of
	the company in 1999. Prior thereto was Senior Vice President
	-Finance and Administration and Chief Financial Officer from
	1998, Vice President  Finance and Administration and
	Chief Financial Officer from 1997 and Vice President 
	Finance and Chief Financial Officer from 1993.
|James R. Christie
	(55)          |  | Group Vice President  Metalworking Technologies      |  | Elected Group Vice President  Metalworking
	Technologies in February, 2000. Prior thereto was Vice
	President  Metalworking Technologies from 1997 and
	President of Valenite from 1993.                                                                                                                                                                
|Harold J. Faig
	(52)             |  | Group Vice President  Plastics Technologies          |  | Elected Group Vice President  Plastics Technologies
	in February, 1994.                                                                                                                                                                                                                                                                                  
|William J. Gruber
	(47)          |  | Vice President  Ferromatik Milacron  North
	America |  | Elected Vice President  U.S. Plastics Technologies in
	1996. Prior thereto was Manager of U.S. Plastics Technologies
	from 1995 and General Manager, Products Division from 1984.                                                                                                                                                                        
|Barbara G. Kasting
	(48)         |  | Vice President  Human Resources                      |  | Elected Vice President  Human Resources in 1997.
	Prior thereto was Assistant Treasurer from 1995 and Director of
	Treasury Operations from 1994.                                                                                                                                                                                                        
|Robert P. Lienesch
	(55)         |  | Vice President  Finance and Chief Financial Officer  |  | Elected Vice President  Finance, Treasurer and Chief
	Financial Officer in 1999. Has served as Vice President and
	Treasurer since 1998. Prior thereto was Controller from 1989.                                                                                                                                                                         
|Hugh C. ODonnell
	(49)          |  | Vice President, General Counsel and Secretary         |  | Elected Vice President, General Counsel and Secretary in 1999.
	Prior thereto was Corporate Counsel from 1992.                                                                                                                                                                                                                                            
|James M. Stergiopoulos (c)
	(62) |  | Vice President  Plastics Technologies, Europe        |  | Elected Vice President  Plastics Technologies, Europe
	in 1995. Prior thereto was Director, Plastics Technologies
	Europe from 1994.                                                                                                                                                                                                                     
|Jerome L. Fedders
	(57)          |  | Controller                                            |  | Elected Controller in 1998. Prior thereto was Group Controller,
	Plastics Technologies from 1994.                                                                                                                                                                                                                                                         
|John C. Francy
	(36)             |  | Treasurer                                             |  | Elected Treasurer in 2001. Prior thereto was Assistant Treasurer
	from 1998, Director of Treasury Operations from 1997 and
	Controller of Machine Tool Marketing Worldwide from 1995.                                                                                                                                                                     

| |  |  |  | 
| |  |  |  | 
|

Notes:


Parenthetical figure below name of individual
indicates age at most recent birthday prior to December 31,
2000.

There are no family relationships among the
executive officers of the Registrant.

Officers of the company are elected each year by
the Board of Directors.



|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In February, 2001, Daniel J. Meyer announced his
	intention to retire from the company in May, 2001.
	Mr. Meyer will stand for reelection as a Director in April,
	2001.
|(b) | In February, 2001, Ronald D. Brown, was elected
	Chairman and Chief Executive Officer effective June 1,
	2001.                                                          
|(c) | In December, 2000, James M. Stergiopoulos
	announced his intention to retire from the company in February,
	2001.                                                       

9



---



##### Table of Contents






Item 2.   Properties

We lease our corporate headquarters building from
a third party. This building is located approximately 2 miles
north of downtown Cincinnati, Ohio.


The remaining information required by Item 2
is included in Part I on pages 6 and 8 of this
Form 10-K.




Item 3.   Legal Proceedings

In the opinion of management and counsel, there
are no material pending legal proceedings to which the company
or any of its subsidiaries is a party or of which any of its
property is the subject.







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

There were no matters submitted to a vote of
security holders during the fourth quarter of 2000.







PART II







|        |                                                                           
|------- | --------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity and Related
	Stockholder Matters

The companys common shares are listed on
the New York Stock Exchange. Such shares are also traded on the
Cincinnati Stock Exchange, Boston Stock Exchange, Pacific Stock
Exchange, Philadelphia Stock Exchange and Midwest Stock
Exchange, with options traded on the Philadelphia Stock
Exchange. As of February 28, 2001, there were approximately
4,785 holders of record of the companys common shares. The
companys Preferred shares are not actively traded.


The following table shows the price range of the
common shares for 1999 and 2000, as reported by the New York
Stock Exchange. Cash dividends of $.12 per common share were
paid in each quarter of 1999 and 2000.

|                              |              |      |       |       |  |   |       |       | 
|----------------------------- | ------------ | ---- | ----- | ----- |  | - | ----- | ----- | 
|                             
|                             
|Common Stock Price Range      |              |     
|                             
|                             
|                              |              | High |       | Low  
|                             
|                             
|1999, quarter ended
	March 31 |              | $    | 21.13 |       |  | $ | 15.50 |      
|                             
|                             
|                             
|                             
|                              | June 30      |      |       | 24.50 |  |   |       | 15.56 | 
|                             
|                             
|                             
|                             
|                              | September 30 |      |       | 19.25 |  |   |       | 16.63 | 
|                             
|                             
|                             
|                             
|                              | December 31  |      |       | 19.06 |  |   |       | 13.50 | 
|                             
|                             
|                             
|                             
|2000, quarter ended
	March 31 |              | $    | 15.78 |       |  | $ | 12.06 |      
|                             
|                             
|                             
|                             
|                              | June 30      |      |       | 18.25 |  |   |       | 13.50 | 
|                             
|                             
|                             
|                             
|                              | September 30 |      |       | 17.25 |  |   |       | 13.31 | 
|                             
|                             
|                             
|                             
|                              | December 31  |      |       | 16.56 |  |   |       | 13.44 | 
|                             

10



---



##### Table of Contents






Item 6.   Selected Financial Data

|                                                              |                                         |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |      |     | 
|------------------------------------------------------------- | --------------------------------------- | ------- | ------- | ----- | ---- | ---- | ------- | ----- | ---- | ---- | ------- | ----- | ---- | ---- | ------- | ----- | ---- | ---- | ------- | ----- | ---- | - | ------- | ---- | ---- | - | ----- | ---- | ---- | - | ------ | ---- | ----- | ---- | ----- | ---- | --- | 
|                                                             
|                                                             
|(Dollars in millions,                                         |                                         |        
|except per-share                                              |                                         |        
|amounts)                                                      |                                         | 2000    |         | 1999  |      | 1998 |         | 1997  |      | 1996 |         | 1995  |      | 1994 |         | 1993  |      | 1992
|                                                             
|                                                             
|Summary of Operations                                         |                                         |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |     
|                                                             
|                                                             
|                                                             
|                                                             
|Sales                                                         |                                         | $       | 1,584.2 |       |      | $    | 1,624.7 |       |      | $    | 1,514.7 |       |      | $    | 1,438.7 |       |      | $    | 1,357.9 |       |      | $ | 1,240.3 |      |      | $ | 858.6 |      |      | $ | 674.4  |      |       | $    | 409.5 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Earnings from continuing operations before nonrecurring items |                                         |         | 73.4    |       |      |      | 70.9    |       |      |      | 75.4    |       |      |      | 69.1    |       |      |      | 53.8    |       |      |   | 49.2    |      |      |   | 31.2  |      |      |   | 16.7   |      |       |      | 6.9   |     
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Percent of sales                        |         |         | 4.6   | %    |      |         | 4.4   | %    |      |         | 5.0   | %    |      |         | 4.8   | %    |      |         | 4.0   | %    |   |         | 4.0  | %    |   |       | 3.6  | %    |   |        | 2.5  | %     |      |       | 1.7  | %  
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Percent of average shareholders equity |         |         | 15.1  | %    |      |         | 14.7  | %    |      |         | 15.9  | %    |      |         | 15.1  | %    |      |         | 15.0  | %    |   |         | 23.0 | %    |   |       | 22.1 | %    |   |        | 12.9 | %     |      |       | 5.2  | %  
|                                                             
|                                                             
|                                                             
|                                                             
|Nonrecurring items after tax                                  |                                         |         | (1.1    | )(a)  |      |      | (.8     | )(b)  |      |      |        |       |      |      |        |       |      |      |        |       |      |   | (3.8    | )(c) |      |   |      |      |      |   | (22.8  | )(d) |       |      |      |     
|                                                             
|                                                             
|                                                             
|                                                             
|Earnings (loss) from continuing operations                    |                                         |         | 72.3    |       |      |      | 70.1    |       |      |      | 75.4    |       |      |      | 69.1    |       |      |      | 53.8    |       |      |   | 45.4    |      |      |   | 31.2  |      |      |   | (6.1   | )    |       |      | 6.9   |     
|                                                              | Per common share                        |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |      |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Basic   |         |       | 2.06 |      |         |       | 1.90 |      |         |       | 1.93 |      |         |       | 1.74 |      |         |       | 1.42 |   |         |      | 1.33 |   |       |      | .93  |   |        |      | (.20  | )    |       |      | .24 | 
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Diluted |         |       | 2.06 |      |         |       | 1.89 |      |         |       | 1.91 |      |         |       | 1.72 |      |         |       | 1.41 |   |         |      | 1.32 |   |       |      | .92  |   |        |      | (.20  | )(e) |       |      | .24 | 
|                                                             
|                                                             
|                                                             
|                                                             
|Earnings (loss) from discontinued operations                  |                                         |         |        |       |      |      |        |       |      |      | (33.9   | )(f)  |      |      | 11.5    |       |      |      | 12.5    |       |      |   | 60.2    | (f)  |      |   | 6.5   |      |      |   | (39.3  | )(f) |       |      | 9.2   |     
|                                                              | Per common share                        |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |      |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Basic   |         |       |     |      |         |       |     |      |         |       | (.87 | )    |         |       | .29  |      |         |       | .33  |   |         |      | 1.78 |   |       |      | .19  |   |        |      | (1.26 | )    |       |      | .34 | 
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Diluted |         |       |     |      |         |       |     |      |         |       | (.86 | )    |         |       | .29  |      |         |       | .33  |   |         |      | 1.75 |   |       |      | .19  |   |        |      | (1.26 | )(e) |       |      | .33 | 
|                                                             
|                                                             
|                                                             
|                                                             
|Net earnings (loss)                                           |                                         |         | 72.3    |       |      |      | 70.1    |       |      |      | 41.5    |       |      |      | 80.6    |       |      |      | 66.3    |       |      |   | 105.6   |      |      |   | 37.7  |      |      |   | (101.9 | )(g) |       |      | 21.5  | (g) 
|                                                              | Per common share                        |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |      |    
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Basic   |         |       | 2.06 |      |         |       | 1.90 |      |         |       | 1.06 |      |         |       | 2.03 |      |         |       | 1.75 |   |         |      | 3.11 |   |       |      | 1.12 |   |        |      | (3.26 | )    |       |      | .78 | 
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              |                                         | Diluted |         |       | 2.06 |      |         |       | 1.89 |      |         |       | 1.05 |      |         |       | 2.01 |      |         |       | 1.74 |   |         |      | 3.07 |   |       |      | 1.11 |   |        |      | (3.26 | )(e) |       |      | .77 | 
|                                                             
|Financial Position at Year-End                                |                                         |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |     
|                                                             
|                                                             
|                                                             
|                                                             
|Working capital                                               |                                         |         | 249.9   |       |      |      | 160.7   |       |      |      | 179.6   |       |      |      | 325.7   |       |      |      | 318.3   |       |      |   | 392.7   |      |      |   | 151.4 |      |      |   | 114.3  |      |       |      | 191.8 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Property, plant and equipment-net                             |                                         |         | 305.5   |       |      |      | 323.2   |       |      |      | 350.9   |       |      |      | 343.1   |       |      |      | 319.1   |       |      |   | 265.5   |      |      |   | 198.8 |      |      |   | 184.0  |      |       |      | 121.1 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Total assets                                                  |                                         |         | 1,464.9 |       |      |      | 1,536.7 |       |      |      | 1,557.1 |       |      |      | 1,392.5 |       |      |      | 1,336.3 |       |      |   | 1,173.7 |      |      |   | 787.6 |      |      |   | 729.6  |      |       |      | 578.9 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Long-term debt                                                |                                         |         | 382.6   |       |      |      | 298.1   |       |      |      | 335.7   |       |      |      | 304.2   |       |      |      | 301.9   |       |      |   | 332.2   |      |      |   | 143.0 |      |      |   | 107.6  |      |       |      | 154.4 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Total debt                                                    |                                         |         | 476.6   |       |      |      | 522.8   |       |      |      | 520.9   |       |      |      | 371.7   |       |      |      | 372.8   |       |      |   | 355.8   |      |      |   | 226.9 |      |      |   | 185.2  |      |       |      | 175.6 |     
|                                                             
|                                                             
|                                                             
|                                                             
|Shareholders equity                                          |                                         |         | 484.4   |       |      |      | 490.9   |       |      |      | 476.6   |       |      |      | 471.9   |       |      |      | 446.2   |       |      |   | 270.7   |      |      |   | 157.8 |      |      |   | 124.1  |      |       |      | 134.4 |     
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Per common share                        |         |         | 14.37 |      |      |         | 13.18 |      |      |         | 12.45 |      |      |         | 11.77 |      |      |         | 11.06 |      |   |         | 7.72 |      |   |       | 4.50 |      |   |        | 3.53 |       |      |       | 4.67 |    
|                                                             
|Other Data                                                    |                                         |         |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |      |         |       |      |   |         |      |      |   |       |      |      |   |        |      |       |      |       |     
|                                                             
|                                                             
|                                                             
|                                                             
|Dividends paid to common shareholders                         |                                         |         | 16.8    |       |      |      | 17.9    |       |      |      | 18.8    |       |      |      | 16.8    |       |      |      | 13.4    |       |      |   | 12.3    |      |      |   | 12.2  |      |      |   | 11.6   |      |       |      | 10.0  |     
|                                                             
|                                                             
|                                                             
|                                                             
|                                                              | Per common share                        |         |         | .48   |      |      |         | .48   |      |      |         | .48   |      |      |         | .42   |      |      |         | .36   |      |   |         | .36  |      |   |       | .36  |      |   |        | .36  |       |      |       | .36  |    
|                                                             
|                                                             
|                                                             
|                                                             
|Capital expenditures                                          |                                         |         | 47.0    |       |      |      | 47.3    |       |      |      | 81.4    |       |      |      | 79.5    |       |      |      | 65.2    |       |      |   | 52.3    |      |      |   | 43.0  |      |      |   | 23.4   |      |       |      | 17.6  |     
|                                                             
|                                                             
|                                                             
|                                                             
|Depreciation and amortization                                 |                                         |         | 58.4    |       |      |      | 58.3    |       |      |      | 57.4    |       |      |      | 53.7    |       |      |      | 50.9    |       |      |   | 43.6    |      |      |   | 28.6  |      |      |   | 26.1   |      |       |      | 20.9  |     
|                                                             
|                                                             
|                                                             
|                                                             
|Backlog of unfilled orders at year-end                        |                                         |         | 181.3   |       |      |      | 242.9   |       |      |      | 246.5   |       |      |      | 195.6   |       |      |      | 212.2   |       |      |   | 226.7   |      |      |   | 169.7 |      |      |   | 118.7  |      |       |      | 69.7  |     
|                                                             
|                                                             
|                                                             
|                                                             
|Employees (average)                                           |                                         |         | 10,922  |       |      |      | 11,758  |       |      |      | 10,993  |       |      |      | 10,450  |       |      |      | 10,466  |       |      |   | 8,840   |      |      |   | 5,812 |      |      |   | 4,427  |      |       |      | 3,042 |     
|                                                             

|    |                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents a gain of $1.5 million
	($.8 million after tax) on the sale of the companys
	industrial magnets business and restructuring costs of $2.7
	million ($1.9 million after tax).                                                                                                                                                                                                                   
|(b) | Represents a gain of $13.1 million
	($10.1 million after tax) on the sale of the companys
	European plastics extrusion systems business and restructuring
	costs of $16.2 million ($10.9 million after
	tax).                                                                                                                                                                                            
|(c) | Represents a gain of $5.0 million
	($4.0 million after tax) on the sale of the companys
	American Mine Tool business and a charge of $9.8 million
	($7.8  million after tax) for the integration of certain
	Widia and Valenite operations.                                                                                                                                                              
|(d) | Represents a charge of $22.8 million (with
	no current tax effect) for the disposition of the companys
	Sano business.                                                                                                                                                                                                                                                                                   
|(e) | For 1993, diluted earnings per common share is
	equal to basic earnings per share because the inclusion of
	potentially dilutive securities would result in a smaller loss
	per common share.                                                                                                                                                                                                             
|(f) | In 1998, includes a loss of $45.9 million
	($35.2 million after tax) on the sale of the companys
	machine tools segment. In 1995, includes a gain of
	$66.0 million ($52.4 million after tax) on the sale of
	the companys Electronic Systems Division. In 1993,
	includes a charge of $47.1 million (with no current tax
	effect) for the consolidation of U.S. machine tool manufacturing
	operations.
|(g) | In 1993, includes an after tax extraordinary
	charge of $4.4 million, or $.14 per common share, for loss
	on early extinguishment of debt and an after tax charge of
	$52.1 million, or $1.66 per common share, for the
	cumulative effect of changes in methods of accounting. In 1992,
	includes an extraordinary tax benefit from loss carryforward of
	$5.4  million, or $.20 per common share.       

11



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##### Table of Contents








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

Results of Operations

Milacron operates in two business segments:
plastics technologies and metalworking technologies.


Discontinued Operations

On October 2, 1998, we completed the sale of
our machine tools group (MTG) for proceeds of approximately
$187 million, including post-closing adjustments. All
comparisons of results of operations related to the
year 1998 in this Managements Discussion and Analysis
exclude the historical operations of MTG.


Acquisitions

In May, 2000, we acquired Akron Extruders, Inc.,
a single-screw plastics extrusion manufacturer having annual
sales of approximately $5 million. The manufacture of Akron
Extruders lines of single-screw extruders and replacement
barrels and screws has been moved to our principal U.S. plastics
machinery facility near Cincinnati. The acquisition gives us a
new presence in the single-screw extrusion market following the
divestiture of our European extrusion systems business in
December, 1999.


In October, 2000, we acquired Ontario Heater and
Supply Company and Rite-Tek Canada (Rite-Tek), two Canadian
companies that specialize in the distribution of maintenance,
repair and operating supplies for the plastics processing
industry. Rite-Tek also manufactures heater bands used in
plastics processing. The combined sales of the two companies are
approximately $5 million per year.

All of the businesses acquired in 2000 are
included in the plastics technologies segment.

In July, 1999, we acquired Nickerson Machinery
Inc., Pliers International Inc., and Plastic Moulding Supply
Ltd. (collectively, Nickerson). With annual sales of
$7 million as of the acquisition date, Nickerson sells
supplies and equipment for plastic processing through two
catalog distribution centers in the U.S. and one in the U.K. The
operation in the U.K. also manufactures and refurbishes screws
and barrels for small injection molding machines.

In August, 1999, we acquired Producto Chemical,
Inc. (Producto), which manufactures process cleaners, washers,
corrosion inhibitors and specialty products for metalworking.
Producto had annual sales approaching $5 million as of the
acquisition date.

In September, 1999, we acquired Oak
International, Inc. (Oak), a supplier of lubricants and process
cleaners used in metalforming and metalworking. Oak has three
manufacturing plants, including two in the U.S. and one in the
U.K., and had annual sales approaching $12 million as of
the acquisition date.

In September, 1999, we acquired the Micro Carbide
product line, which includes solid carbide reamers, step drills
and miniature tools. These products are now being manufactured
by our Data Flute facility.

Of the businesses acquired in 1999, Nickerson is
included in the plastics technologies segment while Producto,
Oak and Micro Carbide are included in the metalworking
technologies segment.

In February, 1998, we acquired Wear Technology
and Northern Supply. Wear Technology is a McPherson, Kansas
company with annual sales of approximately $10 million as
of the acquisition date which primarily serves the aftermarket
for new and rebuilt twin screws for extrusion systems. Northern
Supply, with annual sales of approximately $5 million,
offers supplies to plastics processors for injection molding,
blow molding and extrusion through distribution centers in
Minneapolis, Minnesota and Charlotte, North Carolina.

In May, 1998, we acquired Autojectors, Inc., a
leading U.S. producer of vertical insert injection molding
machinery widely used to make medical, electrical and automotive
components. With annual sales of approximately $20 million as of
the acquisition date, Autojectors had previously operated
through two manufacturing facilities near Fort Wayne, Indiana.
However, one of these plants was closed late in 1999 in
connection with our program to improve operating efficiency (see
Restructuring Costs).

Effective September 30, 1998, we acquired
Master Unit Die Products, Inc., a leading North American
manufacturer of quick-change mold bases for the plastics
industry. Master Unit Die Products has annual sales in excess of
$10 million.

Also on September 30, 1998, we acquired the
assets of Uniloy, the plastics machinery division of Johnson
Controls, Inc., for approximately $204 million. Uniloy,
which is known for its Uniloy brand of equipment, as well as
various other brands, had sales of more than $190 million
for its fiscal year ended on September 30, 1998, and is one
of the worlds leading providers of blow molding machines,
as well as structural foam systems, aftermarket parts, services
and molds for blow molding.

On December 30, 1998, we acquired
Werkzeugfabrik GmbH Königsee (Werkö), a manufacturer
of high-speed steel drills. Located in eastern Germany,
Werkö had annual

12



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##### Table of Contents



sales of approximately $25 million as of the
acquisition date.


With the exception of Werkö, all of the
businesses acquired in 1998 are included in the plastics
technologies segment from the respective dates of acquisition.
Werkö is included in the metalworking technologies
segment.

All of the acquisitions discussed above were
financed through available cash and bank borrowings and have
been accounted for under the purchase method of
accounting.

Presence Outside the U.S.

In recent years, Milacrons growth outside
the U.S. has allowed it to become more globally balanced. For
2000, markets outside the U.S. represented the following
percentages of consolidated sales: Europe 23%; Asia 7%; Canada
and Mexico 7%; and the rest of the world 2%. As a result of the
companys geographic mix, foreign currency exchange rate
fluctuations affect the translation of sales and earnings, as
well as consolidated shareholders equity. During 2000, the
weighted-average exchange rate of the euro was weaker in
relation to the U.S. dollar than in 1999. Because of the
comparative strength of the dollar, we experienced unfavorable
currency translation effects on new orders and sales of
$60 million and $76 million, respectively, in relation
to 1999. The strength of the dollar also had the effect of
reducing consolidated earnings before interest and taxes by more
than $3 million in 2000.


Between December 31, 1999 and
December 31, 2000, the euro weakened against the dollar by
approximately 10%. This resulted in a $14 million reduction
in consolidated shareholders equity due to unfavorable
foreign translation adjustments.

If the euro and other currencies should weaken
further against the dollar in future periods, we will once again
experience a negative effect in translating our non-U.S. new
orders, sales and earnings when compared to historical
results.

2000 Compared to 1999

New Orders and Backlog

Consolidated new orders in 2000 were
$1,553 million, a decrease of $56 million, or 3.5%, in
relation to 1999. In 1999, consolidated new orders included
$63 million related to our European extrusion systems
business that was sold in December of that year. The sale of our
German-based industrial magnets business in September, 2000,
also had the effect of reducing new orders by $5 million in
relation to 1999, while acquisitions contributed an incremental
$17 million. Excluding acquisitions and divestitures,
consolidated orders were essentially flat in relation to 1999.
As discussed above, foreign currency exchange rate fluctuations
had the effect of reducing orders for the year by
$60 million. Excluding currency and acquisition and
divestiture effects, orders for the year increased by more than
3%.


In the plastics technologies segment, new orders
totaled $835 million, a decrease of $62 million in
relation to 1999 that was due principally to the absence of the
European extrusion systems business and unfavorable foreign
currency effects that reduced orders by $25 million.
Excluding the divestiture and the contribution of the
acquisitions made in 1999 and 2000, the segments orders
decreased by 1%. Excluding the aforementioned adverse currency
effects in addition to acquisitions and divestitures, orders
increased by more than 2%. Orders for injection molding machines
increased in both North America and Europe. Orders for
U.S.-built extrusion systems decreased modestly but remained at
good levels. Orders for Uniloy blow molding systems also
decreased due in part to the ongoing consolidation of the dairy
industry in North America.

Orders for metalworking technologies products
totaled $717 million in 2000, representing only a modest
decrease in relation to 1999 despite unfavorable currency
effects of $35 million. Excluding the effects of currency,
the sale of the industrial magnets business and the
segments 1999 acquisitions, orders for the year increased
by 5%. Orders for metalworking fluids increased worldwide but
especially in North America due to the expanded product
offerings that resulted from the 1999 acquisitions. Orders for
Valenite metalcutting tools increased in North America, as did
orders for Widia products in Europe as measured in local
currencies. Orders for round tools decreased slightly due in
part to currency effects.

U.S. export orders totaled $124 million in
2000 compared to $149 million in 1999. The decrease
resulted principally from lower export orders for injection
molding machines and Uniloy products.

The companys backlog of unfilled orders was
$181 million at December 31, 2000, compared to
$243 million at December 31, 1999. The decrease is due
principally to continuing low order levels for Uniloy blow
molding systems and lower fourth quarter, 2000, demand for
injection molding machines and U.S.-built extrusion
systems.

Sales

Consolidated sales in 2000 were
$1,584 million, representing a $41 million, or 2.5%,
decrease in relation to 1999 sales of $1,625 million.
Unfavorable currency effects reduced consolidated sales by
$76 million. In 1999, consolidated sales included
$62 million related to the European extrusion systems
business. Excluding the effects of the sales of this business
and the industrial magnets business


13



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##### Table of Contents



as well as acquisitions, consolidated sales
increased by 1%. However, excluding currency effects in addition
to acquisitions and divestitures, sales increased by more than
5% in relation to 1999.


Sales of the plastics technologies segment were
$874 million in 2000 compared to $904 million in 1999.
The absence of the European extrusion systems business more than
accounted for the decrease. Excluding the effects of the
divestiture and the contribution of the segments recent
acquisitions, sales increased by 3%. Unfavorable foreign
currency exchange rate effects reduced sales by $32 million
in relation to 1999. Adjusting for currency effects and for
acquisitions and the divestiture, sales for the year increased
by more than 6%. Sales of injection molding machines increased
in both North America and Europe, the latter despite adverse
currency effects. Sales of U.S.-built extrusion systems also
increased for the year despite a modest decrease in the fourth
quarter, but sales of Uniloy blow molding systems decreased
worldwide due to the dairy industry consolidation in North
America and lower shipments to European and Asian markets.

Sales of metalworking technologies products were
$710 million in 2000, representing only a modest decrease
of $11 million in relation to $721 million in 1999
despite unfavorable currency effects of $43 million and the
sale of the Widia industrial magnets business in September,
2000. Excluding these factors and the contribution of the
segments 1999 acquisitions, sales for the year increased
by more than 4%. Sales of metalworking fluids increased
worldwide while sales of Valenite metalcutting products in North
America and round tools worldwide approximated the levels
achieved in 1999. Sales of Widia products in Europe increased in
local currencies but decreased as measured in U.S. dollars due
to the strength of the dollar in relation to the euro and other
currencies.

Consolidated export sales were $133 million
in 2000, compared to $148 million in 1999. The decrease resulted
principally from lower export shipments of Uniloy products and,
to a lesser degree, injection molding machines.

Sales of both segments to non-U.S. markets
totaled $613 million, a decrease in 2000 of
$102 million that was due principally to currency effects
and the aforementioned divestitures. In 2000 and 1999, products
manufactured outside the U.S. approximated 36% and 40% of sales,
respectively, while products sold outside the U.S. approximated
39% of sales in 2000 and 44% in 1999.

Margins, Costs and Expenses

The consolidated manufacturing margin was 25.9%
in 2000 compared to 26.0% in 1999, as both segments approximated
the results achieved in 1999. In the plastics technologies
segment, lower margins for Uniloy products, particularly in
Europe, offset the effect of margin improvements for injection
molding machines and extrusion systems. The overall margin for
the metalworking technologies segment decreased modestly due to
lower margins for grinding wheels and metalworking fluids, the
latter being due in part to higher oil prices.


Total selling and administrative expense
decreased in amount and as a percentage of sales in 2000 due in
part to our aggressive cost reduction efforts that began in 1999
and continued in 2000. Selling expense decreased by
$8.2 million from 14.4% of sales to 14.2% of sales.
Administrative expenses for the year decreased by
$1.8 million.

Other expense-net decreased from
$10.0 million in 1999 to $5.8 million in 2000 due to
increased royalty income from the licensing of patented plastics
processing technology and higher gains on the disposal of
surplus property and equipment. These benefits were partially
offset by higher goodwill amortization expense and increased
costs related to the sale of receivables.

Interest expense-net increased in 2000 due
primarily to higher short-term interest rates despite lower
average debt levels.

Restructuring Costs

In 1999, we initiated two separate programs to
improve operating efficiency and strengthen synergies between
certain recently acquired businesses and our previously existing
operations.


In September, 1999, we announced a formal plan to
consolidate Uniloys European blow molding operations in a
new manufacturing facility located near Milan, Italy. At the
time Uniloy was acquired in September, 1998, we recognized the
need for improved efficiency within Uniloys European
operations and immediately thereafter began to evaluate various
options for the purpose of identifying the optimal long-term
solution. Through that process, it was determined that certain
of the manufacturing and assembly operations at the plants
located in Florence and Milan, Italy and Berlin, Germany would
be consolidated into a more modern plant near Milan and that
other operations would be transferred to another plant located
in the Czech Republic. In the second quarter of 1999, we began
to develop a detailed plan for the consolidation, which was
formally approved by management in August, 1999.

The total cost of the plan, which was initiated
in the fourth quarter of 1999 and which will be completed in the
first half of 2001, was originally expected to be approximately
$6.7 million. However, foreign currency exchange

14



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##### Table of Contents



rate fluctuations since the acquisition date and
lower than expected costs to relocate inventory and equipment
have had the effect of reducing the total cost as measured in
U.S. dollars to approximately $5.5 million, including $.7
million that is being charged to expense as incurred. Of the
latter amount, $.5 million was expensed in 2000. The remainder
of the total cost of the consolidation is included in a reserve
for employee termination benefits and facility exit costs that
was established in the allocation of the Uniloy acquisition
cost. The original amount of the reserve was $5.7 million
but foreign currency exchange rate fluctuations have had the
effect of reducing it by $.9 million, including
$.2 million in 2000. Charges against the reserve in 2000
were $2.5 million. To the extent that any used reserve
remains after the completion of the consolidation, that amount
will be applied as a reduction of the goodwill related to the
Uniloy acquisition.


The total cash cost of the consolidation is
currently expected to be approximately $3 million, which is
net of the expected proceeds from the sale of two facilities in
Italy, one of which was sold in the fourth quarter of 2000. The
consolidation has reduced revenues in 2000 but is not expected
to adversely affect revenues by the second half of 2001.
Completion of the consolidation is expected to result in annual
pretax cost savings of approximately $3 million, which
began to phase-in during the second quarter of 2000.

In December, 1999, we initiated a second plan to
improve operating efficiency and reduce costs at additional
businesses. The actions contemplated by the plan involve both
segments operations in North America and Europe. The plan
involves the closure of four smaller manufacturing facilities,
the operations of which have been transferred to other
locations, and the elimination of approximately 310
manufacturing and administrative positions worldwide,
substantially all of which have been eliminated as of
December 31, 2000. The cost of implementing the plan was
originally expected to be $20.8 million. However, as a result of
lower than expected costs for employee, inventory and equipment
relocation and  to a significantly lesser
degree  lower severance and other termination
benefits, the total cost is now expected to be
$18.2 million, including $16.0 million in 1999 and
$2.2 million in 2000. Of the 1999 amount,
$14.1 million was included in a reserve for employee
termination benefits and facility exit costs that was recorded
in the fourth quarter. Charges against this reserve in 2000
totaled $11.4 million. Foreign currency exchange rate
fluctuations had the effect of reducing the reserve by an
additional $.8 million. In addition, excess reserves for
employee termination benefits and facility exit costs totaling
$.3 million were reversed in the third and fourth quarters
of 2000. The total cost of the plan also includes 1999 charges
of $1.7 million for supplemental early retirement benefits
for certain employees that are being funded through pension
plans and $2.7 million for additional costs that are being
charged to expense as incurred. Of the latter amount,
$2.5 million was expensed in 2000.

The total cash cost of the plan, including
capital expenditures of $3.6 million, is expected to be
approximately $15.3 million, most of which was expended in
2000. Completion of the plan will result in annual pretax cost
savings of more than $20 million, which phased-in during
2000 and which are expected to be fully realized in 2001.

As presented in the Consolidated Statements of
Earnings for 2000 and 1999, the line captioned
Restructuring costs includes the following
components:



---

Restructuring Costs





|                                                         |                     |      |     |      |   |   |      |    | 
|-------------------------------------------------------- | ------------------- | ---- | --- | ---- | - | - | ---- | -- | 
|(In millions)                                            |                     | 2000 |     | 1999
|                                                        
|                                                        
|Accrual for termination benefits and facility exit costs |                     | $    |    |      |   | $ | 14.1 |   
|                                                        
|                                                        
|                                                        
|                                                        
|Supplemental retirement benefits                         |                     |      |    |      |   |   | 1.7  |   
|Other restructuring costs                                |                     |      |     |      |   |   |      |   
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Charges to expense  |      |     | 2.5  |   |   |      | .2 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Reserve adjustments |      |     | (.3  | ) |   |      |   | 
|                                                         |                     |      |     |      |   |   |      |   
|                                                         |                     |      | 2.2 |      |   |   | 16.0 |   
|                                                        
|                                                        
|                                                        
|                                                        
|Costs related to the Uniloy consolidation                |                     |      | .5  |      |   |   | .2   |   
|                                                         |                     |      |     |      |   |   |      |   
|                                                         |                     | $    | 2.7 |      |   | $ | 16.2 |   
|                                                         |                     |      |     |      |   |   |      |   
|                                                        

15



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##### Table of Contents



The status of the reserves for the two
initiatives discussed above is summarized in the following
table.



---

Restructuring Reserves





|                                        |                      |           |      |        |  |         |       |      |   |   |      |     | 
|--------------------------------------- | -------------------- | --------- | ---- | ------ |  | ------- | ----- | ---- | - | - | ---- | --- | 
|                                        |                      |          
|                                        |                      | 2000     
|                                       
|                                       
|                                        |                      | Beginning |      |        |  | Ending 
|(In millions)                           |                      | Balance   |      | Change |  | Balance
|                                       
|                                       
|Uniloy consolidationTermination costs   |                      | $         | 3.6  |        |  | $       | (2.2  | )    |   | $ | 1.4  |    
|                                       
|                                       
|                                       
|                                       
|                                        | Facility exit costs  |           |      | .7     |  |         |       | (.5  | ) |   |      | .2  | 
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|                                        |                      |           | 4.3  |        |  |         | (2.7  | )    |   |   | 1.6  |    
|                                       
|                                       
|                                       
|                                       
|Restructuring costsTermination benefits |                      |           | 9.4  |        |  |         | (9.1  | )    |   |   | .3   |    
|                                       
|                                       
|                                       
|                                       
|                                        | Facility exit costs  |           |      | 3.8    |  |         |       | (3.4 | ) |   |      | .4  | 
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|                                        |                      |           | 13.2 |        |  |         | (12.5 | )    |   |   | .7   |    
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|Total reserves                          |                      | $         | 17.5 |        |  | $       | (15.2 | )    |   | $ | 2.3  |    
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|                                       
|                                        |                      | 1999     
|                                       
|                                       
|Uniloy consolidation                    |                      |           |      |        |  |         |       |      |   |   |      |    
|                                       
|                                       
|                                       
|                                       
|                                        | Termination costs    |           | $    | 4.6    |  |         | $     | (1.0 | ) |   | $    | 3.6 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Facility exit costs  |           |      | 1.1    |  |         |       | (.4  | ) |   |      | .7  | 
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|                                        |                      |           | 5.7  |        |  |         | (1.4  | )    |   |   | 4.3  |    
|Restructuring costs                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                                       
|                                       
|                                       
|                                       
|                                        | Termination benefits |           |      | 10.0   |  |         |       | (.6  | ) |   |      | 9.4 | 
|                                       
|                                       
|                                       
|                                       
|                                        | Facility exit costs  |           |      | 4.1    |  |         |       | (.3  | ) |   |      | 3.8 | 
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|                                        |                      |           | 14.1 |        |  |         | (.9   | )    |   |   | 13.2 |    
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    
|Total reserves                          |                      | $         | 19.8 |        |  | $       | (2.3  | )    |   | $ | 17.5 |    
|                                        |                      |           |      |        |  |         |       |      |   |   |      |    

Divestiture of Business

In September, 2000, we completed the sale of our
German-based industrial magnets business, Widia Magnet
Engineering, for approximately $14 million and recorded a
pretax gain of $1.5 million ($.8 million after tax).
With 1999 annual sales of approximately $30 million, Widia
Magnet Engineering has approximately 280 employees and
manufactures and sells both soft and permanent magnets used in
automotive and other applications. The business was included in
the acquisition of Widia GmbH in 1995 and was sold to redeploy
assets to other businesses.


In December, 1999, we completed the sale of our
European extrusion machinery business, which was headquartered
in Vienna, Austria, for cash proceeds of $44 million
including post-closing adjustments. The pretax gain on the sale
was $13.1 million ($10.1 million after tax). The
European extrusion business had sales to unaffiliated customers
of $62 million in 1999, principally to markets in Europe,
Asia and South America. The business was sold to redeploy assets
to other more strategic businesses.

Earnings From Continuing Operations Before Income Taxes and
Minority Shareholders Interests

Earnings before income taxes and minority
shareholders interests were $100.7 million in 2000
compared to $98.9 million in 1999. The 2000 amount includes
a pretax gain of $1.5 million on the sale of the industrial
magnets business and restructuring costs of $2.7 million
related to the programs that were initiated in 1999. Pretax
earnings for 1999 includes a gain of $13.1 million on the sale
of the European extrusion systems business and restructuring
costs of $16.2 million. Excluding these items, pretax
earnings in 2000 approximated the results achieved in
1999.


Income Taxes

The provision for income taxes in 2000 and 1999
includes U.S. federal and state and local income taxes and
income taxes in other jurisdictions outside the U.S.


Milacron entered both 2000 and 1999 with sizable
net operating loss (NOL) carryforwards in certain non-U.S.
jurisdictions, along with valuation allowances against the NOL
carryforwards and other deferred tax assets. We review valuation
allowances periodically based on the relative amount of positive
and negative evidence available at the time. This is done for
the purpose of reaching conclusions regarding the future
realization of deferred tax assets. Valuation allowances are
then adjusted accordingly. The resulting decreases or increases
in valuation allowances serve to favorably or unfavorably affect
our effective tax rate.

Our effective tax rate for 2000 was 25% compared
to 27% in 1999. The rate for 2000 is lower than the U.S. federal
statutory rate due principally to the reversal of valuation
allowances in certain jurisdictions and the adjustment of income
tax reserves to more accurately reflect actual expected
liabilities. These benefits were partially offset by the
downward adjustment of the carrying value of our net deferred
tax assets in Germany to a lower rate as a result of a tax law
change in that country. Adjustments of valuation allowances did
not have a material effect on the effective tax rate for 1999.
However, the effective rate was lower than the U.S. federal
statutory rate primarily as a result of tax reserve
adjustments.

Net Earnings

For 2000, net earnings were $72.3 million,
or $2.06 per share (diluted), compared to $70.1 million, or
$1.89 per share (diluted), for 1999. The percentage increase in
per-share earnings exceeds the percentage increase in net


16



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##### Table of Contents



earnings due to fewer common shares outstanding
in 2000 as a result of our common share repurchase program which
is discussed below. The net earnings and earnings per share
amounts for 2000 include after-tax restructuring costs of
$1.9 million, or $.05 per share, and the after-tax gain on
the sale of the industrial magnets business of $.8 million,
or $.02 per share. The amounts for 1999 include restructuring
costs of $10.9 million, or $.29 per share, and the gain on
the sale of the European extrusion business of
$10.1 million, or $.27 per share. Excluding all of the
aforementioned items, net earnings increased from
$70.9 million in 1999 to $73.4 million in 2000.


1999 Compared to 1998

New Orders and Backlog

Consolidated new orders in 1999 were
$1,609 million, which represented a $97 million, or
6%, increase from $1,512 million in 1998. Foreign currency
exchange rate fluctuations had the effect of reducing new orders
by $24 million, while acquisitions contributed an incremental
$148 million in relation to 1998. Excluding currency
effects and acquisitions, consolidated new orders decreased by
$27 million, or 2%.


Orders for plastics technologies products
increased by $99 million, or 12%, to $897 million due
entirely to the effects of the 1998 and 1999 acquisitions which
contributed an incremental $117 million in relation to
1998. Without the acquisitions and currency effects, the
segments new orders were essentially flat. Orders for
extrusion systems increased, particularly in the U.S., while
orders for injection molding machines decreased worldwide due in
part to unfavorable currency effects. In addition, the total
U.S. market for injection molding machinery decreased by
approximately 10%, which had a negative effect on domestic
orders.

In the metalworking technologies segment, new
orders were $712 million in 1999, which is essentially flat
in relation to $714 million in 1998. Acquisitions
contributed an incremental $31 million of orders while
currency effects reduced orders by $12 million in relation
to 1998. Orders for Widia metalcutting tools in Europe and
grinding wheels in North America decreased. Orders for round
tools increased due to the Werkö acquisition but were
penalized by reduced demand in the U.S. due to softness in the
aerospace market.

U.S. export orders were $149 million in 1999
representing a 10% increase from $135 million in 1998.
Uniloy more than accounted for the increase as export orders for
injection molding machines decreased.

The companys backlog of unfilled orders
totaled $243 million at December 31, 1999. This compares to
$247 million at December 31, 1998.

Sales

Consolidated sales in 1999 were
$1,625 million, which represented a $110 million, or 7%,
increase from $1,515 million in 1998. Currency effects
reduced consolidated sales by $30 million in relation to
1998, while acquisitions contributed $172 million.
Excluding these effects, consolidated sales decreased by
$32 million, or 2%.


In the plastics technologies segment, sales were
$904 million, representing a $108 million, or 14%,
increase in relation to 1998. The 1998 and 1999 acquisitions
more than accounted for the increase. Sales of injection molding
machines decreased worldwide due in part to the aforementioned
softness in the U.S. market, while sales of extrusion systems
increased.

Sales of the metalworking technologies segment
were $721 million compared to $718 million in 1998.
Acquisitions contributed $28 million of incremental sales
in 1999, while currency effects reduced reported sales by
$14 million. Excluding these effects, sales decreased by
$11 million, or almost 2%, due principally to reduced
shipments of Widia products in Europe and round metalcutting
tools in North America.

Export sales were $148 million in 1999
compared to $136 million in 1998. Uniloy more than
accounted for the increase.

Sales of both segments to non-U.S. markets
totaled $715 million, an increase in 1999 of
$35 million. In 1999 and 1998, products manufactured
outside the U.S. approximated 40% and 41% of sales,
respectively, while products sold outside the U.S. approximated
44% of sales in 1999 and 45% in 1998.

Margins, Costs and Expenses

The consolidated manufacturing margin was 26.0%
in 1999 compared to 27.9% in 1998. Margins decreased in the
plastics technologies segment due principally to reduced
shipments of injection molding machines and efficiency and
operating problems in Uniloys European operations. In
September of 1999, we announced a plan to improve efficiency at
Uniloy by consolidating its European manufacturing operations at
a new facility in Italy. Margins also decreased in the
metalworking technologies segment, particularly at Widia and for
round tools. As discussed below, in December, 1999, we
implemented a plan to improve manufacturing efficiency at
various operations in both segments.


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Total selling and administrative expense in 1999
was essentially flat in amount in relation to 1998 but decreased
significantly as a percentage of sales. Selling expense
decreased in amount by $3 million despite higher sales
volume due to aggressive cost reduction efforts. Administrative
expense increased due to the inclusion of Uniloy and the other
1998 acquisitions but also decreased as a percentage of
sales.

Other expense-net decreased from
$12.9 million in 1998 to $10.0 million in 1999. The
1999 amount includes higher goodwill amortization expense due
principally to the Uniloy acquisition. The net decrease resulted
principally from the absence of 1998 severance expenses totaling
$6.7 million related to approximately 155 employees at
Widia and at our extrusion machinery facility in Austria. These
actions were made to adjust staffing levels to current sales
projections and as a result of plant modernization and process
improvements.

Interest expense-net, including amortization of
debt issuance costs, increased in 1999 due primarily to higher
interest rates and higher average debt levels to finance working
capital requirements, acquisitions and the repurchase of common
shares in early 1999 and late 1998.

Restructuring Costs

As discussed more fully above, in 1999 we
initiated two separate programs to improve operating efficiency
and strengthen synergies between certain recently acquired
businesses and our previously existing operations. These actions
had the effect of reducing pretax earnings in the fourth quarter
of 1999 by $16.2 million ($10.9 million after
tax).


In September, 1999, we announced a formal plan to
consolidate Uniloys European blow molding operations in a
new manufacturing facility located near Milan, Italy, at an
expected cost of $6.7 million, of which $5.7 million
was included in a reserve established in the allocation of the
Uniloy acquisition cost. The remainder of the cost of the
consolidation is being charged to expense as incurred, including
$.2 million in 1999.

In December, we initiated a second plan to
improve operating efficiency and reduce costs at additional
businesses. Charges to expense in connection with the plan in
the fourth quarter of 1999 totaled $16.0 million including
$14.1 million that was included in a reserve for employee
termination benefits and facility exit costs. The total expense
for 1999 also includes $1.7 million for supplemental early
retirement benefits that are being funded through pension plans
and $.2 million for additional costs of the program that
are being charged to expense as incurred.

Charges against the reserves established for the
two initiatives discussed above during the fourth quarter of
1999 totaled $2.3 million.

Divestiture of Business

In December, 1999, we completed the sale of our
European extrusion machinery business, which was headquartered
in Vienna, Austria, for cash proceeds of $44 million
including post-closing adjustments. The pretax gain on the sale
was $13.1 million ($10.1 million after tax). The
European extrusion business had sales to unaffiliated customers
of $62 million in 1999, principally to markets in Europe,
Asia and South America. The business was sold to redeploy assets
to other more strategic businesses.

Earnings From Continuing Operations Before Income Taxes and
Minority Shareholders Interests

Pretax earnings from continuing operations,
including the gain on the sale of the European extrusion
business and the charges for restructuring costs, were
$98.9 million in 1999 compared to $107.2 in 1998. Excluding
these two items, pretax earnings were $102.0 million in
1999. Several factors contributed to the decrease including
higher net interest cost and goodwill amortization expense.
Lower operating earnings for injection molding machines and
round metalworking tools also held back profitability. These
factors were partially offset by the absence of the 1998
severance expenses that are discussed above and by our
aggressive actions to control selling and administrative
costs.


Income Taxes

The provision for income taxes in 1999 and 1998
includes U.S. federal and state and local income taxes and
income taxes in other jurisdictions outside the U.S.


Milacron entered both 1999 and 1998 with sizable
net operating loss (NOL) carryforwards in certain non-U.S.
jurisdictions, along with valuation allowances against the NOL
carryforwards and other deferred tax assets. We review valuation
allowances periodically based on the relative amount of positive
and negative evidence available at the time. This is done for
the purpose of reaching conclusions regarding the future
realization of deferred tax assets. Valuation allowances are
then adjusted accordingly. The resulting decreases or increases
in valuation allowances serve to favorably or unfavorably affect
our effective tax rate.

Our effective tax rate for 1999 was 27% compared
to 26% in 1998. The rate for 1999 is lower than the U.S. federal
statutory rate principally due to the adjustment of income tax
reserves to more accurately reflect actual expected

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liabilities. These benefits were partially offset
by the downward adjustment of the carrying value of our net
deferred tax assets in Germany to a lower rate. Net adjustments
of valuation allowances based on the process described above did
not materially effect the 1999 effective tax rate but was the
principal reason that the 1998 effective rate was less than the
statutory rate.


Earnings from Continuing Operations

Earnings from continuing operations, net of
minority shareholders interests, were $70.1 million,
or $1.89 per share (diluted), in 1999 compared to
$75.4 million, or $1.91 per share (diluted), in 1998. The
decrease resulted principally from higher net interest and
goodwill amortization expense, soft market conditions for
certain businesses and a slightly higher effective tax
rate.


Discontinued Operations

In 1998, discontinued operations reflects the
loss on the sale of the machine tools segment, which was sold on
October 2, 1998, and its operating results through the date
of sale.

Net Earnings

For 1999, net earnings were $70.1 million,
or $1.89 per share (diluted), compared to $41.5 million, or
$1.05 per share (diluted), for 1998. The most significant factor
affecting the net earnings comparison was the 1998 loss on the
sale of the machine tools segment.


Market Risk

Foreign Currency Exchange Rate Risk

Milacron uses foreign currency forward contracts
to hedge its exposure to adverse changes in foreign currency
exchange rates related to firm commitments arising from
international transactions. The company does not hold or issue
derivative instruments for trading purposes. At
December 31, 2000, Milacron had outstanding forward
contracts totaling $14.3 million compared to
$18.7 million at December 31, 1999. The potential loss
from a hypothetical 10% adverse change in foreign currency rates
on Milacrons foreign exchange contracts at December 31,
2000 or December 31, 1999 would not materially affect
Milacrons consolidated financial position, results of
operations, or cash flows.


Interest Rate Risk

At December 31, 2000, Milacron had fixed
interest rate debt of $227 million, including $115 million
of 8 3/8% Notes due March 15, 2004 and Euro 115 million
($105 million) of 7 5/8% Eurobonds due April 6,
2005. We also had floating rate debt totaling $250 million,
with interest fluctuating based primarily on changes in LIBOR.
At December 31, 1999, fixed rate debt totaled
$222 million and floating rate debt totaled
$301 million. We also sell up to $85 million of
accounts receivable under our receivables purchase agreement,
which results in financing costs that fluctuate based on changes
in commercial paper rates. As a result, annual interest expense
and financing costs fluctuate based on fluctuations in
short-term borrowing rates. The potential loss on floating rate
debt instruments from a hypothetical 10% increase in interest
rates would be approximately $2.4 million at
December 31, 2000 and $2.3 million at December 31,
1999.


Liquidity and Sources of Capital

At December 31, 2000, Milacron had cash and
cash equivalents of $41 million, representing a decrease of
$40 million from December 31, 1999. The 1999 amount
included $47 million of initial proceeds received in
connection with the sale of the European extrusion business,
most of which was used to repay bank borrowings early in
2000.


Operating activities provided $96 million of
cash in 2000, compared to $89 million provided in 1999. The
increase in cash provided resulted in part from steps taken to
better align production with demand and to improve working
capital management. The amount for 2000 includes the cash costs
of the previously discussed efficiency and restructuring
initiatives and the sale of an additional $10 million of
accounts receivable under our receivables purchase agreement.
During 1999, additional sales of receivables provided
$12 million of cash.

In 2000, investing activities resulted in a
$33 million use of cash, due to capital expenditures of
$47 million and acquisitions of $7 million, the
effects of which were partially offset by the proceeds from the
sale of the industrial magnets business. In 1999, investing
activities used $39 million of cash, including capital
expenditures of $47 million and acquisitions of $47
million. The sale of the European extrusion systems business
provided $47 million of cash in 1999.

During 2000, financing activities used
$101 million of cash, including $48 million for common
share repurchases and $151 million for repayments of debt.
The latter amount includes $100 million for the repayment
of the companys 7 7/8% Notes due May 15, 2000 using
the proceeds from a Euro 115 million ($110 million)
Eurobond debt offering that was completed on April 6, 2000.
Financing activities used $16 million of cash in 1999 due to
common share repurchases of $22 million and dividend
payments of $18 million which offset net additional
borrowings of $24 million.

In the fourth quarter of 1998, we announced a two
million common share repurchase program, of which

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1.2 million shares were repurchased through
December 31, 1998. The remainder of the shares were
repurchased in the first quarter of 1999. In the first quarter
of 2000, our Board of Directors authorized the repurchase of up
to four million additional common shares on the open market, of
which 3.3 million had been repurchased through
December 31, 2000.


As of December 31, 2000, Milacrons
current ratio was 1.6, compared to 1.3 at December 31,
1999. The increase in the current ratio was due principally to
the repayment of the 7 7/8% Notes due May 15,
2000.

As of December 31, 2000, Milacron had lines
of credit with various U.S. and non-U.S. banks of approximately
$574 million, including a $375 million committed
revolving credit facility. Under the provisions of the facility,
our additional borrowing capacity totaled approximately
$287 million at December 31, 2000.

Total debt was $477 million at
December 31, 2000, representing a decrease of
$46 million from December 31, 1999. Total
shareholders equity was $484 million at December 31,
2000, a decrease of $7 million from December 31, 1999.
The decrease resulted from $14 million of unfavorable
foreign currency translation effects and the share repurchase
program that more than offset earnings net of dividends paid.
The ratio of total debt to total capital (debt plus equity)
decreased from 52% at December 31, 1999 to 50% at
December 31, 2000 due principally to the aforementioned net
reduction in outstanding debt.

We believe that Milacrons cash flow from
operations and its currently available credit lines are
sufficient to meet our operating, share repurchase and capital
requirements in 2001.

Outlook

Due to major cutbacks in capital spending for
plastics processing equipment and reduced automotive production
in North America, we expect that our sales for the first quarter
of 2001 will be about 10% lower than the first quarter of 2000
and 5% to 10% lower for the year. Per-share earnings are likely
to be in the $.10 to $.15 range in the first quarter compared to
$.41 per share in 2000 and down as much as 30% to 35% for the
full year.


As the industrial economy begins to recover, our
opportunities are encouraging and we expect to show
corresponding increases in sales and earnings. The successful
implementation of our company-wide efficiency measures and our
steady stream of new products will continue to help us increase
market share in many key areas and improve our overall
competitive position.

Cautionary Statement

Milacron wishes to caution readers about all of
the forward-looking statements in the Managements
Discussion and Analysis section and elsewhere. These
include all statements that speak about the future or are based
on our interpretation of factors that might affect our
businesses. Milacron believes the following important factors,
among others, could affect its actual results in 2001 and beyond
and cause them to differ materially from those expressed in any
of our forward-looking statements:




|  |                                                                                                                                                                                                                                                                                      
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | global and regional economic conditions, consumer
	spending and industrial production, particularly in segments
	related to the level of automotive production and spending in
	the construction industry;                                                                           
| 
| | fluctuations in currency exchange rates of U.S.
	and foreign countries, including countries in Europe and Asia
	where Milacron has several principal manufacturing facilities
	and where many of our competitors and suppliers are based;                                            
| 
| | fluctuations in domestic and non-U.S. interest
	rates which affect the cost of borrowing under Milacrons
	lines of credit and financing costs related to the sale of
	domestic accounts receivable;                                                                                 
| 
| | production and pricing levels of important raw
	materials, including plastic resins, which are a key material
	used by purchasers of Milacrons plastics technologies
	products, steel, oil, cobalt, tungsten and industrial grains
	used in the production of metalworking products;
| 
| | lower than anticipated levels of plant
	utilization resulting in production inefficiencies and higher
	costs, whether related to the delay of new product
	introductions, improved production processes or equipment, or
	labor relations issues;                                    
| 
| | customer acceptance of new products introduced
	during 2000 and additional new products that will be introduced
	in 2001;                                                                                                                                                            
| 
| | any major disruption in production at key
	customer or supplier facilities;                                                                                                                                                                                                          
| 
| | alterations in trade conditions in and between
	the U.S. and non-U.S. countries where Milacron does business,
	including export duties, import controls, quotas and other trade
	barriers;                                                                                           
| 
| | changes in tax, environmental and other laws and
	regulations in the U.S. and non-U.S. countries where Milacron
	does business;                                                                                                                                                      
| 
| | unanticipated litigation, claims or assessments,
	including but not limited to claims or problems related to
	product liability, warranty or environmental issues.                                                                                                                   

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

The Information required by Item 7A is
included in Item 7 on page 19 of this
Form 10-K.







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

Beginning on page 22 and continuing through
page 43 are the consolidated financial statements with
applicable notes and the related Report of Independent Auditors,
and the supplementary financial information specified by
Item 302 of Regulation S-K.


Responsibility for Financial Reporting

Financial Statements

The management of Milacron Inc. has prepared the
accompanying financial statements and is responsible for their
integrity and objectivity. The statements, which include amounts
that are based on managements best estimates and
judgments, have been prepared in conformity with generally
accepted accounting principles and are free of material
misstatement. Management also prepared the other information in
this Form 10-K and is responsible for its accuracy and
consistency with the financial statements.


Internal Control System

Milacron Inc. maintains a system of internal
control over financial reporting and over safeguarding of assets
against unauthorized acquisition, use or disposition that is
designed to provide reasonable assurance to the companys
management and Board of Directors regarding the preparation of
reliable published annual and quarterly financial statements and
such asset safeguarding. The system contains self-monitoring
mechanisms, and actions are taken to correct deficiencies as
they are identified. Even an effective internal control system,
no matter how well designed, has inherent
limitations  including the possibility of the
circumvention or overriding of controls  and
therefore can provide only reasonable assurance with respect to
financial statement preparation and such asset safeguarding.
Further, because of changes in conditions, internal control
system effectiveness may vary over time.


The company assessed its internal control system
as of December 31, 2000 in relation to criteria for
effective internal control over the preparation of its published
annual and quarterly financial statements described in
Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this assessment, the company
believes that, as of December 31, 2000, its system of
internal control over the preparation of its published annual
and quarterly financial statements and over the safeguarding of
assets against unauthorized acquisition, use or disposition met
those criteria.

|                        |  |  |                             | 
|----------------------- |  |  | --------------------------- | 
|Daniel J. Meyer         |  |  | Robert P. Lienesch          | 
|Chairman and            |  |  | Vice President - Finance    | 
|Chief Executive Officer |  |  | and Chief Financial Officer | 

February 8, 2001

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Consolidated Statements of Earnings





|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |       |       |  
|--------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------------ | ------- | ----- | ----- | ---- | ------- | ----- | ----- | - | ------- | ----- | ----- | -
|                                                                                             
|                                                                                             
|(In millions, except per-share amounts)                                                       |                                     | 2000                           |         | 1999  |       | 1998
|                                                                                             
|                                                                                             
|Sales                                                                                         |                                     | $                              | 1,584.2 |       |       | $    | 1,624.7 |       |       | $ | 1,514.7 |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Cost of products sold                                                                         |                                     |                                | 1,174.1 |       |       |      | 1,201.6 |       |       |   | 1,092.3 |      
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              | Manufacturing margins               |                                |         | 410.1 |       |      |         | 423.1 |       |   |         | 422.4 |      
|Other costs and expenses                                                                      |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Selling and administrative          |                                |         | 262.9 |       |      |         | 272.9 |       |   |         | 271.6 |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Restructuring costs                 |                                |         | 2.7   |       |      |         | 16.2  |       |   |         |      |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Gains on divestitures of businesses |                                |         | (1.5  | )     |      |         | (13.1 | )     |   |         |      |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Other-net                           |                                |         | 5.8   |       |      |         | 10.0  |       |   |         | 12.9  |      
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                     | Total other costs and expenses |         |       | 269.9 |      |         |       | 286.0 |   |         |       | 284.5 |  
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Operating earnings                                                                            |                                     |                                | 140.2   |       |       |      | 137.1   |       |       |   | 137.9   |      
|Interest                                                                                      |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Income                              |                                |         | 1.8   |       |      |         | 1.6   |       |   |         | 2.5   |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Expense                             |                                |         | (41.3 | )     |      |         | (39.8 | )     |   |         | (33.2 | )    
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                     | Interest-net                   |         |       | (39.5 | )    |         |       | (38.2 | ) |         |       | (30.7 | )
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations before income taxes and
	minority shareholders interests |                                     |                                | 100.7   |       |       |      | 98.9    |       |       |   | 107.2   |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Provision for income taxes                                                                    |                                     |                                | 25.4    |       |       |      | 26.4    |       |       |   | 28.1    |      
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations before minority
	shareholders interests                  |                                     |                                | 75.3    |       |       |      | 72.5    |       |       |   | 79.1    |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Minority shareholders interests in earnings of subsidiaries                                  |                                     |                                | 3.0     |       |       |      | 2.4     |       |       |   | 3.7     |      
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations                                                           |                                     |                                | 72.3    |       |       |      | 70.1    |       |       |   | 75.4    |      
|Discontinued operations net of income taxes                                                   |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Earnings from operations            |                                |         |      |       |      |         |      |       |   |         | 1.3   |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Loss on sale                        |                                |         |      |       |      |         |      |       |   |         | (35.2 | )    
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                     | Total discontinued operations  |         |       |      |      |         |       |      |   |         |       | (33.9 | )
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Net earnings                                                                                  |                                     | $                              | 72.3    |       |       | $    | 70.1    |       |       | $ | 41.5    |      
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Earnings per common share                                                                     |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Basic                                                                                         |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Continuing operations               |                                | $       | 2.06  |       |      | $       | 1.90  |       |   | $       | 1.93  |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued operations             |                                |         |      |       |      |         |      |       |   |         | (.87  | )    
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                     | Net earnings                   |         | $     | 2.06  |      |         | $     | 1.90  |   |         | $     | 1.06  |  
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|Diluted                                                                                       |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Continuing operations               |                                | $       | 2.06  |       |      | $       | 1.89  |       |   | $       | 1.91  |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued operations             |                                |         |      |       |      |         |      |       |   |         | (.86  | )    
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                     | Net earnings                   |         | $     | 2.06  |      |         | $     | 1.89  |   |         | $     | 1.05  |  
|                                                                                              |                                     |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             

See notes to consolidated financial
statements.


22



---



##### Table of Contents



Consolidated Balance Sheets





|                                           |                                                                                     |                                    |                   |       |       |       |         |         |       |       | 
|------------------------------------------ | ----------------------------------------------------------------------------------- | ---------------------------------- | ----------------- | ----- | ----- | ----- | ------- | ------- | ----- | ----- | 
|                                          
|                                          
|(In millions, except par value)            |                                                                                     | 2000                               |                   | 1999 
|                                          
|                                          
|Assets                                     |                                                                                     |                                    |                   |       |       |       |         |        
|Current assets                             |                                                                                     |                                    |                   |       |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                           |                                    | $                 | 41.2  |       |       | $       | 81.3    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Notes and accounts receivable (less allowances of $12.9 in 2000
	and $12.1 in 1999) |                                    |                   | 199.5 |       |       |         | 217.3   |      
|                                           | Inventories                                                                         |                                    |                   |       |       |       |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                     | Raw materials                      |                   |       | 42.9  |       |         |         | 44.4  |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                     | Work-in-process and finished parts |                   |       | 192.0 |       |         |         | 176.2 |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                                     | Finished products                  |                   |       | 132.2 |       |         |         | 152.8 |      
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                           |                                                                                     |                                    | Total inventories |       |       | 367.1 |         |         |       | 373.4 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Other current assets                                                                |                                    |                   | 48.2  |       |       |         | 45.6    |      
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                           |                                                                                     | Total current assets               |                   |       | 656.0 |       |         |         | 717.6 |      
|                                          
|                                          
|                                          
|                                          
|Property, plant and equipment-net          |                                                                                     |                                    | 305.5             |       |       |       | 323.2   |        
|                                          
|                                          
|                                          
|                                          
|Goodwill                                   |                                                                                     |                                    | 413.7             |       |       |       | 419.6   |        
|                                          
|                                          
|                                          
|                                          
|Other noncurrent assets                    |                                                                                     |                                    | 89.7              |       |       |       | 76.3    |        
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|Total assets                               |                                                                                     | $                                  | 1,464.9           |       |       | $     | 1,536.7 |        
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|Liabilities and Shareholders Equity       |                                                                                     |                                    |                   |       |       |       |         |        
|Current liabilities                        |                                                                                     |                                    |                   |       |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Borrowings under lines of credit                                                    |                                    | $                 | 85.6  |       |       | $       | 117.7   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Long-term debt due within one year                                                  |                                    |                   | 8.4   |       |       |         | 107.0   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Trade accounts payable                                                              |                                    |                   | 127.3 |       |       |         | 130.7   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Advance billings and deposits                                                       |                                    |                   | 25.9  |       |       |         | 28.8    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Accrued and other current liabilities                                               |                                    |                   | 158.9 |       |       |         | 172.7   |      
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                           |                                                                                     | Total current liabilities          |                   |       | 406.1 |       |         |         | 556.9 |      
|                                          
|                                          
|                                          
|                                          
|Long-term accrued liabilities              |                                                                                     |                                    | 191.8             |       |       |       | 190.8   |        
|                                          
|                                          
|                                          
|                                          
|Long-term debt                             |                                                                                     |                                    | 382.6             |       |       |       | 298.1   |        
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                           | Total liabilities                                                                   |                                    |                   | 980.5 |       |       |         | 1,045.8 |      
|                                          
|                                          
|                                          
|                                          
|Commitments and contingencies              |                                                                                     |                                    |                  |       |       |       |        |        
|Shareholders equity                       |                                                                                     |                                    |                   |       |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | 4% Cumulative Preferred shares                                                      |                                    |                   | 6.0   |       |       |         | 6.0     |      
|                                          
|                                          
|                                          
|                                          
|                                           | Common shares, $1 par value (outstanding: 33.3 in 2000 and 36.8
	in 1999)           |                                    |                   | 33.3  |       |       |         | 36.8    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Capital in excess of par value                                                      |                                    |                   | 281.5 |       |       |         | 325.5   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Reinvested earnings                                                                 |                                    |                   | 213.3 |       |       |         | 158.0   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive income (loss)                                       |                                    |                   | (49.7 | )     |       |         | (35.4   | )    
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                           |                                                                                     | Total shareholders equity         |                   |       | 484.4 |       |         |         | 490.9 |      
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|Total liabilities and shareholders equity |                                                                                     | $                                  | 1,464.9           |       |       | $     | 1,536.7 |        
|                                           |                                                                                     |                                    |                   |       |       |       |         |        
|                                          

See notes to consolidated financial
statements.


23



---



##### Table of Contents



Consolidated Statements of Comprehensive Income and
Shareholders Equity





|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |       |  
|--------------------------------------------------------- | ---------------------------------- | ------- | ----- | ------- |  | --------- | ----- | ------ |  | ---------- | --- | -------- |  | -------- | ---- | - |  | - | ----- | - |  | - | ----- | ----- | - | - | ----- | ----- | -
|                                                         
|                                                         
|                                                          |                                    | Other   |       | 4%      |  |          
|                                                          |                                    | Compre- |       | Compre- |  | Cumu-     |       | Common |  |            |     | Total   
|                                                          |                                    | hensive |       | hensive |  | lative    |       | Shares |  | Capital in |     | Rein-    |  | Share-  
|(In millions, except                                      |                                    | Income  |       | Income  |  | Preferred |       | $1 Par |  | Excess of  |     | vested   |  | holders
|per-share amounts)                                        |                                    | (Loss)  |       | (Loss)  |  | Shares    |       | Value  |  | Par Value  |     | Earnings |  | Equity  
|                                                         
|                                                         
|Balance at year-end 1997                                  |                                    |         |       |         |  | $         | (35.0 | )      |  | $          | 6.0 |          |  | $        | 39.6 |   |  | $ | 377.8 |   |  | $ | 83.5  |       |   | $ | 471.9 |      
|                                                         
|                                                         
|                                                         
|                                                         
|Stock options exercised and net restricted stock activity |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | .3   |   |  |   | 5.7   |   |  |   |       |       |   |   | 6.0   |      
|                                                         
|                                                         
|                                                         
|                                                         
|Purchases of treasury and other common shares             |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | (2.1 | ) |  |   | (42.3 | ) |  |   |       |       |   |   | (44.4 | )    
|                                                         
|                                                         
|                                                         
|                                                         
|Net earnings for the year                                 |                                    | $       | 41.5  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   | 41.5  |       |   |   | 41.5  |      
|                                                         
|                                                         
|                                                         
|                                                         
|Foreign currency translation adjustments                  |                                    |         | 20.6  |         |  |           | 20.6  |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   | 20.6  |      
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Total comprehensive income                                |                                    | $       | 62.1  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Cash dividends                                            |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Preferred shares ($4.00 per share) |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (.2   | ) |   |       | (.2   | )
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Common shares ($.48 per share)     |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (18.8 | ) |   |       | (18.8 | )
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Balance at year-end 1998                                  |                                    |         |       |         |  |           | (14.4 | )      |  |            | 6.0 |          |  |          | 37.8 |   |  |   | 341.2 |   |  |   | 106.0 |       |   |   | 476.6 |      
|                                                         
|                                                         
|                                                         
|                                                         
|Stock options exercised and net restricted stock activity |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | .1   |   |  |   | 1.5   |   |  |   |       |       |   |   | 1.6   |      
|                                                         
|                                                         
|                                                         
|                                                         
|Purchases of treasury and other common shares             |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | (1.1 | ) |  |   | (17.2 | ) |  |   |       |       |   |   | (18.3 | )    
|                                                         
|                                                         
|                                                         
|                                                         
|Net earnings for the year                                 |                                    | $       | 70.1  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   | 70.1  |       |   |   | 70.1  |      
|                                                         
|                                                         
|                                                         
|                                                         
|Foreign currency translation adjustments                  |                                    |         | (21.0 | )       |  |           | (21.0 | )      |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   | (21.0 | )    
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Total comprehensive income                                |                                    | $       | 49.1  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Cash dividends                                            |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Preferred shares ($4.00 per share) |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (.2   | ) |   |       | (.2   | )
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Common shares ($.48 per share)     |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (17.9 | ) |   |       | (17.9 | )
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Balance at year-end 1999                                  |                                    |         |       |         |  |           | (35.4 | )      |  |            | 6.0 |          |  |          | 36.8 |   |  |   | 325.5 |   |  |   | 158.0 |       |   |   | 490.9 |      
|                                                         
|                                                         
|                                                         
|                                                         
|Stock options exercised and net restricted stock activity |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | (.1  | ) |  |   | 2.0   |   |  |   |       |       |   |   | 1.9   |      
|                                                         
|                                                         
|                                                         
|                                                         
|Purchases of treasury and other common shares             |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          | (3.4 | ) |  |   | (46.0 | ) |  |   |       |       |   |   | (49.4 | )    
|                                                         
|                                                         
|                                                         
|                                                         
|Net earnings for the year                                 |                                    | $       | 72.3  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   | 72.3  |       |   |   | 72.3  |      
|                                                         
|                                                         
|                                                         
|                                                         
|Foreign currency translation adjustments                  |                                    |         | (14.3 | )       |  |           | (14.3 | )      |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   | (14.3 | )    
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Total comprehensive income                                |                                    | $       | 58.0  |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Cash dividends                                            |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Preferred shares ($4.00 per share) |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (.2   | ) |   |       | (.2   | )
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Common shares ($.48 per share)     |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       | (16.8 | ) |   |       | (16.8 | )
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|Balance at year-end 2000                                  |                                    |         |       |         |  | $         | (49.7 | )      |  | $          | 6.0 |          |  | $        | 33.3 |   |  | $ | 281.5 |   |  | $ | 213.3 |       |   | $ | 484.4 |      
|                                                          |                                    |         |       |         |  |           |       |        |  |            |     |          |  |          |      |   |  |   |       |   |  |   |       |       |   |   |       |      
|                                                         

See notes to consolidated financial
statements.


24



---



##### Table of Contents



Consolidated Statements of Cash Flows





|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |   |        |        |       |  
|------------------------------------------------------------------ | ------------------------------- | ------------------------------------------------------- | -------------------------------------------------- | ----------------------------------------- | ------ | ------ | ----- | - | ----- | ----- | ----- | - | ------ | ------ | ----- | -
|                                                                  
|                                                                  
|(In millions)                                                      |                                 | 2000                                                    |                                                    | 1999                                      |        | 1998  
|                                                                  
|                                                                  
|Increase (decrease) in cash and cash equivalents                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Operating activities cash flows |                                                         |                                                    |                                           |        |        |       |   |       |       |       |   |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Net earnings                                            |                                                    | $                                         | 72.3   |        |       | $ | 70.1  |       |       | $ | 41.5   |       
|                                                                   |                                 | Operating activities providing (using) cash             |                                                    |                                           |        |        |       |   |       |       |       |   |        |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Depreciation and amortization                      |                                           |        | 58.4   |       |   |       | 58.3  |       |   |        | 57.4   |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Restructuring costs                                |                                           |        |       |       |   |       | 16.2  |       |   |        |       |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Gains on divestitures of businesses                |                                           |        | (1.5   | )     |   |       | (13.1 | )     |   |        |       |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Loss on sale of discontinued machine tools segment |                                           |        |       |       |   |       |      |       |   |        | 35.2   |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Deferred income taxes                              |                                           |        | 9.1    |       |   |       | 10.1  |       |   |        | (6.3   | )    
|                                                                   |                                 |                                                         | Working capital changes                            |                                           |        |        |       |   |       |       |       |   |        |        |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         |                                                    | Notes and accounts receivable             |        |        | 6.3   |   |       |       | (19.0 | ) |        |        | 10.4  |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         |                                                    | Inventories                               |        |        | (14.5 | ) |       |       | (9.9  | ) |        |        | (45.5 | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         |                                                    | Other current assets                      |        |        | (7.9  | ) |       |       | (2.6  | ) |        |        | .8    |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         |                                                    | Trade accounts payable                    |        |        | 1.6   |   |       |       | (9.2  | ) |        |        | (.4   | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         |                                                    | Other current liabilities                 |        |        | (11.2 | ) |       |       | (4.7  | ) |        |        | 1.0   |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Decrease (increase) in other noncurrent assets     |                                           |        | (13.1  | )     |   |       | 1.7   |       |   |        | (6.0   | )    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Decrease in long-term accrued liabilities          |                                           |        | (.1    | )     |   |       | (6.0  | )     |   |        | (1.9   | )    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 |                                                         | Other-net                                          |                                           |        | (3.6   | )     |   |       | (2.5  | )     |   |        | (2.7   | )    
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|                                                                   |                                 |                                                         |                                                    | Net cash provided by operating activities |        |        | 95.8  |   |       |       | 89.4  |   |        |        | 83.5  |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Investing activities cash flows |                                                         |                                                    |                                           |        |        |       |   |       |       |       |   |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Capital expenditures                                    |                                                    |                                           | (47.0  | )      |       |   | (47.3 | )     |       |   | (81.4  | )     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Net disposals of property, plant and equipment          |                                                    |                                           | 10.0   |        |       |   | 5.9   |       |       |   | 2.4    |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Acquisitions                                            |                                                    |                                           | (7.0   | )      |       |   | (47.0 | )     |       |   | (228.0 | )     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Divestitures                                            |                                                    |                                           | 11.2   |        |       |   | 49.2  |       |       |   | 173.7  |       
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|                                                                   |                                 |                                                         | Net cash used by investing activities              |                                           |        | (32.8  | )     |   |       | (39.2 | )     |   |        | (133.3 | )    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Financing activities cash flows |                                                         |                                                    |                                           |        |        |       |   |       |       |       |   |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Dividends paid                                          |                                                    |                                           | (17.0  | )      |       |   | (18.1 | )     |       |   | (19.0  | )     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Issuance in long-term debt                              |                                                    |                                           | 115.4  |        |       |   | 2.0   |       |       |   | 25.7   |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Repayments of long-term debt                            |                                                    |                                           | (146.1 | )      |       |   | (6.3  | )     |       |   | (6.0   | )     
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Increase (decrease) in borrowings under lines of credit |                                                    |                                           | (5.2   | )      |       |   | 28.3  |       |       |   | 105.5  |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Issuance of common shares                               |                                                    |                                           |       |        |       |   | .1    |       |       |   | 6.0    |       
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   |                                 | Purchase of treasury and other common shares            |                                                    |                                           | (48.4  | )      |       |   | (22.0 | )     |       |   | (40.6  | )     
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|                                                                   |                                 |                                                         | Net cash provided (used) by financing activities   |                                           |        | (101.3 | )     |   |       | (16.0 | )     |   |        | 71.6   |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Effect of exchange rate fluctuations on cash and cash
	equivalents |                                 |                                                         | (1.8                                               | )                                         |        |        | (1.8  | ) |       |       | 1.4   |  
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|Increase (decrease) in cash and cash equivalents                   |                                 |                                                         | (40.1                                              | )                                         |        |        | 32.4  |   |       |       | 23.2  |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Cash and cash equivalents at beginning of year                     |                                 |                                                         | 81.3                                               |                                           |        |        | 48.9  |   |       |       | 25.7  |  
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|Cash and cash equivalents at end of year                           |                                 | $                                                       | 41.2                                               |                                           |        | $      | 81.3  |   |       | $     | 48.9  |  
|                                                                   |                                 |                                                         |                                                    |                                           |        |        |       |   |       |       |       |  
|                                                                  

See notes to consolidated financial
statements.


25



---



##### Table of Contents



Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.


Consolidation

The consolidated financial statements include the
accounts of the company and its subsidiaries. All significant
intercompany transactions are eliminated.


Foreign Currency Translation

Assets and liabilities of the companys
non-U.S. operations are translated into U.S. dollars at
period-end exchange rates. Net exchange gains or losses
resulting from such translation are excluded from net earnings
and accumulated in a separate component of shareholders
equity. Income and expense accounts are translated at
weighted-average exchange rates for the period. Gains and losses
from foreign currency transactions are included in other costs
and expenses-net in the Consolidated Statements of Earnings.
Such amounts were as follows: 2000  $.3 million
gain; 1999  $1.0 million gain; 1998 
$1.4 million gain. Gains and losses on foreign exchange
contracts that are designated as hedges of foreign currency
commitments are recognized as part of the specific transactions
hedged under the deferral method of accounting consistent with
the requirement for a firm commitment.


Revenue Recognition

The company generally recognizes sales revenue
when products are shipped to unaffiliated customers, legal title
has passed and all significant contractual obligations of the
company have been satisfied. The company provides for estimated
post-sale warranty costs as revenue is recognized. Appropriate
provisions are also made for returns for credit and
uncollectible accounts.


Cash and Cash Equivalents

The company considers all highly liquid
investments with a maturity of three months or less to be cash
equivalents.


Inventory Valuation

Inventories are stated at the lower of cost or
market, including provisions for obsolescence commensurate with
known or estimated exposures. The principal methods of
determining costs are last-in, first-out (LIFO) for certain
U.S. inventories and average or standard cost, which
approximates first-in, first-out (FIFO), for other
inventories.


Property, Plant and Equipment

Property, plant and equipment are stated at cost
or, for assets acquired through business combinations, at fair
value at the dates of the respective acquisitions. For financial
reporting purposes, depreciation is generally determined on the
straight-line method using estimated useful lives of the assets.
Depreciation expense was $45.6 million, $47.0 million
and $49.4 million for 2000, 1999 and 1998, respectively. In
1998, $6.0 million relates to discontinued
operations.


Property, plant and equipment that are idle and
held for sale are valued at the lower of historical cost less
accumulated depreciation or fair value less cost to sell.
Carrying costs through the expected disposal dates of such
assets are accrued at the time expected losses are recognized
or, in the case of assets to be sold at a gain, charged to
expense as incurred.

Goodwill

Goodwill, which represents the excess of
acquisition cost over the net assets acquired in business
combinations, is amortized on the straight-line method over
periods ranging from 10 to 40 years. Amortization expense
charged to earnings, all of which relates to continuing
operations, amounted to $12.8 million, $11.3 million and
$8.0 million in 2000, 1999, and 1998, respectively.

The carrying amount of goodwill is reviewed
periodically using estimated undiscounted cash flows for the
businesses acquired over the remaining amortization periods. If,
based on this analysis, the goodwill arising from a particular
acquisition were found to be not recoverable, its carrying value
would be reduced by the amount of the discounted cash flow
deficit through a charge to earnings. The company also evaluates
long-lived assets for impairment when facts and circumstances
suggest that the carrying amounts of these assets may not be
recoverable. Goodwill associated with assets acquired in
business combinations is included in these impairment
evaluations when appropriate.

Retirement Benefit Plans

The company maintains various defined benefit and
defined contribution pension plans covering substantially all
U.S. employees and certain non-U.S. employees. For de-

26



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##### Table of Contents



Notes to Consolidated Financial Statements


fined benefit plans, pension benefits are based
primarily on length of service and compensation. The
companys policy is to fund the plans in accordance with
applicable laws and regulations.

Stock-Based Compensation

The company accounts for stock-based compensation
under the provisions of Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to
Employees, and the related interpretations as permitted by
Statement of Financial Accounting Standards No. 123
Accounting for Stock-Based Compensation.


Income Taxes

The company provides deferred income taxes for
cumulative temporary differences between the financial reporting
basis and income tax basis of its assets and liabilities.
Provisions are made for all currently payable federal and state
and local income taxes at applicable tax rates. Provisions are
also made for any additional taxes on anticipated distributions
from subsidiaries.


Earnings Per Common Share

Basic earnings per common share data are based on
the weighted-average number of common shares outstanding during
the respective periods. Diluted earnings per common share data
are based on the weighted-average number of common shares
outstanding adjusted to include the effects of potentially
dilutive stock options and certain restricted shares.


Recently Issued Pronouncements

In 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and
Hedging Activities, which was adopted by the company
effective January 1, 2001. Because of the companys
limited use of derivatives, the adoption of this standard did
not have a significant effect on its financial condition and
will not materially affect its results of operations in
2001.


In September, 2000, the FASB issued Statement of
Financial Accounting Standards No. 140, Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities (SFAS No. 140), which
is effective for transfers of financial assets occurring after
March 31, 2001. The company is evaluating the possible
effects of SFAS No. 140 on the accounting for its sales of
accounts receivable under its receivables purchase agreement
(see Receivables) but does not expect them to be
significant.

Restructuring Costs

In 1999, the company initiated two separate
programs to improve operating efficiency and strengthen
synergies between certain recently acquired businesses and its
previously existing operations.


In September, 1999, the company announced a
formal plan to consolidate Uniloys European blow molding
operations in a new manufacturing facility located near Milan,
Italy. At the time Uniloy was acquired in September, 1998, the
company recognized the need for improved efficiency within
Uniloys European operations and immediately thereafter
began to evaluate various options for the purpose of identifying
the optimal long-term solution. Through that process, it was
determined that certain of the manufacturing and assembly
operations at the plants located in Florence and Milan, Italy
and Berlin, Germany would be consolidated into a more modern
plant near Milan and that other operations would be transferred
to another plant located in the Czech Republic. In the second
quarter of 1999, the company began to develop a detailed plan
for the consolidation, which was formally approved by management
in August, 1999.

The total cost of the plan, which was initiated
in the fourth quarter of 1999 and which will be completed in the
first half of 2001, was originally expected to be approximately
$6.7 million. However, foreign currency exchange rate
fluctuations since the acquisition date and lower than expected
costs to relocate inventory and equipment have had the effect of
reducing the total cost as measured in U.S. dollars to
approximately $5.5 million, including $.7 million that is
being charged to expense as incurred. Of the latter amount, $.5
million was expensed in 2000. The remainder of the total cost of
the consolidation is included in a reserve for employee
termination benefits and facility exit costs that was
established in the allocation of the Uniloy acquisition cost.
The original amount of the reserve was $5.7 million but
foreign currency exchange rate fluctuations have had the effect
of reducing it by $.9 million, including $.2 million
in 2000. Charges against the reserve in 2000 were
$2.5 million. To the extent that any used reserve remains
after the completion of the consolidation, that amount will be
applied as a reduction of the goodwill related to the Uniloy
acquisition.

The total cash cost of the consolidation is
currently expected to be approximately $3 million, which is
net of the expected proceeds from the sale of two facilities in
Italy, one of which was sold in the fourth quarter of 2000. The
consolidation has reduced revenues in 2000 but is not

27



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##### Table of Contents



Notes to Consolidated Financial Statements


expected to adversely affect revenues by the
second half of 2001.

In December, 1999, the company initiated a second
plan to improve operating efficiency and reduce costs at
additional businesses. The actions contemplated by the plan
involve both segments operations in North America and
Europe. The plan involves the closure of four smaller
manufacturing facilities, the operations of which have been
transferred to other locations, and the elimination of
approximately 310 manufacturing and administrative positions
worldwide, substantially all of which have been eliminated as of
December 31, 2000. The cost of implementing the plan was
originally expected to be $20.8 million. However, as a
result of lower than expected costs for employee, inventory and
equipment relocation and  to a significantly lesser degree
 lower severance and other termination benefits, the total
cost is now expected to be $18.2 million, including
$16.0 million in 1999 and $2.2 million in 2000. Of the
1999 amount, $14.1 million was included in a reserve for
employee termination benefits and facility exit costs that was
recorded in the fourth quarter. Charges against this reserve in
2000 totaled $11.4 million. Foreign currency exchange rate
fluctuations had the effect of reducing the reserve by an
additional $.8 million. In addition, excess reserves for
employee termination benefits and facility exit costs totaling
$.3 million were reversed in the third and fourth quarters
of 2000. The total cost of the plan also includes 1999 charges
of $1.7 million for supplemental early retirement benefits
for certain employees that are being funded through pension
plans and $2.7 million for additional costs that are being
charged to expense as incurred. Of the latter amount,
$2.5 million was expensed in 2000.

The total cash cost of the plan, including
capital expenditures of $3.6 million, is expected to be
approximately $15.3 million, most of which was expended in
2000.

As presented in the Consolidated Statements of
Earnings for 2000 and 1999, the line captioned
Restructuring costs includes the following
components:



---

Restructuring Costs


|                                                         |                     |      |     |      |   |   |      |    | 
|-------------------------------------------------------- | ------------------- | ---- | --- | ---- | - | - | ---- | -- | 
|(In millions)                                            |                     | 2000 |     | 1999
|                                                        
|                                                        
|Accrual for termination benefits and facility exit costs |                     | $    |    |      |   | $ | 14.1 |   
|                                                        
|                                                        
|                                                        
|                                                        
|Supplemental retirement benefits                         |                     |      |    |      |   |   | 1.7  |   
|Other restructuring costs                                |                     |      |     |      |   |   |      |   
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Charges to expense  |      |     | 2.5  |   |   |      | .2 | 
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Reserve adjustments |      |     | (.3  | ) |   |      |   | 
|                                                         |                     |      |     |      |   |   |      |   
|                                                         |                     |      | 2.2 |      |   |   | 16.0 |   
|                                                        
|                                                        
|                                                        
|                                                        
|Costs related to the Uniloy consolidation                |                     |      | .5  |      |   |   | .2   |   
|                                                         |                     |      |     |      |   |   |      |   
|                                                         |                     | $    | 2.7 |      |   | $ | 16.2 |   
|                                                         |                     |      |     |      |   |   |      |   
|                                                        

The status of the reserves for the two
initiatives discussed above is summarized in the following
table.



---

Restructuring Reserves





|                     |                      |           |      |        |  |         |       |      |   |   |      |     | 
|-------------------- | -------------------- | --------- | ---- | ------ |  | ------- | ----- | ---- | - | - | ---- | --- | 
|                     |                      |          
|                     |                      | 2000     
|                    
|                    
|                     |                      | Beginning |      |        |  | Ending 
|(In millions)        |                      | Balance   |      | Change |  | Balance
|                    
|                    
|Uniloy consolidation |                      |           |      |        |  |         |       |      |   |   |      |    
|                    
|                    
|                    
|                    
|                     | Termination costs    |           | $    | 3.6    |  |         | $     | (2.2 | ) |   | $    | 1.4 | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |      | .7     |  |         |       | (.5  | ) |   |      | .2  | 
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                     |                      |           | 4.3  |        |  |         | (2.7  | )    |   |   | 1.6  |    
|Restructuring costs  |                      |           |      |        |  |         |       |      |   |   |      |    
|                    
|                    
|                    
|                    
|                     | Termination benefits |           |      | 9.4    |  |         |       | (9.1 | ) |   |      | .3  | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |      | 3.8    |  |         |       | (3.4 | ) |   |      | .4  | 
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                     |                      |           | 13.2 |        |  |         | (12.5 | )    |   |   | .7   |    
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|Total reserves       |                      | $         | 17.5 |        |  | $       | (15.2 | )    |   | $ | 2.3  |    
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                    
|                     |                      | 1999     
|                    
|Uniloy consolidation |                      |           |      |        |  |         |       |      |   |   |      |    
|                    
|                    
|                    
|                    
|                     | Termination costs    |           | $    | 4.6    |  |         | $     | (1.0 | ) |   | $    | 3.6 | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |      | 1.1    |  |         |       | (.4  | ) |   |      | .7  | 
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                     |                      |           | 5.7  |        |  |         | (1.4  | )    |   |   | 4.3  |    
|Restructuring costs  |                      |           |      |        |  |         |       |      |   |   |      |    
|                    
|                    
|                    
|                    
|                     | Termination benefits |           |      | 10.0   |  |         |       | (.6  | ) |   |      | 9.4 | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |      | 4.1    |  |         |       | (.3  | ) |   |      | 3.8 | 
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                     |                      |           | 14.1 |        |  |         | (.9   | )    |   |   | 13.2 |    
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|Total reserves       |                      | $         | 19.8 |        |  | $       | (2.3  | )    |   | $ | 17.5 |    
|                     |                      |           |      |        |  |         |       |      |   |   |      |    
|                    

28



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##### Table of Contents



Notes to Consolidated Financial Statements


Divestitures of Businesses

In September, 2000, the company completed the
sale of its German-based industrial magnets business, Widia
Magnet Engineering, for approximately $14 million and recorded a
pretax gain of $1.5 million ($.8 million after tax).
With 1999 annual sales of approximately $30 million, Widia
Magnet Engineering has approximately 280 employees and
manufactures and sells both soft and permanent magnets used in
automotive and other applications. The business was included in
the acquisition of Widia GmbH in 1995 and was sold to redeploy
assets to other businesses.


In December, 1999, the company sold its European
plastics extrusion systems business for approximately
$44 million including post-closing adjustments and recorded
a pretax gain of $13.1 million ($10.1 million after
tax). Headquartered in Vienna, Austria, the business had 1999
sales to unaffiliated customers of $62 million, principally
to markets in Europe, Asia and South America, and employs
approximately 325 people. The business was sold to redeploy
assets to other businesses.

Discontinued Operations

On October 2, 1998, the company completed
the sale of its machine tools group (MTG). The proceeds from the
sale, including post-closing adjustments, were approximately
$187 million, of which $180 million was received on
the closing date and used to repay bank borrowings incurred for
the acquisition of Uniloy (see Acquisitions). The after-tax loss
on the sale of $35.2 million ($45.9 million before
income taxes), or $.90 per share, was recorded in the third
quarter of 1998. Operating results from discontinued operations
are as follows:


|                             |  |      |       |  
|---------------------------- |  | ---- | ----- | -
|                            
|                            
|(In millions)                |  | 1998
|                            
|                            
|Net sales                    |  | $    | 346.4 |  
|                             |  |      |       |  
|Earnings before income taxes |  | $    | 1.7   |  
|                            
|                            
|                            
|                            
|Provision for income taxes   |  |      | (.4   | )
|                             |  |      |       |  
|Earnings from operations     |  | $    | 1.3   |  
|                             |  |      |       |  
|                            

Acquisitions

In February, 1998, the company acquired Wear
Technology, which had annual sales of approximately
$10 million as of the acquisition date and serves the
aftermarket for new and rebuilt twin screws for extrusion
systems, and Northern Supply, a regional catalog distribution
company offering supplies to plastics processors for injection
molding, blow molding and extrusion with annual sales of
approximately $5 million.


In May, 1998, the company acquired Autojectors,
Inc., a leading U.S. producer of vertical insert injection
molding machinery widely used to make medical, electrical and
automotive components. Autojectors had annual sales of
approximately $20 million as of the acquisition date.

In September, 1998, the company acquired Master
Unit Die Products, Inc., a leading North American manufacturer
of quick-change mold bases for the plastics industry. Master
Unit Die Products has annual sales in excess of
$10 million.

Also, in September, 1998, the company acquired
the assets of the plastics machinery division of Johnson
Controls, Inc. (Uniloy) for approximately $204 million. Uniloy,
which is known for its Uniloy brand of equipment, as well as
various other brands, had annual sales of more than
$190 million for its fiscal year ended September 30,
1998, and is one of the worlds leading providers of blow
molding machines, as well as structural foam systems,
aftermarket parts, services and molds for blow molding.

On December 30, 1998, the company acquired
Werkzeugfabrik GmbH Königsee (Werkö), a manufacturer
of high-speed steel drills. Located in eastern Germany,
Werkö had annual sales of approximately $25 million as
of the acquisition date.

In July, 1999, the company acquired Nickerson
Machinery Inc., Pliers International Inc., and Plastic Moulding
Supply Ltd. (collectively, Nickerson). With annual sales of
$7 million as of the acquisition date, Nickerson sells
supplies and equipment for plastic processing through two
catalog distribution centers in the U.S. and one in the U.K. The
operation in the U.K. also manufactures and refurbishes screws
and barrels for small injection molding machines.

In the third quarter of 1999, the company made
three acquisitions in the metalworking technologies segment. In
August, the company acquired Producto Chemical, Inc. (Producto),
a U.S. manufacturer of process cleaners, washers, corrosion
inhibitors and specialty products for metalworking with annual
sales approaching $5 million as of the acquisition date.
Productos products are being marketed worldwide through
the companys sales and distribution channels. In
September, the company acquired Oak International, Inc. (Oak), a
supplier of metalforming lubricants and process cleaners and a
leading supplier of lubricants used in the manufacture of
industrial heat exchangers and air conditioners. Headquartered
in Michigan, Oak has

29



---



##### Table of Contents



Notes to Consolidated Financial Statements


two manufacturing plants in the U.S. and one in
the U.K. and had annual sales approaching $12 million as of
the acquisition date. Also in September, 1999, the company
acquired the Micro Carbide product line of round, solid-carbide
metalworking tools, which includes reamers, step drills and
miniature tools. These products are being produced at the
companys Data Flute facility.

In May, 2000, the company acquired Akron
Extruders, Inc., a single-screw plastics extrusion manufacturer
having annual sales of approximately $5 million. The
manufacture of Akron Extruders lines of single-screw
extruders and replacement barrels and screws has been moved to
the companys principal U.S. plastics machinery facility
near Cincinnati.

In October, 2000, the company acquired Ontario
Heater and Supply Company and Rite-Tek Canada (Rite-Tek), two
Canadian companies that specialize in the distribution of
maintenance, repair and operating supplies for the plastics
processing industry. Rite-Tek also manufactures heater bands
used in plastics processing. The combined sales of the two
companies are approximately $5 million per year.

All of the acquisitions were accounted for under
the purchase method and were financed through the use of
available cash and bank borrowings. The aggregate cost of the
acquisitions, including professional fees and other related
costs, totaled $4.7 million for 2000, $33.2 million
for 1999 and $246.2 million for 1998. The allocation of the
aggregate cost of the 1999 and 1998 acquisitions to the assets
acquired and liabilities assumed is presented in the table that
follows. Similar information for the 2000 acquisitions is not
presented because the amounts are not significant.



---

Allocation of Acquisition Cost





|                                                             |                   |      |      |      |  |   |       |       | 
|------------------------------------------------------------ | ----------------- | ---- | ---- | ---- |  | - | ----- | ----- | 
|(In millions)                                                |                   | 1999 |      | 1998
|                                                            
|                                                            
|Cash and cash equivalents                                    |                   | $    | .7   |      |  | $ | 2.2   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Accounts receivable                                          |                   |      | 4.0  |      |  |   | 33.9  |      
|                                                            
|                                                            
|                                                            
|                                                            
|Inventories                                                  |                   |      | 5.0  |      |  |   | 66.6  |      
|                                                            
|                                                            
|                                                            
|                                                            
|Other current assets                                         |                   |      | .3   |      |  |   | 2.7   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Property, plant and equipment                                |                   |      | 4.5  |      |  |   | 31.2  |      
|                                                            
|                                                            
|                                                            
|                                                            
|Goodwill                                                     |                   |      | 21.6 |      |  |   | 196.5 |      
|                                                            
|                                                            
|                                                            
|                                                            
|Other noncurrent assets                                      |                   |      | .5   |      |  |   | 8.5   |      
|                                                             |                   |      |      |      |  |   |       |      
|                                                             | Total assets      |      |      | 36.6 |  |   |       | 341.6 | 
|                                                            
|                                                            
|                                                            
|                                                            
|Short term borrowings and long-term debt due within one year |                   |      | 1.0  |      |  |   | 7.4   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Other current liabilities                                    |                   |      | 1.6  |      |  |   | 76.0  |      
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term accrued liabilities                                |                   |      |     |      |  |   | 1.0   |      
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term debt                                               |                   |      | .8   |      |  |   | 11.0  |      
|                                                             |                   |      |      |      |  |   |       |      
|                                                             | Total liabilities |      |      | 3.4  |  |   |       | 95.4  | 
|                                                             |                   |      |      |      |  |   |       |      
|Total acquisition cost                                       |                   | $    | 33.2 |      |  | $ | 246.2 |      
|                                                             |                   |      |      |      |  |   |       |      
|                                                            

In the 1998 allocation of acquisition cost, other
current liabilities includes a reserve of $5.7 million for
the consolidation of Uniloys European blow molding
operations (see Restructuring Costs).

Unaudited pro forma sales and earnings
information for 1998 reflecting the Uniloy acquisition is
presented in the following table. The amounts included therein
assume that the acquisition had taken place at the beginning of
the year. The inclusion of the other 1998 acquisitions would not
have a material effect in the amounts presented. Pro forma
information for 2000 and 1999 is not presented because the
amounts would not vary materially from the comparable amounts
reflected in the companys historical Consolidated
Statements of Earnings.

30



---



##### Table of Contents



Notes to Consolidated Financial Statements




---

Pro Forma Information





|                                        |         |      |         |      | 
|--------------------------------------- | ------- | ---- | ------- | ---- | 
|(In millions, except per-share amounts) |         | 1998
|                                       
|                                       
|Sales                                   |         | $    | 1,669.2 |     
|                                        |         |      |         |     
|Earnings from continuing operations     |         | $    | 74.7    |     
|                                        |         |      |         |     
|Per common share                        |         |      |         |     
|                                       
|                                       
|                                       
|                                       
|                                        | Basic   |      | $       | 1.91 | 
|                                        |         |      |         |     
|                                        | Diluted |      | $       | 1.90 | 
|                                        |         |      |         |     
|Net earnings                            |         | $    | 40.8    |     
|                                        |         |      |         |     
|Per common share                        |         |      |         |     
|                                       
|                                       
|                                       
|                                       
|                                        | Basic   |      | $       | 1.04 | 
|                                        |         |      |         |     
|                                        | Diluted |      | $       | 1.03 | 
|                                        |         |      |         |     
|                                       

Research and Development

Charges to continuing operations for research and
development activities are summarized below.



---

Research and Development





|                         |  |      |      |      |  |      |      |  |  |   |      | 
|------------------------ |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|(In millions)            |  | 2000 |      | 1999 |  | 1998
|                        
|                        
|Research and development |  | $    | 34.4 |      |  | $    | 34.5 |  |  | $ | 36.7 | 
|                         |  |      |      |      |  |      |      |  |  |   |      | 
|                        

Retirement Benefit Plans

Pension cost for all defined benefit plans is
summarized in the following table. For all years presented, the
table includes amounts for plans for certain employees in the
U.S. and Germany. The amounts for 1998 include the plan for
United Kingdom (U.K.) employees.




---

Pension Cost





|                                                          |  |      |       |      |  |      |       |   |  |   |       |  
|--------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(In millions)                                             |  | 2000 |       | 1999 |  | 1998
|                                                         
|                                                         
|Service cost (benefits earned during the period)          |  | $    | 5.3   |      |  | $    | 6.4   |   |  | $ | 10.0  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Interest cost on projected benefit obligation             |  |      | 35.1  |      |  |      | 33.5  |   |  |   | 38.8  |  
|                                                         
|                                                         
|                                                         
|                                                         
|Expected return on plan assets                            |  |      | (43.5 | )    |  |      | (40.1 | ) |  |   | (43.8 | )
|                                                         
|                                                         
|                                                         
|                                                         
|Supplemental retirement benefits                          |  |      |      |      |  |      | 1.5   |   |  |   |      |  
|                                                         
|                                                         
|                                                         
|                                                         
|Amortization of unrecognized transition (asset) liability |  |      | .1    |      |  |      | (1.5  | ) |  |   | (5.4  | )
|                                                         
|                                                         
|                                                         
|                                                         
|Amortization of unrecognized prior service cost           |  |      | .5    |      |  |      | .5    |   |  |   | 1.3   |  
|                                                         
|                                                         
|                                                         
|                                                         
|Amortization of unrecognized gains and losses             |  |      | .3    |      |  |      | 1.0   |   |  |   | .4    |  
|                                                          |  |      |       |      |  |      |       |   |  |   |       |  
|Pension (income) cost                                     |  | $    | (2.2  | )    |  | $    | 1.3   |   |  | $ | 1.3   |  
|                                                          |  |      |       |      |  |      |       |   |  |   |       |  
|                                                          |  |      |       |     

The amount for 1998 includes income of
$1.0 million related to the plan for U.K. employees. This
amount is included in the operating results of the discontinued
machine tools segment in the Consolidated Statement of Earnings
for that year. The amount related to the plans for U.S.
employees that is included in discontinued operations in 1998
cannot be precisely quantified.

The following table summarizes changes in the
projected benefit obligation for all defined benefit
plans.



---

Projected Benefit Obligation





|                                         |  |      |        |      |  |   |        |  
|---------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|(In millions)                            |  | 2000 |        | 1999
|                                        
|                                        
|Balance at beginning of year             |  | $    | (455.3 | )    |  | $ | (525.1 | )
|                                        
|                                        
|                                        
|                                        
|Service cost                             |  |      | (5.3   | )    |  |   | (6.4   | )
|                                        
|                                        
|                                        
|                                        
|Interest cost                            |  |      | (35.1  | )    |  |   | (33.5  | )
|                                        
|                                        
|                                        
|                                        
|Benefits paid                            |  |      | 37.4   |      |  |   | 36.0   |  
|                                        
|                                        
|                                        
|                                        
|Actuarial (loss) gain                    |  |      | (11.1  | )    |  |   | 22.9   |  
|                                        
|                                        
|                                        
|                                        
|Sale of industrial magnets business      |  |      | 1.5    |      |  |   |       |  
|                                        
|                                        
|                                        
|                                        
|Supplemental retirement benefits         |  |      |       |      |  |   | (1.5   | )
|                                        
|                                        
|                                        
|                                        
|Change in discount rate                  |  |      |       |      |  |   | 46.2   |  
|                                        
|                                        
|                                        
|                                        
|Foreign currency translation adjustments |  |      | 3.9    |      |  |   | 6.1    |  
|                                         |  |      |        |      |  |   |        |  
|Balance at end of year                   |  | $    | (464.0 | )    |  | $ | (455.3 | )
|                                         |  |      |        |      |  |   |        |  
|                                        

The following table summarizes the changes in
plan assets for the U.S. plans. Consistent with customary
prac-

31



---



##### Table of Contents



Notes to Consolidated Financial Statements


tice in Germany, the plans for employees in that
country have not been funded.



---

Plan Assets





|                             |  |      |       |      |  |   |       |  
|---------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|(In millions)                |  | 2000 |       | 1999
|                            
|                            
|Balance at beginning of year |  | $    | 501.5 |      |  | $ | 449.6 |  
|                            
|                            
|                            
|                            
|Actual investment return     |  |      | 15.0  |      |  |   | 84.8  |  
|                            
|                            
|                            
|                            
|Benefits paid                |  |      | (34.2 | )    |  |   | (32.9 | )
|                             |  |      |       |      |  |   |       |  
|Balance at end of year       |  | $    | 482.3 |      |  | $ | 501.5 |  
|                             |  |      |       |      |  |   |       |  
|                            

The following table sets forth the funded status
of the plans for U.S. employees at year-end 2000 and 1999.



---

Funded Status at Year-end





|                                                                  |  |      |        |      |  |   |        |  
|----------------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|(In millions)                                                     |  | 2000 |        | 1999
|                                                                 
|                                                                 
|Vested benefit obligation                                         |  | $    | (373.0 | )    |  | $ | (359.9 | )
|                                                                  |  |      |        |      |  |   |        |  
|Accumulated benefit obligation                                    |  | $    | (390.1 | )    |  | $ | (373.3 | )
|                                                                  |  |      |        |      |  |   |        |  
|Projected benefit obligation                                      |  | $    | (426.9 | )    |  | $ | (413.9 | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Plan assets at fair value                                         |  |      | 482.3  |      |  |   | 501.5  |  
|                                                                  |  |      |        |      |  |   |        |  
|Excess of plan assets in relation to projected benefit obligation |  |      | 55.4   |      |  |   | 87.6   |  
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrecognized net gain                                             |  |      | (51.5  | )    |  |   | (90.8  | )
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Unrecognized prior service cost                                   |  |      | 2.7    |      |  |   | 3.2    |  
|                                                                  |  |      |        |      |  |   |        |  
|Prepaid pension cost                                              |  | $    | 6.6    |      |  | $ |       |  
|                                                                  |  |      |        |      |  |   |        |  
|                                                                 

The assets of the principal U.S. plan consist
primarily of stocks, debt securities and mutual funds. The plan
also includes common shares of the company with a market value
of $37.2 million in 2000 and $31.7 million in
1999.

The following table sets forth the status of the
companys defined benefit pension plans for certain
employees in Germany.



---

Status at Year-end





|                               |  |      |       |      |  |   |       |  
|------------------------------ |  | ---- | ----- | ---- |  | - | ----- | -
|(In millions)                  |  | 2000 |       | 1999
|                              
|                              
|Vested benefit obligation      |  | $    | (32.3 | )    |  | $ | (36.3 | )
|                               |  |      |       |      |  |   |       |  
|Accumulated benefit obligation |  | $    | (34.5 | )    |  | $ | (38.5 | )
|                               |  |      |       |      |  |   |       |  
|Projected benefit obligation   |  | $    | (37.1 | )    |  | $ | (41.4 | )
|                              
|                              
|                              
|                              
|Unrecognized net loss          |  |      | 1.3   |      |  |   | 1.4   |  
|                               |  |      |       |      |  |   |       |  
|Accrued pension cost           |  | $    | (35.8 | )    |  | $ | (40.0 | )
|                               |  |      |       |      |  |   |       |  
|                              

The following table presents the weighted-average
actuarial assumptions used for all defined benefit plans in
2000, 1999 and 1998.



---

Actuarial Assumptions





|                                                 |  |      |     |      |  |      |     |   |  |  |     |  
|------------------------------------------------ |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                 |  | 2000 |     | 1999 |  | 1998
|                                                
|                                                
|Discount rate                                    |  |      | 7.6 | %    |  |      | 7.6 | % |  |  | 6.8 | %
|                                                
|                                                
|                                                
|                                                
|Expected long-term rate of return on plan assets |  |      | 9.5 | %    |  |      | 9.5 | % |  |  | 9.5 | %
|                                                
|                                                
|                                                
|                                                
|Rate of increase in future compensation levels   |  |      | 5.0 | %    |  |      | 5.0 | % |  |  | 5.0 | %
|                                                

The company also maintains certain defined
contribution and 401(k) plans. Participation in these plans is
available to certain U.S. employees. Costs for these plans were
$9.9 million, $10.0 million and $9.7 million in
2000, 1999 and 1998, respectively.

In addition to pension benefits, the company also
provides varying levels of postretirement health care benefits
to certain U.S. employees. Substantially all such employees are
covered by the companys principal plan, under which
benefits are provided to employees who retire from active
service after having attained age 55 and ten years of service.
The plan is contributory in nature. For employees retiring prior
to 1980, such contributions are based on varying percentages of
the current per-contract cost of benefits, with the company
funding any excess over these amounts. For employees retiring
after 1979, the dollar amount of the companys current and
future contributions is frozen.

The following table presents the components of
the companys postretirement health care cost under the
principal U.S. plan.



---

Postretirement Health Care Cost





|                                                               |  |      |     |      |  |      |     |   |  |   |     | 
|-------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- | - |  | - | --- | 
|(In millions)                                                  |  | 2000 |     | 1999 |  | 1998
|                                                              
|                                                              
|Service cost (benefits earned during the period)               |  | $    | .1  |      |  | $    | .2  |   |  | $ | .3  | 
|                                                              
|                                                              
|                                                              
|                                                              
|Interest cost on accumulated postretirement benefit obligation |  |      | 2.0 |      |  |      | 1.9 |   |  |   | 2.7 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Amortization of unrecognized gains                             |  |      | (.5 | )    |  |      | (.4 | ) |  |   |    | 
|                                                               |  |      |     |      |  |      |     |   |  |   |     | 
|Postretirement health care cost                                |  | $    | 1.6 |      |  | $    | 1.7 |   |  | $ | 3.0 | 
|                                                               |  |      |     |      |  |      |     |   |  |   |     | 
|                                                              

32



---



##### Table of Contents



Notes to Consolidated Financial Statements


The following table summarizes changes in the
accumulated postretirement benefit obligation for the principal
U.S. plan.



---

Accumulated Postretirement Benefit
Obligation





|                                   |  |      |       |      |  |   |       |  
|---------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|(In millions)                      |  | 2000 |       | 1999
|                                  
|                                  
|Balance at beginning of year       |  | $    | (25.9 | )    |  | $ | (29.3 | )
|                                  
|                                  
|                                  
|                                  
|Service cost                       |  |      | (.1   | )    |  |   | (.2   | )
|                                  
|                                  
|                                  
|                                  
|Interest cost                      |  |      | (2.0  | )    |  |   | (1.9  | )
|                                  
|                                  
|                                  
|                                  
|Benefits paid net of contributions |  |      | 3.3   |      |  |   | 3.5   |  
|                                  
|                                  
|                                  
|                                  
|Actuarial loss                     |  |      | (.9   | )    |  |   |      |  
|                                  
|                                  
|                                  
|                                  
|Change in discount rate            |  |      |      |      |  |   | 2.0   |  
|                                   |  |      |       |      |  |   |       |  
|Balance at year-end                |  | $    | (25.6 | )    |  | $ | (25.9 | )
|                                   |  |      |       |      |  |   |       |  
|                                  

The following table presents the components of
the companys liability for postretirement health care
benefits under the principal U.S. plan.



---

Accrued Postretirement Health Care
Benefits





|                                              |                                    |      |       |       |   |   |       |       |  
|--------------------------------------------- | ---------------------------------- | ---- | ----- | ----- | - | - | ----- | ----- | -
|(In millions)                                 |                                    | 2000 |       | 1999 
|                                             
|                                             
|Accumulated postretirement benefit obligation |                                    |      |       |       |   |   |       |      
|                                             
|                                             
|                                             
|                                             
|                                              | Retirees                           |      | $     | (20.2 | ) |   | $     | (20.2 | )
|                                             
|                                             
|                                             
|                                             
|                                              | Fully eligible active participants |      |       | (2.3  | ) |   |       | (2.0  | )
|                                             
|                                             
|                                             
|                                             
|                                              | Other active participants          |      |       | (3.1  | ) |   |       | (3.7  | )
|                                              |                                    |      |       |       |   |   |       |      
|                                              |                                    |      | (25.6 | )     |   |   | (25.9 | )    
|                                             
|                                             
|                                             
|                                             
|Unrecognized net gain                         |                                    |      | (8.1  | )     |   |   | (9.5  | )    
|                                              |                                    |      |       |       |   |   |       |      
|Accrued postretirement health care benefits   |                                    | $    | (33.7 | )     |   | $ | (35.4 | )    
|                                              |                                    |      |       |       |   |   |       |      
|                                             

The discount rate used in calculating the
accumulated postretirement benefit obligation was 7.75% for both
2000 and 1999. For 2001, the assumed rate of increase in health
care costs used to calculate the accumulated postretirement
benefit obligation is 7.2%. This rate is assumed to decrease to
varying degrees annually to 5.0% for years after 2005. Because
the dollar amount of the companys contributions for most
employees is frozen, a one percent change in each year in
relation to the above assumptions would not significantly change
the accumulated postretirement benefit obligation or the total
cost of the plan.

Income Taxes

Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The significant components of the
companys deferred tax assets and liabilities as of
year-end 2000 and 1999 are as follows:




---

Components of Deferred Tax Assets and
Liabilities





|                         |                                                                                                                 |                                                 |   |      |       |   |   |      |       |  
|------------------------ | --------------------------------------------------------------------------------------------------------------- | ----------------------------------------------- | - | ---- | ----- | - | - | ---- | ----- | -
|(In millions)            |                                                                                                                 | 2000                                            |   | 1999
|                        
|                        
|Deferred tax assets      |                                                                                                                 |                                                 |   |      |       |   |   |     
|                        
|                        
|                        
|                        
|                         | Net operating loss and tax credit carryforwards                                                                 |                                                 | $ | 41.9 |       |   | $ | 52.5 |      
|                        
|                        
|                        
|                        
|                         | Accrued postretirement health care benefits                                                                     |                                                 |   | 11.3 |       |   |   | 12.1 |      
|                        
|                        
|                        
|                        
|                         | Inventories, principally due to obsolescence reserves and
        additional costs inventoried for tax purposes |                                                 |   | 7.9  |       |   |   | 6.2  |      
|                        
|                        
|                        
|                        
|                         | Accrued employee benefits other than pensions and retiree health
        care benefits                          |                                                 |   | 9.2  |       |   |   | 11.4 |      
|                        
|                        
|                        
|                        
|                         | Accrued pension cost                                                                                            |                                                 |   | 10.3 |       |   |   | 10.5 |      
|                        
|                        
|                        
|                        
|                         | Accrued warranty cost                                                                                           |                                                 |   | 1.6  |       |   |   | 1.0  |      
|                        
|                        
|                        
|                        
|                         | Accrued taxes                                                                                                   |                                                 |   | 4.4  |       |   |   | 5.0  |      
|                        
|                        
|                        
|                        
|                         | Accounts receivable, principally due to allowances for doubtful
        accounts                                |                                                 |   | 2.3  |       |   |   | 2.8  |      
|                        
|                        
|                        
|                        
|                         | Accrued liabilities and other                                                                                   |                                                 |   | 29.7 |       |   |   | 32.6 |      
|                         |                                                                                                                 |                                                 |   |      |       |   |   |     
|                         |                                                                                                                 | Total deferred tax assets                       |   |      | 118.6 |   |   |      | 134.1 |  
|                        
|                        
|                        
|                        
|                         |                                                                                                                 | Less valuation allowances                       |   |      | (23.7 | ) |   |      | (35.3 | )
|                         |                                                                                                                 |                                                 |   |      |       |   |   |     
|                         |                                                                                                                 | Deferred tax assets net of valuation allowances |   |      | 94.9  |   |   |      | 98.8  |  
|Deferred tax liabilities |                                                                                                                 |                                                 |   |      |       |   |   |     
|                        
|                        
|                        
|                        
|                         | Property, plant and equipment, principally due to differences in
        depreciation methods                   |                                                 |   | 23.4 |       |   |   | 22.9 |      
|                        
|                        
|                        
|                        
|                         | Accounts receivable and inventories                                                                             |                                                 |   | 11.8 |       |   |   | 13.4 |      
|                        
|                        
|                        
|                        
|                         | Goodwill                                                                                                        |                                                 |   | 15.0 |       |   |   | 10.8 |      
|                        
|                        
|                        
|                        
|                         | Prepaid pension costs                                                                                           |                                                 |   | 6.8  |       |   |   | 5.3  |      
|                        
|                        
|                        
|                        
|                         | Other                                                                                                           |                                                 |   | 5.5  |       |   |   | 5.5  |      
|                         |                                                                                                                 |                                                 |   |      |       |   |   |     
|                         |                                                                                                                 | Total deferred tax liabilities                  |   |      | 62.5  |   |   |      | 57.9  |  
|                         |                                                                                                                 |                                                 |   |      |       |   |   |     
|                         | Net deferred tax assets                                                                                         |                                                 | $ | 32.4 |       |   | $ | 40.9 |      
|                         |                                                                                                                 |                                                 |   |      |       |   |   |     
|                        

33



---



##### Table of Contents



Notes to Consolidated Financial Statements


Summarized in the following tables are the
companys earnings before income taxes, its provision for
income taxes, the components of the provision for deferred
income taxes and a reconciliation of the U.S. statutory rate to
the tax provision rate.



---

Earnings from Continuing Operations Before
Income Taxes





|              |  |      |       |      |  |      |      |  |  |   |       | 
|------------- |  | ---- | ----- | ---- |  | ---- | ---- |  |  | - | ----- | 
|(In millions) |  | 2000 |       | 1999 |  | 1998
|             
|             
|United States |  | $    | 63.2  |      |  | $    | 61.9 |  |  | $ | 65.3  | 
|             
|             
|             
|             
|Non-U.S.      |  |      | 37.5  |      |  |      | 37.0 |  |  |   | 41.9  | 
|              |  |      |       |      |  |      |      |  |  |   |       | 
|              |  | $    | 100.7 |      |  | $    | 98.9 |  |  | $ | 107.2 | 
|              |  |      |       |      |  |      |      |  |  |   |       | 
|             

As presented in the above table, earnings from
U.S. and non-U.S. operations in 2000 include restructuring costs
$1.5 million and $1.2 million, respectively. Non-U.S.
operations for 2000 also includes a gain of $1.5 million on
the sale of the companys industrial magnets business. In
1999, earnings from U.S. operations includes restructuring costs
of $5.2 million. Earnings from non-U.S. operations in 1999
includes restructuring costs of $11.0 million and the gain
on the sale of the companys European extrusion systems
business of $13.1 million.



---

Provision for Income Taxes





|                   |                 |      |      |      |   |      |      |      |   |   |      |      |  
|------------------ | --------------- | ---- | ---- | ---- | - | ---- | ---- | ---- | - | - | ---- | ---- | -
|(In millions)      |                 | 2000 |      | 1999 |   | 1998
|                  
|                  
|Current provision  |                 |      |      |      |   |      |      |      |   |   |      |     
|                  
|                  
|                  
|                  
|                   | United States   |      | $    | 12.1 |   |      | $    | 2.0  |   |   | $    | 18.2 |  
|                  
|                  
|                  
|                  
|                   | State and local |      |      | (4.6 | ) |      |      | 2.3  |   |   |      | 4.3  |  
|                  
|                  
|                  
|                  
|                   | Non-U.S.        |      |      | 8.8  |   |      |      | 12.0 |   |   |      | 11.9 |  
|                   |                 |      |      |      |   |      |      |      |   |   |      |     
|                   |                 |      | 16.3 |      |   |      | 16.3 |      |   |   | 34.4 |     
|                  
|Deferred provision |                 |      |      |      |   |      |      |      |   |   |      |     
|                  
|                  
|                  
|                  
|                   | United States   |      |      | 10.7 |   |      |      | 10.6 |   |   |      | .8   |  
|                  
|                  
|                  
|                  
|                   | Non-U.S.        |      |      | (1.6 | ) |      |      | (.5  | ) |   |      | (7.1 | )
|                   |                 |      |      |      |   |      |      |      |   |   |      |     
|                   |                 |      | 9.1  |      |   |      | 10.1 |      |   |   | (6.3 | )   
|                   |                 |      |      |      |   |      |      |      |   |   |      |     
|                   |                 | $    | 25.4 |      |   | $    | 26.4 |      |   | $ | 28.1 |     
|                   |                 |      |      |      |   |      |      |      |   |   |      |     
|                  



---

Components of the Provision 
 for Deferred Income Taxes





|                                                                 |  |      |       |      |  |      |      |   |  |   |      |  
|---------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ---- | - |  | - | ---- | -
|(In millions)                                                    |  | 2000 |       | 1999 |  | 1998
|                                                                
|                                                                
|Change in valuation allowances                                   |  | $    | (11.6 | )    |  | $    | (1.7 | ) |  | $ | (7.1 | )
|                                                                
|                                                                
|                                                                
|                                                                
|Change in deferred taxes related to operating loss carryforwards |  |      | 10.6  |      |  |      | 13.2 |   |  |   | (1.3 | )
|                                                                
|                                                                
|                                                                
|                                                                
|Depreciation and amortization                                    |  |      | 4.7   |      |  |      | 4.0  |   |  |   | 6.7  |  
|                                                                
|                                                                
|                                                                
|                                                                
|Inventories and accounts receivable                              |  |      | (1.6  | )    |  |      | (0.5 | ) |  |   | 3.3  |  
|                                                                
|                                                                
|                                                                
|                                                                
|Accrued pension and other employee costs                         |  |      | 2.4   |      |  |      | 0.5  |   |  |   | (3.6 | )
|                                                                
|                                                                
|                                                                
|                                                                
|Other                                                            |  |      | 4.6   |      |  |      | (5.4 | ) |  |   | (4.3 | )
|                                                                 |  |      |       |      |  |      |      |   |  |   |      |  
|                                                                 |  | $    | 9.1   |      |  | $    | 10.1 |   |  | $ | (6.3 | )
|                                                                 |  |      |       |      |  |      |      |   |  |   |      |  
|                                                                



---

Reconciliation of the U.S. Statutory Rate to
the Tax Provision Rate





|                                   |                                                        |      |      |       |   |      |      |      |   |  |      |       |  
|---------------------------------- | ------------------------------------------------------ | ---- | ---- | ----- | - | ---- | ---- | ---- | - |  | ---- | ----- | -
|                                   |                                                        | 2000 |      | 1999  |   | 1998
|                                  
|                                  
|U.S. statutory tax rate            |                                                        |      | 35.0 | %     |   |      | 35.0 | %    |   |  | 35.0 | %    
|Increase (decrease) resulting from |                                                        |      |      |       |   |      |      |      |   |  |      |      
|                                  
|                                  
|                                  
|                                  
|                                   | Tax benefits from net reversal of valuation allowances |      |      | (15.6 | ) |      |      | (1.2 | ) |  |      | (10.1 | )
|                                  
|                                  
|                                  
|                                  
|                                   | Losses without current tax benefits                    |      |      | 4.0   |   |      |      | 1.7  |   |  |      | 2.3   |  
|                                  
|                                  
|                                  
|                                  
|                                   | Adjustment of tax reserves                             |      |      | (5.8  | ) |      |      | (7.1 | ) |  |      |      |  
|                                  
|                                  
|                                  
|                                  
|                                   | Statutory tax rate changes                             |      |      | 4.3   |   |      |      | 5.3  |   |  |      |      |  
|                                  
|                                  
|                                  
|                                  
|                                   | U.S. federal income tax credits                        |      |      | (.7   | ) |      |      | (3.0 | ) |  |      | (2.6  | )
|                                  
|                                  
|                                  
|                                  
|                                   | Effect of operations outside the U.S.                  |      |      | 1.3   |   |      |      | (4.2 | ) |  |      | (1.3  | )
|                                  
|                                  
|                                  
|                                  
|                                   | State and local income taxes, net of federal benefit   |      |      | 3.1   |   |      |      | 1.5  |   |  |      | 2.6   |  
|                                  
|                                  
|                                  
|                                  
|                                   | Other                                                  |      |      | (.4   | ) |      |      | (1.3 | ) |  |      | .3    |  
|                                   |                                                        |      |      |       |   |      |      |      |   |  |      |      
|                                   |                                                        |      | 25.2 | %     |   |      | 26.7 | %    |   |  | 26.2 | %    
|                                   |                                                        |      |      |       |   |      |      |      |   |  |      |      
|                                  

At year-end 2000, certain of the companys
non-U.S. subsidiaries had net operating loss carryforwards
aggregating approximately $120.3 million, substantially all
of which have no expiration dates.

Undistributed earnings of foreign subsidiaries
which are intended to be indefinitely reinvested aggregated
$129.7 million at the end of 2000.

34



---



##### Table of Contents



Notes to Consolidated Financial Statements


Income taxes of $14.7 million,
$3.0 million and $32.2 million were paid in 2000, 1999
and 1998, respectively.

Earnings Per Common Share

The following tables present the calculation of
earnings available to common shareholders and a reconciliation
of the shares used to calculate basic and diluted earnings per
common share.




---

Earnings Available to Common
Shareholders





|                                          |  |      |      |      |  |      |      |   |  |   |      |  
|----------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  | - | ---- | -
|(In millions)                             |  | 2000 |      | 1999 |  | 1998
|                                         
|                                         
|Net earnings                              |  | $    | 72.3 |      |  | $    | 70.1 |   |  | $ | 41.5 |  
|                                         
|                                         
|                                         
|                                         
|Less dividends on Preferred shares        |  |      | (.2  | )    |  |      | (.2  | ) |  |   | (.2  | )
|                                          |  |      |      |      |  |      |      |   |  |   |      |  
|Earnings available to common shareholders |  | $    | 72.1 |      |  | $    | 69.9 |   |  | $ | 41.3 |  
|                                          |  |      |      |      |  |      |      |   |  |   |      |  
|                                         



---

Reconciliation of Shares





|                                                       |  |      |        |      |  |      |        |  |  |  |        | 
|------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|(In thousands)                                         |  | 2000 |        | 1999 |  | 1998
|                                                      
|                                                      
|Weighted-average common shares outstanding             |  |      | 34,935 |      |  |      | 36,847 |  |  |  | 38,875 | 
|                                                      
|                                                      
|                                                      
|                                                      
|Effect of dilutive stock options and restricted shares |  |      | 111    |      |  |      | 202    |  |  |  | 366    | 
|                                                       |  |      |        |      |  |      |        |  |  |  |        | 
|Weighted-average common shares assuming dilution       |  |      | 35,046 |      |  |      | 37,049 |  |  |  | 39,241 | 
|                                                       |  |      |        |      |  |      |        |  |  |  |        | 
|                                                      

Weighted-average shares assuming dilution
excludes restricted shares subject to contingent vesting based
on the attainment of specified earnings objectives (see
Stock-Based Compensation).

Receivables

Under the terms of the companys receivables
purchase agreement, the company sells an ongoing basis and
without recourse an undivided percentage ownership interest in
designated pools of accounts receivable. To maintain the balance
in the designated pools of accounts receivable sold, the company
is obligated to sell undivided percentage interests in new
receivables as existing receivables are collected. The agreement
permits the sale of up to $85.0 million of undivided
interests in accounts receivable through August, 2001.


At December 31, 2000, 1999 and 1998, the
undivided interest in the companys gross accounts
receivable that had been sold to the purchasers aggregated
$85.0 million, $75.0 million and $63.1 million,
respectively. Increases and decreases in the amount sold are
reported as operating cash flows in the Consolidated Statements
of Cash Flows. Costs related to the sales are included in other
costs and expenses-net in the Consolidated Statements of
Earnings.

Inventories

Inventories amounting to $111.3 million in
2000 and $99.5 million in 1999 are stated at LIFO cost. If
stated at FIFO cost, such inventories would be greater by
approximately $16.5 million in 2000 and $17.4 million
in 1999.


As presented in the Consolidated Balance Sheets,
inventories are net of reserves for obsolescence of
$36.2 million and $37.6 million in 2000 and 1999,
respectively.

Property, Plant and Equipment

The components of property, plant and equipment
are shown in the following table.




---

Property, Plant and Equipment 
Net





|                              |  |      |        |      |  |   |        |  
|----------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|(In millions)                 |  | 2000 |        | 1999
|                             
|                             
|Land                          |  | $    | 12.7   |      |  | $ | 14.8   |  
|                             
|                             
|                             
|                             
|Buildings                     |  |      | 143.2  |      |  |   | 144.6  |  
|                             
|                             
|                             
|                             
|Machinery and equipment       |  |      | 443.7  |      |  |   | 430.1  |  
|                              |  |      |        |      |  |   |        |  
|                              |  |      | 599.6  |      |  |   | 589.5  |  
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |      | (294.1 | )    |  |   | (266.3 | )
|                              |  |      |        |      |  |   |        |  
|                              |  | $    | 305.5  |      |  | $ | 323.2  |  
|                              |  |      |        |      |  |   |        |  
|                             

Liabilities

The components of accrued and other current
liabilities and long-term accrued liabilities are shown in the
following tables.




---

Accrued and Other Current
Liabilities





|                                               |  |      |       |      |  |   |       | 
|---------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|(In millions)                                  |  | 2000 |       | 1999
|                                              
|                                              
|                                              
|                                              
|                                              
|                                              
|Accrued salaries, wages and other compensation |  | $    | 48.1  |      |  | $ | 53.6  | 
|                                              
|                                              
|                                              
|                                              
|Accrued and deferred income taxes              |  |      | 17.9  |      |  |   | 16.1  | 
|                                              
|                                              
|                                              
|                                              
|Other accrued expenses                         |  |      | 92.9  |      |  |   | 103.0 | 
|                                               |  |      |       |      |  |   |       | 
|                                               |  | $    | 158.9 |      |  | $ | 172.7 | 
|                                               |  |      |       |      |  |   |       | 
|                                              

35



---



##### Table of Contents



Notes to Consolidated Financial Statements




---

Long-Term Accrued Liabilities





|                                            |  |      |       |      |  |   |       | 
|------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|(In millions)                               |  | 2000 |       | 1999
|                                           
|                                           
|Accrued pensions and other compensation     |  | $    | 63.1  |      |  | $ | 69.1  | 
|                                           
|                                           
|                                           
|                                           
|Accrued postretirement health care benefits |  |      | 37.3  |      |  |   | 38.9  | 
|                                           
|                                           
|                                           
|                                           
|Accrued and deferred income taxes           |  |      | 34.8  |      |  |   | 27.5  | 
|                                           
|                                           
|                                           
|                                           
|Minority shareholders interests            |  |      | 23.3  |      |  |   | 22.2  | 
|                                           
|                                           
|                                           
|                                           
|Other                                       |  |      | 33.3  |      |  |   | 33.1  | 
|                                            |  |      |       |      |  |   |       | 
|                                            |  | $    | 191.8 |      |  | $ | 190.8 | 
|                                            |  |      |       |      |  |   |       | 
|                                           

Long-Term Debt

The components of long-term debt are shown in the
following table.




---

Long-Term Debt





|                          |  |      |       |      |  |   |        |  
|------------------------- |  | ---- | ----- | ---- |  | - | ------ | -
|(In millions)             |  | 2000 |       | 1999
|                         
|                         
|8 3/8% Notes due 2004     |  | $    | 115.0 |      |  | $ | 115.0  |  
|                         
|                         
|                         
|                         
|7 5/8% Eurobonds due 2005 |  |      | 104.6 |      |  |   |       |  
|                         
|                         
|                         
|                         
|7 7/8% Notes due 2000     |  |      |      |      |  |   | 100.0  |  
|                         
|                         
|                         
|                         
|Revolving credit facility |  |      | 146.1 |      |  |   | 156.9  |  
|                         
|                         
|                         
|                         
|Other                     |  |      | 25.3  |      |  |   | 33.2   |  
|                          |  |      |       |      |  |   |        |  
|                          |  |      | 391.0 |      |  |   | 405.1  |  
|                         
|                         
|                         
|                         
|Less current maturities   |  |      | (8.4  | )    |  |   | (107.0 | )
|                          |  |      |       |      |  |   |        |  
|                          |  | $    | 382.6 |      |  | $ | 298.1  |  
|                          |  |      |       |      |  |   |        |  
|                         

A portion of the outstanding borrowings under the
companys revolving credit facility is included in
long-term debt based on the expectation that these borrowings
will remain outstanding for more than one year. These borrowings
are at variable interest rates, which had a weighted average of
7.4% per year at December 31, 2000 and 6.7% per year at
December 31, 1999.

As presented in the previous table, current
maturities of long-term debt at December 31, 1999 includes
the 7 7/8% Notes due 2000 which were repaid on May 15,
2000.

On April 6, 2000, the company received the
proceeds from a public debt offering in Europe of
Euro 115 million (approximately $110 million) of
7 5/8% Eurobonds with a maturity date of April 6,
2005.

Except for the 7 5/8% Eurobonds due 2005,
the carrying amount of the companys long-term debt
approximates fair value, which is determined using discounted
cash flow analysis based on the companys incremental
borrowing rate for similar types of financing arrangements. At
year-end 2000, the fair value of the 7 5/8% Eurobonds due
2005 was $100.0 million. This amount is based on recent
quoted prices.

Certain of the above long-term debt obligations
contain various restrictions and financial covenants relating
principally to additional secured indebtedness. Except for minor
amounts borrowed under Industrial Revenue Development Bonds and
similar financing arrangements, none of the companys
existing indebtedness is secured.

Interest paid was $33.1 million in 2000,
$38.1 million in 1999 and $31.9 million in 1998.

Maturities of long-term debt for the five years
after 2000 are:



---

Maturities of Long-Term Debt





|              |  |   |       | 
|------------- |  | - | ----- | 
|(In millions) |  |  
|             
|             
|2001          |  | $ | 8.4   | 
|             
|             
|             
|             
|2002          |  |   | 2.2   | 
|             
|             
|             
|             
|2003          |  |   | 4.3   | 
|             
|             
|             
|             
|2004          |  |   | 116.2 | 
|             
|             
|             
|             
|2005          |  |   | 252.0 | 
|             

The company leases certain equipment and
facilities under operating leases, some of which include varying
renewal and purchase options. Future minimum rental payments
applicable to noncancelable operating leases during the next
five years and in the aggregate thereafter are:



---

Rental Payments





|              |  |   |      | 
|------------- |  | - | ---- | 
|(In millions) |  |  
|             
|             
|2001          |  | $ | 20.6 | 
|             
|             
|             
|             
|2002          |  |   | 14.7 | 
|             
|             
|             
|             
|2003          |  |   | 12.0 | 
|             
|             
|             
|             
|2004          |  |   | 8.3  | 
|             
|             
|             
|             
|2005          |  |   | 6.8  | 
|             
|             
|             
|             
|After 2005    |  |   | 32.8 | 
|             

Rent expense for continuing operations was
$23.6 million, $22.3 million and $17.8 million in
2000, 1999 and 1998, respectively.

36



---



##### Table of Contents



Notes to Consolidated Financial Statements


Lines of Credit

At year-end 2000, the company had lines of credit
with various U.S. and non-U.S. banks of approximately
$574 million, including a $375 million committed
revolving credit facility which expires in January, 2005. These
credit facilities support letters of credit and leases in
addition to providing borrowings under varying terms. Under the
provisions of the revolving credit facility, the companys
additional borrowing capacity totaled approximately
$287 million at December 31, 2000.


The weighted-average interest rate on borrowings
under lines of credit outstanding as of year-end was 7.5% for
2000 and 6.6% for 1999.

Shareholders Equity

On October 2, 1998, the company announced
its intention to repurchase up to two million of its outstanding
common shares on the open market, of which 1,239,700 were
repurchased during the fourth quarter of 1998. The remaining
760,300 shares were repurchased in the first quarter of 1999.
For all of 1999, the company repurchased a total of 960,300
treasury shares at a cost of $16.3 million. During 1999, 948
treasury shares were reissued. Additional shares totaling
103,168 were repurchased in 1999 in connection with current
exercises of stock options and restricted share grants in lieu
of the use of authorized but unissued shares or treasury
shares.


On February 4, 2000, the companys
Board of Directors approved an additional share repurchase
program authorizing the repurchase of up to four million common
shares on the open market, of which 3,271,800 were repurchased
during 2000. In total, the company purchased 3,349,938 treasury
shares in 2000 at a cost of $48.7 million. An additional
43,516 shares were purchased on the open market in 2000 for
management incentive and employee benefit programs. A total of
78,000 treasury shares were reissued in the first quarter of
2000 in connection with restricted share grants.




Shareholders Equity 
Preferred and Common Shares





|                                                                                                                                                    |  |      |      |      |  |  |      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | ---- |  |  | ---- | 
|(In millions, except share                                                                                                                          |  |      |      |     
|and per-share amounts)                                                                                                                              |  | 2000 |      | 1999
|                                                                                                                                                   
|                                                                                                                                                   
|4% Cumulative Preferred shares authorized, issued and
        outstanding, 60,000 shares at $100 par value, redeemable at $105
        a share      |  |      | $6.0 |      |  |  | $6.0 | 
|                                                                                                                                                   
|                                                                                                                                                   
|                                                                                                                                                   
|                                                                                                                                                   
|Common shares, $1 par value, authorized 50,000,000 shares,
        issued and outstanding, 2000: 33,345,596 shares; 1999:
        36,807,968 shares |  |      | 33.3 |      |  |  | 36.8 | 
|                                                                                                                                                   

As presented in the previous table, common shares
outstanding are net of treasury shares of 6,307,125 in 2000 and
3,035,187 in 1999.

The company has authorized ten million serial
preference shares with $1 par value. None of these shares has
been issued.

Holders of company common shares have one vote
per share until they have held their shares at least 36
consecutive months, after which they are entitled to ten votes
per share.

In February, 1999, the companys Board of
Directors approved a stockholder rights plan which provides for
the issuance of one nonvoting preferred stock right for each
common share issued as of February 5, 1999 or issued
subsequent thereto. Each right, if activated, will entitle the
holder to purchase 1/1000 of a share of Series A
Participating Cumulative Preferred Stock at an initial exercise
price of $70.00. Each 1/1000 of a preferred share will be
entitled to participate in dividends and vote on an equivalent
basis with one whole common share. Initially, the rights are not
exercisable. The rights will become exercisable if any person or
group acquires, or makes a tender offer for, more than 15% of
the companys outstanding common shares. In the event that
any party should acquire more than 15% of the companys
common shares without the approval of the Board of Directors,
the rights entitle all other shareholders to purchase the
preferred shares at a substantial discount. In addition, if a
merger occurs with any potential acquirer owning more than 15%
of the shares outstanding, holders of rights other than the
potential acquirer will be able to purchase the acquirers
common stock at a substantial discount. The rights plan expires
in February, 2009.

37



---



##### Table of Contents



Notes to Consolidated Financial Statements


Comprehensive Income

Total comprehensive income represents the net
change in shareholders equity during a period from sources
other than transactions with shareholders and, as such, includes
net earnings. For the company, the only other component of total
comprehensive income is the net change in the cumulative foreign
currency translation adjustments recorded in shareholders
equity.


Changes in cumulative foreign currency
translation adjustments are as follows:



---

Cumulative Foreign Currency Translation
Adjustments





|                                                                            |  |      |       |      |  |      |       |   |  |   |       |  
|--------------------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(In millions)                                                               |  | 2000 |       | 1999 |  | 1998
|                                                                           
|                                                                           
|Balance at beginning of year                                                |  | $    | (35.4 | )    |  | $    | (14.4 | ) |  | $ | (35.0 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Effect of exchange rate fluctuations                                        |  |      | (14.3 | )    |  |      | (21.5 | ) |  |   | 3.5   |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Reclassification adjustments for items included in net earnings
        (a) |  |      |      |      |  |      | .5    |   |  |   | 17.1  |  
|                                                                            |  |      |       |      |  |      |       |   |  |   |       |  
|                                                                            |  | $    | (49.7 | )    |  | $    | (35.4 | ) |  | $ | (14.4 | )
|                                                                            |  |      |       |      |  |      |       |   |  |   |       |  
|                                                                           



|    |                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The 1999 amount relates to the sale of the
        companys European extrusion systems business and the 1998
        amount relates to the sale of the discontinued machine tools
        segment.

Contingencies

The company is involved in remedial
investigations and actions at various locations, including
former plant facilities, and EPA Superfund sites where the
company and other companies have been designated as potentially
responsible parties. The company accrues remediation costs, on
an undiscounted basis, when it is probable that a liability has
been incurred and the amount of the liability can be reasonably
estimated. Accruals for estimated losses from environmental
remediation obligations generally are recognized no later than
the completion of a remediation feasibility study. The accruals
are adjusted as further information becomes available or
circumstances change. Environmental costs have not been material
in the past.


Various lawsuits arising during the normal course
of business are pending against the company and its consolidated
subsidiaries.

In the opinion of management, the ultimate
liability, if any, resulting from these matters will have no
significant effect on the companys consolidated financial
position or results of operations.

Foreign Exchange Contracts

The company enters into forward contracts to
hedge foreign currency commitments on an ongoing basis for
periods commensurate with known exposures. The purpose of this
practice is to minimize the effect of foreign currency exchange
rate fluctuations on the companys operating results. The
company does not engage in speculation. The companys
exposure to credit-related losses from these transactions is
considered to be minimal due to the high credit ratings of the
parties involved.


At December 31, 2000, the company had
outstanding forward contracts totaling $14.3 million, which
generally mature in periods of six months or less. These
contracts require the company and its subsidiaries to exchange
currencies at the maturity dates at exchange rates agreed upon
at inception. Due to the short-term nature of these contracts,
their fair values approximate their contract values as of
December 31, 2000.

Stock-Based Compensation

The 1997 Long-Term Incentive Plan (1997 Plan)
permits the company to grant its common shares in the form of
non-qualified stock options, incentive stock options, restricted
stock and performance awards.


As originally adopted, the 1997 Plan provided for
grants of up to 2,000,000 common shares. However, in April,
2000, the companys shareholders approved an amendment to
the plan which provides for 2,400,000 additional grants.

Under the 1997 Plan, non-qualified and incentive
stock options are granted at market value, vest in increments
over a five year period, and expire ten years subsequent to the
award. Of the 4,081,275 stock options outstanding at year-end
2000, 295,000 are incentive stock options.

38



---



##### Table of Contents



Notes to Consolidated Financial Statements


Summaries of stock options granted under the 1997
Plan and prior plans are presented in the following
tables.



---

Stock Option Activity





|                             |           |        |           |          |   |   |       |       | 
|---------------------------- | --------- | ------ | --------- | -------- | - | - | ----- | ----- | 
|                             |           |        |           | Weighted
|                             |           |        |           | Average 
|                             |           |        |           | Exercise
|                             |           | Shares |           | Price   
|                            
|                            
|Outstanding at year-end 1997 |           |        | 3,063,612 |          |   | $ | 21.13 |      
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 633,700  |   |   |       | 27.35 | 
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (259,303 | ) |   |       | 20.13 | 
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (28,606  | ) |   |       | 23.82 | 
|                             |           |        |           |          |   |   |       |      
|Outstanding at year-end 1998 |           |        | 3,409,403 |          |   |   | 22.34 |      
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 455,500  |   |   |       | 19.67 | 
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (8,440   | ) |   |       | 15.21 | 
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (106.184 | ) |   |       | 22.78 | 
|                             |           |        |           |          |   |   |       |      
|Outstanding at year-end 1999 |           |        | 3,750,279 |          |   |   | 22.02 |      
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 717,800  |   |   |       | 13.51 | 
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (28,500  | ) |   |       | 9.50  | 
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (358,304 | ) |   |       | 20.71 | 
|                             |           |        |           |          |   |   |       |      
|Outstanding at year-end 2000 |           |        | 4,081,275 |          |   |   | 20.65 |      
|                             |           |        |           |          |   |   |       |      
|                            



---

Exercisable Stock Options at
Year-end





|     |  |         |           | 
|---- |  | ------- | --------- | 
|     |  | Stock  
|     |  | Options
|    
|    
|1998 |  |         | 1,433,759 | 
|    
|    
|    
|    
|1999 |  |         | 1,871,467 | 
|    
|    
|    
|    
|2000 |  |         | 2,134,700 | 
|    



---

Shares Available for Future Grant at
Year-end





|     |  |        |           | 
|---- |  | ------ | --------- | 
|     |  | Shares
|    
|    
|1998 |  |        | 599,057   | 
|    
|    
|    
|    
|1999 |  |        | 141,552   | 
|    
|    
|    
|    
|2000 |  |        | 2,130,595 | 
|    

The following tables summarize information about
stock options outstanding at December 31, 2000.



---

Components of Outstanding Stock
Options





|         |             |             |  |           |           |          |  |  |     |  |  |   |       | 
|-------- | ----------- | ----------- |  | --------- | --------- | -------- |  |  | --- |  |  | - | ----- | 
|         |             |             |  | Average   |           | Weighted
|Range of |             |             |  | Remaining |           | Average 
|Exercise |             | Number      |  | Contract  |           | Exercise
|Prices   |             | Outstanding |  | Life      |           | Price   
|        
|        
|$        | 8.50-19.66  |             |  |           | 1,252,250 |          |  |  | 5.8 |  |  | $ | 13.55 | 
|         | 20.00-27.91 |             |  |           | 2,829,025 |          |  |  | 5.6 |  |  |   | 23.80 | 
|         |             |             |  |           |           |          |  |  |     |  |  |   |       | 
|         | 8.50-27.91  |             |  |           | 4,081,275 |          |  |  | 5.7 |  |  |   | 20.65 | 
|         |             |             |  |           |           |          |  |  |     |  |  |   |       | 
|        



---

Components of Exercisable Stock
Options





|         |             |             |  |          |           |  |  |   |       | 
|-------- | ----------- | ----------- |  | -------- | --------- |  |  | - | ----- | 
|         |             |             |  | Weighted
|Range of |             |             |  | Average 
|Exercise |             | Number      |  | Exercise
|Prices   |             | Exercisable |  | Price   
|        
|        
|$        | 8.50-19.66  |             |  |          | 469,850   |  |  | $ | 13.58 | 
|         | 20.00-27.91 |             |  |          | 1,664,850 |  |  |   | 23.55 | 
|         |             |             |  |          |           |  |  |   |       | 
|         | 8.50-27.91  |             |  |          | 2,134,700 |  |  |   | 21.36 | 
|         |             |             |  |          |           |  |  |   |       | 
|        

Because the company accounts for stock-based
compensation in accordance with Accounting Principles Board
Opinion No. 25 and because stock options outstanding under
the 1997 Plan and prior plans have exercise prices equal to the
market price of the companys common shares at the grant
dates, no compensation expense is recognized. Pro forma earnings
amounts prepared under the assumption that the stock options
granted in years 1995 through 2000 had been accounted for based
on their fair value as determined under Statement of Financial
Accounting Standards No. 123, Accounting for
Stock-Based Compensation, are presented in the following
table.



---

Pro Forma Earnings





|                                        |         |      |      |      |  |      |      |      |  |   |      |     | 
|--------------------------------------- | ------- | ---- | ---- | ---- |  | ---- | ---- | ---- |  | - | ---- | --- | 
|(In millions, except per-share amounts) |         | 2000 |      | 1999 |  | 1998
|                                       
|                                       
|Net earnings                            |         | $    | 70.7 |      |  | $    | 67.1 |      |  | $ | 38.1 |    
|                                        |         |      |      |      |  |      |      |      |  |   |      |    
|Net earnings per common share           |         |      |      |      |  |      |      |      |  |   |      |    
|                                       
|                                       
|                                       
|                                       
|                                        | Basic   |      | $    | 2.02 |  |      | $    | 1.81 |  |   | $    | .97 | 
|                                        |         |      |      |      |  |      |      |      |  |   |      |    
|                                        | Diluted |      | $    | 2.01 |  |      | $    | 1.81 |  |   | $    | .96 | 
|                                        |         |      |      |      |  |      |      |      |  |   |      |    
|                                       

The weighted-average per-share fair value of
stock options granted during 2000, 1999 and 1998 was $4.15,
$6.02 and $8.38, respectively. The fair value of the
options

39



---



##### Table of Contents



Notes to Consolidated Financial Statements


was calculated as of the grant dates using the
Black-Scholes option pricing model using the following
assumptions:



---

Fair Value Assumptions





|                                      |  |      |            |      |  |      |          |   |  |  |          |  
|------------------------------------- |  | ---- | ---------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                      |  | 2000 |            | 1999 |  | 1998
|                                     
|                                     
|Dividend yield                        |  |      | 3.7        | %    |  |      | 2.4      | % |  |  | 1.76     | %
|                                     
|                                     
|                                     
|                                     
|Expected volatility                   |  |      | 38-48      | %    |  |      | 35-41    | % |  |  | 32- 39   | %
|                                     
|                                     
|                                     
|                                     
|Risk free interest rate at grant date |  |      | 6.61- 6.63 | %    |  |      | 4.9- 5.6 | % |  |  | 5.4- 5.6 | %
|                                     
|                                     
|                                     
|                                     
|Expected life in years                |  |      | 2-7        |      |  |      | 2-7      |   |  |  | 2-7      |  
|                                     

Statement of Financial Accounting Standards
No. 123 does not apply to awards granted prior to 1995.
Because additional awards in future years are anticipated the
pro forma effects of applying this statement presented above are
not necessarily indicative of future amounts.

Under the 1997 Plan, performance awards are
granted in the form of restricted stock awards which vest based
on the achievement of specified earnings objectives over a three
year period. The 1997 Plan also permits the granting of other
restricted stock awards, which also vest three years from the
date of grant. During the restriction period, restricted stock
awards entitle the holder to all the rights of a holder of
common shares, including dividend and voting rights. Unvested
shares are restricted as to disposition and subject to
forfeiture under certain circumstances. The amount of
compensation expense recognized for restricted stock, including
performance awards, was $.5 million in 2000 and
$4.6 million in 1998. In 1999, reversals of prior
years accruals for performance grants resulted in a net
benefit from restricted stock of $5.8 million. Restricted stock
award activity is as follows:



---

Restricted Stock Activity





|                                               |  |      |        |      |  |      |        |  |  |   |        | 
|---------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                               |  | 2000 |        | 1999 |  | 1998
|                                              
|                                              
|Restricted stock granted                       |  |      | 86,000 |      |  |      | 81,974 |  |  |   | 92,194 | 
|                                               |  |      |        |      |  |      |        |  |  |   |        | 
|Weighted-average market value on date of grant |  | $    | 13.13  |      |  | $    | 20.09  |  |  | $ | 27.02  | 
|                                               |  |      |        |      |  |      |        |  |  |   |        | 
|                                              

Restricted shares awarded as performance awards
subject to contingent vesting totaled 68,000 in 2000, 68,174 in
1999 and 52,694 in 1998. Outstanding restricted shares subject
to contingent vesting totaled 173,075, 267,808 and 216,840 at
year-end 2000, 1999 and 1998, respectively. The amount
outstanding at year-end 2000 includes 42,345 shares that will be
cancelled in February, 2001, because the basic earnings per
common share objective for 2000 was not attained. In February,
2000, 153,488 restricted shares subject to contingent vesting
that had been outstanding at year-ends 1999 and 1998 were also
cancelled.

Cancellations of restricted stock, including
shares cancelled to pay employee withholding taxes at maturity,
totaled 190,434 in 2000, 38,262 in 1999 and 56,595 in
1998.

Issuances of shares related to performance awards
earned under a prior plan and to deferred directors fees
totaled 7,016 in 2000, 12,754 in 1999 and 10,819 in 1998.

Organization

The company operates in two business segments:
plastics technologies and metalworking technologies. The company
has operations in the United States and other countries located
principally in western Europe and Asia.


The companys business segments are
determined based on the nature of the products produced and the
markets served. The plastics technologies segment includes the
production of injection molding machines, mold bases, systems
for extrusion and blow molding and various other specialty
equipment. The market is driven by the consumer economy and the
automotive and construction industries. The metalworking
technologies segment serves a variety of industries, including
the automotive industry. It produces four basic types of
industrial products: metalcutting tools (carbide inserts and
round tools), metalworking fluids, precision grinding wheels and
carbide wear parts. The markets for both business segments are
highly competitive and can be cyclical in nature.

Financial data for the past three years for the
companys business segments are shown in the following
tables. The accounting policies followed by the segments are
identical to those used in the preparation of the companys
consolidated financial statements. The effects of intersegment
transactions, which are not material in amount, have been
eliminated. The company incurs costs and expenses and holds
certain assets at the corporate level which relate to its
business as a whole. Certain of these amounts have been
allocated to the companys business segments by various
methods, largely on the basis of usage. Management believes that
all such allocations are reasonable.

40



---



##### Table of Contents



Notes to Consolidated Financial Statements




---

Sales by Segment





|                          |  |      |         |      |  |      |         |  |  |   |         | 
|------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|(In millions)             |  | 2000 |         | 1999 |  | 1998
|                         
|                         
|Plastics technologies     |  | $    | 873.8   |      |  | $    | 904.2   |  |  | $ | 796.4   | 
|                         
|                         
|                         
|                         
|Metalworking technologies |  |      | 710.4   |      |  |      | 720.5   |  |  |   | 718.3   | 
|                          |  |      |         |      |  |      |         |  |  |   |         | 
|Total sales               |  | $    | 1,584.2 |      |  | $    | 1,624.7 |  |  | $ | 1,514.7 | 
|                          |  |      |         |      |  |      |         |  |  |   |         | 
|                         



---

Operating Information by Segment





|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |       |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------- | ---- | ------- | ----- | - | ---- | ------- | ----- | - | - | ------- | ----- | -
|(In millions)                                                                                        |                                         | 2000 |         | 1999  |   | 1998
|                                                                                                    
|                                                                                                    
|Operating earnings                                                                                   |                                         |      |         |       |   |      |         |       |   |   |         |      
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Plastics technologies                   |      | $       | 97.0  |   |      | $       | 89.3  |   |   | $       | 80.3  |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Metalworking technologies               |      |         | 70.7  |   |      |         | 72.8  |   |   |         | 82.2  |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Restructuring costs (a)                 |      |         | (2.7  | ) |      |         | (16.2 | ) |   |         |      |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Gains on divestitures of businesses (b) |      |         | 1.5   |   |      |         | 13.1  |   |   |         |      |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Corporate expenses                      |      |         | (18.7 | ) |      |         | (16.5 | ) |   |         | (18.9 | )
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Other unallocated expenses (c)          |      |         | (7.6  | ) |      |         | (5.4  | ) |   |         | (5.7  | )
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|Operating earnings                                                                                   |                                         |      | 140.2   |       |   |      | 137.1   |       |   |   | 137.9   |      
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|Interest expense-net                                                                                 |                                         |      | (39.5   | )     |   |      | (38.2   | )     |   |   | (30.7   | )    
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|Earnings from continuing operations before income taxes and
        minority shareholders interests |                                         | $    | 100.7   |       |   | $    | 98.9    |       |   | $ | 107.2   |      
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|                                                                                                    
|Segment assets (d) Plastics technologies                                                             |                                         | $    | 850.5   |       |   | $    | 850.8   |       |   | $ | 882.8   |      
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Metalworking technologies               |      |         | 517.7 |   |      |         | 552.8 |   |   |         | 547.2 |  
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|                                                                                                     |                                         |      | 1,368.2 |       |   |      | 1,403.6 |       |   |   | 1,430.0 |      
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Cash and cash equivalents               |      |         | 41.2  |   |      |         | 81.3  |   |   |         | 48.9  |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Receivables sold                        |      |         | (85.0 | ) |      |         | (75.0 | ) |   |         | (63.1 | )
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Deferred income taxes                   |      |         | 52.4  |   |      |         | 52.4  |   |   |         | 55.0  |  
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                    
|                                                                                                     | Unallocated corporate and other (e)     |      |         | 88.1  |   |      |         | 74.4  |   |   |         | 86.3  |  
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|Total assets                                                                                         |                                         | $    | 1,464.9 |       |   | $    | 1,536.7 |       |   | $ | 1,557.1 |      
|                                                                                                     |                                         |      |         |       |   |      |         |       |   |   |         |      
|                                                                                                    



---

Operating Information by Segment





|                                    |                                    |      |      |      |  |      |      |      |  |   |      |      | 
|----------------------------------- | ---------------------------------- | ---- | ---- | ---- |  | ---- | ---- | ---- |  | - | ---- | ---- | 
|(In millions)                       |                                    | 2000 |      | 1999 |  | 1998
|                                   
|                                   
|Capital expenditures                |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                   
|                                   
|                                   
|                                   
|                                    | Plastics technologies              |      | $    | 22.1 |  |      | $    | 18.9 |  |   | $    | 29.6 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Metalworking technologies          |      |      | 23.7 |  |      |      | 26.7 |  |   |      | 38.8 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Unallocated corporate              |      |      | 1.2  |  |      |      | 1.7  |  |   |      | 2.4  | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                    |                                    |      | 47.0 |      |  |      | 47.3 |      |  |   | 70.8 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Discontinued machine tools segment |      |      |     |  |      |      |     |  |   |      | 10.6 | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|Total capital expenditures          |                                    | $    | 47.0 |      |  | $    | 47.3 |      |  | $ | 81.4 |     
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                   
|Depreciation and amortization       |                                    |      |      |      |  |      |      |     
|                                   
|                                   
|                                   
|                                   
|                                    | Plastics technologies              |      | $    | 30.8 |  |      | $    | 32.8 |  |   | $    | 26.6 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Metalworking technologies          |      |      | 26.9 |  |      |      | 24.9 |  |   |      | 23.3 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Unallocated corporate              |      |      | .7   |  |      |      | .6   |  |   |      | 1.5  | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                    |                                    |      | 58.4 |      |  |      | 58.3 |      |  |   | 51.4 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Discontinued machine tools segment |      |      |     |  |      |      |     |  |   |      | 6.0  | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|Total depreciation and amortization |                                    | $    | 58.4 |      |  | $    | 58.3 |      |  | $ | 57.4 |     
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                   



|    |                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In 2000, $1.1 million relates to the
        plastics technologies segment and $1.6  million relates to
        the metalworking technologies segment. In 1999,
        $6.7 million relates to the plastics technologies segment
        and $9.5 million relates to the metalworking technologies
        segment.
|   
|(b) | The 2000 amount relates to the metalworking
        technologies segment and the 1999 amount relates to the plastics
        technologies segment.                                                                                                                                                                  
|   
|(c) | Includes financing costs related to the sale of
        accounts receivable.                                                                                                                                                                                                                                        
|   
|(d) | Segment assets consist principally of accounts
        receivable, inventories, goodwill and property, plant and
        equipment which are considered controllable assets for
        management reporting purposes.                                                                                              
|   
|(e) | Consists principally of corporate assets,
        nonconsolidated investments, certain intangible assets, cash
        surrender value of company-owned life insurance, prepaid
        expenses and deferred charges.                                                                                              

41



---



##### Table of Contents



Notes to Consolidated Financial Statements




---

Geographic Information





|                        |                             |                      |         |         |       |      |         |         |       |   |         |       |       | 
|----------------------- | --------------------------- | -------------------- | ------- | ------- | ----- | ---- | ------- | ------- | ----- | - | ------- | ----- | ----- | 
|(In millions)           |                             | 2000                 |         | 1999    |       | 1998
|                       
|                       
|Sales (a)               |                             |                      |         |         |       |      |         |         |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States               |                      | $       | 1,038.8 |       |      | $       | 1,002.9 |       |   | $       | 912.7 |      
|                       
|                       
|                       
|                       
|                        |                             |                      |         |         |       |      |         |         |       |   |         |       |      
|                       
|                       
|                       
|                       
|                        |                             | Germany              |         |         | 217.5 |      |         |         | 234.5 |   |         |       | 235.6 | 
|                       
|                       
|                       
|                       
|                        |                             | Other western Europe |         |         | 176.4 |      |         |         | 252.2 |   |         |       | 252.2 | 
|                       
|                       
|                       
|                       
|                        |                             | Asia                 |         |         | 90.5  |      |         |         | 83.3  |   |         |       | 74.5  | 
|                       
|                       
|                       
|                       
|                        |                             | Other                |         |         | 61.0  |      |         |         | 51.8  |   |         |       | 39.7  | 
|                        |                             |                      |         |         |       |      |         |         |       |   |         |      
|Total sales             |                             | $                    | 1,584.2 |         |       | $    | 1,624.7 |         |       | $ | 1,514.7 |      
|                        |                             |                      |         |         |       |      |         |         |       |   |         |      
|                       
|Noncurrent assets       |                             |                      |         |         |       |      |         |         |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States               |                      | $       | 574.4   |       |      | $       | 579.3   |       |   | $       | 542.3 |      
|                       
|                       
|                       
|                       
|                        | Non-U.S. operations Germany |                      |         | 78.4    |       |      |         | 87.2    |       |   |         | 108.6 |      
|                       
|                       
|                       
|                       
|                        |                             | Other western Europe |         |         | 101.2 |      |         |         | 101.1 |   |         |       | 117.9 | 
|                       
|                       
|                       
|                       
|                        |                             | Asia                 |         |         | 19.2  |      |         |         | 20.3  |   |         |       | 18.4  | 
|                       
|                       
|                       
|                       
|                        |                             | Other                |         |         | 7.4   |      |         |         | 6.2   |   |         |       | 7.5   | 
|                        |                             |                      |         |         |       |      |         |         |       |   |         |      
|Total noncurrent assets |                             | $                    | 780.6   |         |       | $    | 794.1   |         |       | $ | 794.7   |      
|                        |                             |                      |         |         |       |      |         |         |       |   |         |      
|                       



|    |                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------
|(a) | Sales are attributed to specific countries or
        geographic areas based on the origin of the shipment.

Sales of U.S. operations include export sales of
$132.9 million in 2000, $148.4 million in 1999 and
$136.3 million in 1998.

Total sales of the companys U.S. and
non-U.S. operations to unaffiliated customers outside the U.S.
were $612.7 million, $714.7 million and $679.6 million
in 2000, 1999 and 1998, respectively.

42



---



##### Table of Contents



Report of Independent Auditors

Board of Directors

Milacron Inc.


We have audited the accompanying Consolidated
Balance Sheets of Milacron Inc. and subsidiaries as of
December 31, 2000 and 1999, and the related Consolidated
Statements of Earnings, Comprehensive Income and
Shareholders Equity, and Cash Flows for each of the three
years in the period ended December 31, 2000. Our audits also
included the financial statement schedule listed in the Index at
Item 14 (a). These financial statements and schedule are
the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.

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

In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Milacron Inc. and
subsidiaries at December 31, 2000 and 1999, and the
consolidated results of their operations and their cash flows
for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion,
the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set
forth therein.



|                 |                      
|---------------- | ---------------------
|                 | /s/ Ernst & Young LLP
|                
|Cincinnati, Ohio
|February 8, 2001

Supplementary Financial Information



| |                                         
| | ----------------------------------------
| |                                         
| | Operating Results by Quarter (Unaudited)
| |                                         

|                                             |                  |         |       |       |     |       |       |       |     |   |       |      |     |   |       |      |     | 
|-------------------------------------------- | ---------------- | ------- | ----- | ----- | --- | ----- | ----- | ----- | --- | - | ----- | ---- | --- | - | ----- | ---- | --- | 
|                                            
|(In millions, except per-share amounts) 2000
|                                            
|                                             |                  | Qtr 1   |       | Qtr 2 |     | Qtr 3 |       | Qtr 4
|                                            
|                                            
|Sales                                        |                  | $       | 396.9 |       |     | $     | 404.5 |       |     | $ | 394.0 |      |     | $ | 388.8 |     
|                                            
|                                            
|                                            
|                                            
|Manufacturing margins                        |                  |         | 102.9 |       |     |       | 105.4 |       |     |   | 102.0 |      |     |   | 99.8  |     
|                                            
|                                            
|                                            
|                                            
|                                             | Percent of sales |         |       | 25.9  | %   |       |       | 26.1  | %   |   |       | 25.9 | %   |   |       | 25.7 | %  
|                                            
|                                            
|                                            
|                                            
|Net earnings (a)                             |                  |         | 15.1  |       |     |       | 16.7  |       |     |   | 18.5  |      |     |   | 22.0  |     
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |     |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .42 |       |       |       | .47 |   |       |      | .53 |   |       |      | .65 | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .41 |       |       |       | .47 |   |       |      | .53 |   |       |      | .65 | 
|                                            
|                                             |                  | 1999   
|                                            
|                                            
|                                            
|                                            
|                                            
|Sales                                        |                  | $       | 392.0 |       |     | $     | 401.0 |       |     | $ | 393.0 |      |     | $ | 438.7 |     
|                                            
|                                            
|                                            
|                                            
|Manufacturing margins                        |                  |         | 103.6 |       |     |       | 102.3 |       |     |   | 102.5 |      |     |   | 114.7 |     
|                                            
|                                            
|                                            
|                                            
|                                             | Percent of sales |         |       | 26.4  | %   |       |       | 25.5  | %   |   |       | 26.1 | %   |   |       | 26.1 | %  
|                                            
|                                            
|                                            
|                                            
|Net earnings                                 |                  |         | 15.1  |       |     |       | 15.3  |       |     |   | 17.4  |      |     |   | 22.3  | (b) 
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |     |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .40 |       |       |       | .42 |   |       |      | .47 |   |       |      | .61 | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .40 |       |       |       | .41 |   |       |      | .47 |   |       |      | .61 | 
|                                            



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes restructuring costs of $1.2 million
        ($.8 million after tax) in quarter 1, $.3 million
        ($.2 million after tax) in quarter 2, $.6 million
        ($.4 million after tax) in quarter 3, and $.6 million
        ($.5 million after tax) in quarter 4. In quarter 3, also
        includes a gain of $1.5 million ($.8  million after
        tax) on the sale of the companys industrial magnets
        business.
|   
|(b) | Includes a gain of $13.1 million
        ($10.1 million after tax) on the sale of the companys
        European extrusion systems business and restructuring costs of
        $16.2 million ($10.9 million after tax).                                                                                                                                                                                                                   

43



---



##### Table of Contents








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

Not applicable.




PART III






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

The information required by the first part of
Item 10 is (i) incorporated herein by reference to the
Election of Directors section of the companys
proxy statement dated March 23, 2001 and (ii) included
in Part I Executive Officers of the Registrant,
on page 9 of this Form 10-K.

The information required by the second part of
Item 10 is incorporated herein by reference to the
Section 16(a) Beneficial Ownership Reporting
Compliance section of the companys proxy statement
dated March 23, 2001.






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

The following sections of the companys
proxy statement dated March 23, 2001 are incorporated
herein by reference:



| |                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Board of Directors and Board
	Committees  Compensation and Benefits,
	Retirement Benefits, Executive Severance
	Agreements, Personnel and Compensation Committee
	Report on Executive Compensation, Summary
	Compensation Table, Option Grants in Last Fiscal
	Year, Aggregated Option Exercises in Last Year and
	Fiscal Year-End Option Values, and Performance
	Graph.






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

The Principal Holders of Voting
Securities section and the Share Ownership of
Directors and Executive Officers section of the
companys proxy statement dated March 23, 2001 is
incorporated herein by reference.






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

The Certain Transactions and
Stock Loan Programs sections of the companys
proxy statement dated March 23, 2001 is incorporated herein
by reference.




PART IV






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

Item 14(a) (1) & (2)  List
of Financial Statements and Financial Statement
Schedules.

The following consolidated financial statements
of Milacron Inc. and subsidiaries are included in
Item 8:

|                                                                                                |  |      |    | 
|----------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                |  | Page
|                                                                                                |  |     
|Consolidated Statements of Earnings  2000, 1999 and
	1998                                      |  |      | 22 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Balance Sheets  2000 and 1999                                                     |  |      | 23 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Statements of Comprehensive Income and
	Shareholders Equity  2000, 1999 and 1998 |  |      | 24 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Statements of Cash Flows  2000, 1999 and
	1998                                    |  |      | 25 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Notes to Consolidated Financial Statements                                                      |  |      | 26 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Report of Independent Auditors                                                                  |  |      | 43 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Supplementary Financial Information                                                             |  |      | 43 | 

The following consolidated financial statement
schedule of Milacron Inc. and subsidiaries for the years ended
2000, 1999 and 1998 is filed herewith pursuant to
Item 14(d):

|                                                              |  |      |    | 
|------------------------------------------------------------- |  | ---- | -- | 
|                                                              |  | Page
|                                                              |  |     
|Schedule II  Valuation and Qualifying Accounts
	and Reserves |  |      | 47 | 

44



---



##### Table of Contents



All other schedules for which provision is made
in the applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable, and therefore have been
omitted.

Item 14 (a) (3)  List of Exhibits



|   |                                                                                                
|-- | -----------------------------------------------------------------------------------------------
|2. | Plan of Acquisition, Reorganization, Arrangement,
	Liquidation, or Succession  not applicable.
|  
|3. | Articles of Incorporation and By-Laws.                                                         



| |     |                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------
| | 3.1 | Restated Certificate of Incorporation filed with
	the Secretary of State of the State of Delaware on
	November 17, 1998



| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Registration Statement on Form S-8
	(Registration No. 333-70733).



| |     |                    
| | --- | -------------------
| | 3.2 | By-Laws, as amended



| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Registration Statement on Form S-8
	(Registration No. 333-70733).



|   |                                                                            
|-- | ---------------------------------------------------------------------------
|4. | Instruments Defining the Rights of Security
	Holders, Including Indentures:



| |     |                      
| | --- | ---------------------
| | 4.1 | 8 3/8% Notes due 2004



| |   |                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Amendment No. 3 to Form S-4
	Registration Statement dated July 7, 1994 (File No. 
	33-53009).



| |     |                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.2 | Milacron Inc. hereby agrees to furnish to the
	Securities and Exchange Commission, upon its request, the
	instruments with respect to long-term debt for securities
	authorized thereunder which do not exceed 10% of the
	registrants total consolidated assets.

10.  Material Contracts:



| |      |                                       
| | ---- | --------------------------------------
| | 10.1 | Milacron 1991 Long-Term Incentive Plan



| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Proxy Statement dated March  22, 1991.



| |      |                                       
| | ---- | --------------------------------------
| | 10.2 | Milacron 1994 Long-Term Incentive Plan



| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Proxy Statement dated March  24, 1994.



| |      |                                                    
| | ---- | ---------------------------------------------------
| | 10.3 | Milacron 1997 Long-Term Incentive Plan, as
	amended



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-Q for the quarter ended June 30, 2000.



| |      |                                                    
| | ---- | ---------------------------------------------------
| | 10.4 | Milacron 1996 Short-Term Management Incentive
	Plan



| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Form 10-K for the Fiscal year ended
	December 28, 1996.



| |      |                                                
| | ---- | -----------------------------------------------
| | 10.5 | Milacron Supplemental Pension Plan, as
	amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |      |                                                   
| | ---- | --------------------------------------------------
| | 10.6 | Milacron Supplemental Retirement Plan, as
	amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |      |                                                                            
| | ---- | ---------------------------------------------------------------------------
| | 10.7 | Milacron Inc. Plan for the Deferral of
	Directors Compensation, as amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the fiscal year ended December 31,
	1998.



| |      |                                                                      
| | ---- | ---------------------------------------------------------------------
| | 10.8 | Milacron Inc. Retirement Plan for Non-Employee
	Directors, as amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the fiscal year ended December 31,
	1998.



| |      |                                                             
| | ---- | ------------------------------------------------------------
| | 10.9 | Milacron Supplemental Executive Retirement Plan,
	as amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                                                                                                                                                                                                           
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.10 | Amended and Restated Revolving Credit Agreement
	dated as of November 30, 1998 among Milacron Inc.,
	Cincinnati Milacron Kunststoffmaschinen Europe GmbH, the lenders
	listed therein and Bankers Trust Company, as agent.



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the fiscal year ended December 31,
	1998.



| |       |                                                 
| | ----- | ------------------------------------------------
| | 10.11 | Milacron Compensation Deferral Plan, as
	amended



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                                                                                                                      
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------
| | 10.12 | Rights Agreement dated as of February 5,
	1999, between Milacron Inc. and Chase Mellon Shareholder
	Services, L.L.C., as Rights Agent

45



---



##### Table of Contents





| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Registration Statement on Form 8-A (File
	No. 001-08485).



| |       |                                                                                                                                                                     
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.13 | Purchase and Sale Agreement between UNOVA, Inc.,
	UNOVA Industrial Automation Systems, Inc., UNOVA U.K. Limited
	and Cincinnati Milacron Inc. dated August 20, 1998.



| |   |                                                                                     
| | - | ------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Form 8-K dated December 30, 1995.



| |       |                                                                                                                                         
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------
| | 10.14 | Purchase and Sale Agreement between Johnson
	Controls, Inc., Hoover Universal, Inc. and Cincinnati Milacron
	Inc., dated August 3, 1998.



| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | Incorporated herein by reference to the
	companys Form 8-K dated September 30,
	1998.



| |       |                                                                                                                                                                                                                                                                                   
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.15 | Amendment Number One dated as of March 31,
	1999 to the Amended and Restated Revolving Credit Agreement
	dated as of November 30, 1998 among Milacron Inc.,
	Cincinnati Milacron Kunststoffmaschinen Europe GmbH, the lenders
	listed therein and Bankers Trust Company, as agent.



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                               
| | ----- | ----------------------------------------------
| | 10.16 | Milacron Supplemental Executive Pension
	Plan.



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                                                                                               
| | ----- | --------------------------------------------------------------------------------------------------------------
| | 10.17 | Milacron Compensation Deferral Plan Trust
	Agreement by and between Milacron Inc. and Reliance Trust
	Company.



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                                                                                                 
| | ----- | ----------------------------------------------------------------------------------------------------------------
| | 10.18 | Milacron Supplemental Retirement Plan Trust
	Agreement by and between Milacron Inc. and Reliance Trust
	Company.



| |   |                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-K for the Fiscal year ended December 31,
	1999.



| |       |                                                                                                                                                                                                                                                                                                                 
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.19 | Amendment Number Two dated as of January 31,
	2000 to the Amended and Restated Revolving Credit Agreement
	dated as of November 30, 1998 among Milacron Inc.,
	Cincinnati Grundstucksverwaltung GmbH, Milacron
	Kunststoffmaschinen Europe GmbH, the lenders listed therein and
	Bankers Trust Company as Agent.



| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-Q for the quarter ended March 31, 2000.



| |       |                                                                                                                                                                                                                                                                                                                                         
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.20 | Amendment Number Three dated as of July 13,
	2000 to the Amended and Restated Revolving Credit Agreement
	dated as of November 30, 1998 among Milacron Inc., Milacron
	Kunststoffmaschinen Europe GmbH, Milacron Metalworking
	Technologies Holding GmbH, Milacron B.V., the lenders listed
	therein and Bankers Trust Company as Agent.



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Incorporated by reference to the companys
	Form 10-Q for the quarter ended June 30, 2000.

11.  Statement Regarding Computation of
Per-Share Earnings

12.  Statement Regarding Computation of
Ratios  not applicable

13.  Annual report to security holders,
Form 10-Q or quarterly report to security
holders  not applicable

16.  Letter regarding Change in
Certifying Accountant  not applicable

18.  Letter regarding Change in
Accounting Principles  not applicable

21.  Subsidiaries of the
Registrant



|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|22. | Published Report Regarding Matters Submitted to
	Vote of Security Holders  none

23.  Consent of Experts and
Counsel

24.  Power of Attorney  not
applicable

99.  Additional Exhibits  not
applicable

Item 14(b)  Reports on Form 8-K



| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A Current Report on Form 8-K, Items 5,7 and
	9, dated October 31, 2000, was filed regarding the release
	of the companys third quarter 2000 earnings
	information.

Item 14 (c) & (d)  Index to Certain
Exhibits and Financial Statement Schedules

The responses to these portions of Item 14
are submitted as a separate section of this report.

46



---



##### Table of Contents



Milacron Inc. and Subsidiaries










|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |         | 
|--------------- | ---------------------------------------- | ---------- |  | ---------- |  | ---------- |  | ---------- |  | --------- | ----- | ------ | --- |  | ----- | ------- | --- |  |  | ------- | 
|                |                                          |            |  |            |  |            |  |           
|Col. A          |                                          | Col. B     |  | Col. C     |  | Col. D     |  | Col. E    
|               
|               
|                |                                          |            |  |           
|                |                                          | Additions  |  |           
|                |                                          |            |  |           
|                |                                          | Balance at |  | Charged to |  |            |  |            |  | Balance  
|                |                                          | Beginning  |  | Cost and   |  | Other      |  | Deductions |  | at End   
|Description     |                                          | of Period  |  | Expenses   |  |  Describe |  |  Describe |  | of Period
|               
|               
|Year ended 2000 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $12,103    |  |            |  | $ 4,459    |  |           |       | $     |     |  |       | $2,981  | (b) |  |  | $12,875 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 490   | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 216   | (d)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and consolidation reserves |            |  | $17,836    |  |            |  | $         |  |           |       | $     |     |  |       | $13,955 | (b) |  |  | $ 2,570 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 1,029 | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 282   | (e)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $37,645    |  |            |  | $ 6,263    |  |           |       | $     |     |  |       | $ 5,306 | (b) |  |  | $36,235 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 2,177 | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 190   | (d)     |     |  |  |        
|               
|Year ended 1999 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $12,083    |  |            |  | $ 5,021    |  |           |       | $   46 | (a) |  |       | $ 2,618 | (b) |  |  | $12,103 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 534   | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 1,895 | (d)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and consolidation reserves |            |  | $   521    |  |            |  | $14,137    |  |           |       | $5,722 | (a) |  |       | $ 1,852 | (b) |  |  | $17,836 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 692   | (c)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $37,350    |  |            |  | $ 9,920    |  |           |       | $ 271  | (a) |  |       | $ 6,791 | (b) |  |  | $37,645 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 2,512 | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 593   | (d)     |     |  |  |        
|               
|Year ended 1998 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $13,004    |  |            |  | $ 5,757    |  |           |       | $1,341 | (a) |  |       | $4,639  | (b) |  |  | $12,083 | 
|                |                                          |            |  |            |  |            |  |            |  |           | 199   | (c)    |     |  | 3,579 | (d)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and integration reserves   |            |  | $   933    |  |            |  | $         |  |           |       | $     |     |  |       | $   412 | (b) |  |  | $   521 | 
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $41,657    |  |            |  | $10,074    |  |           |       | $1,093 | (a) |  |       | $10,137 | (b) |  |  | $37,350 | 
|                |                                          |            |  |            |  |            |  |            |  |           | 1,771 | (c)    |     |  | 7,108 | (d)     |     |  |  |        
|               

|    |                                                                     
|--- | --------------------------------------------------------------------
|(a) | Consists of reserves of subsidiaries purchased
	during the year.    
|(b) | Represents amounts charged against the reserves
	during the year.   
|(c) | Represents foreign currency translation
	adjustment during the year.
|(d) | Consists of reserves of business sold during the
	year.             
|(e) | Represents reversals of excess reserves.                            

47



---



##### Table of Contents






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.



| |              
| | -------------
| | Milacron Inc.



| |     |                    
| | --- | -------------------
| | By: | /s/ Daniel J. Meyer

| |                                      
| | -------------------------------------
| |                                      
| | Daniel J. Meyer; Chairman            
| | and Chief Executive Officer, Director
| | (Chief Executive Officer)            



| |     |                    
| | --- | -------------------
| | By: | /s/ Ronald D. Brown

| |                                      
| | -------------------------------------
| |                                      
| | Ronald D. Brown; President           
| | and Chief Operating Officer, Director
| | (Chief Operating Officer)            



| |     |                       
| | --- | ----------------------
| | By: | /s/ Robert P. Lienesch

| |                                      
| | -------------------------------------
| |                                      
| | Robert P. Lienesch; Vice
	President 
| | Finance, and Chief                   
| | Financial Officer                    
| | (Chief Financial Officer)            



| |     |                      
| | --- | ---------------------
| | By: | /s/ Jerome L. Fedders

| |                              
| | -----------------------------
| |                              
| | Jerome L. Fedders; Controller
| | (Chief Accounting Officer)   

Date: March 21, 2001

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

|                                                                   |  |                                                                                                                                                
|------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|/s/ Harry A. HammerlyHarry A. Hammerly; March 21, 2001
	(Director) |  | /s/ Darryl F. Allen
	-----------------------------------------------------------
	Darryl F. Allen; March 21, 2001
	(Director)                  
|/s/ David L. BurnerDavid L. Burner; March 21, 2001
	(Director)     |  | /s/ Barbara Hackman Franklin
	-----------------------------------------------------------
	Barbara Hackman Franklin; March 21, 2001
	(Director)

48



---



##### Table of Contents






Item 14 (c) and (d)  Index to Certain
Exhibits and Financial Statement Schedules

|           |  |                                   |  |                 
|---------- |  | --------------------------------- |  | ----------------
|           |  |                                   |  | Page            
|           |  |                                   |  |                 
|Exhibit 11 |  | Computation of Per-Share Earnings |  | Bound Separately
|Exhibit 21 |  | Subsidiaries of the Registrant    |  | Bound Separately
|Exhibit 23 |  | Consent of Experts and Counsel    |  | Bound Separately

49