##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-K
   þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    From          to   Commission File Number: 1-8485
  MILACRON INC.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

31-1062125(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification No.)2090 Florence Avenue
    Cincinnati, Ohio

45206(Address of principal executive
    offices)

(Zip Code)   (513) 487-5000
    (Registrants telephone number, including area code)
  None (Former name, former address
    and former fiscal year, if changed since last report)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each class

Name of each exchange on which registeredCommon Stock, $.01 par value
    per share

[New York Stock Exchange, Inc.]   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      Class

Outstanding at February 28, 2007Common Stock, $.01 par value
    per share

52,562,945 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
  Document

Parts Into Which IncorporatedProxy Statement for the Annual
    Meeting of Shareholders to be held May 2, 2007

Part III




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##### 



MILACRON
    INC.
    2006
    FORM 10-K
    TABLE OF CONTENTS
  
  PagePART
    IItem 1.


Business


2Executive Officers
    of the Registrant


9Item 1A.


Risk
    Factors


11Item 1B.


Unresolved Staff
    Comments


21Item 2.


Properties


21Item 3.


Legal
    Proceedings


21Item 4.


Submission of
    Matters to a Vote of Security Holders


21PART
    IIItem 5.


Market for the
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


21Item 6.


Selected Financial
    Data


24Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


25Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


48Item 8.


Financial
    Statements and Supplementary Data


48Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


111Item 9A.


Controls and
    Procedures


111Item 9B.


Other
    Information


113PART
    IIIItem 10.


Directors,
    Executive Officers and Corporate Governance


113Item 11.


Executive
    Compensation


114Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


114Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


114Item 14.


Principal
    Accountant Fees and Services


115PART
    IVItem 15.


Exhibits and
    Financial Statement Schedules


115Index to Certain
    Exhibits and Financial Statement Schedules


121Schedule
    II  Valuation and Qualifying Accounts and
    Reserves


122Signatures


123EX-10.21EX-10.24EX-10.25EX-10.26EX-10.37EX-11EX-21EX-23EX-31.1EX-31.2EX-32   1




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##### Table of Contents



PART I  Item 1.
    Business  General
    
    Machinery technologies  North America
    Machinery technologies  Europe
    Mold technologies
    Industrial fluids  state-of-the-art
      History
    Recent
    Events
  12-month
   2




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Website
  Form 10-K Form 10-Q 8-K
  Manufacturing
    Efficiency and Cost Structure
      and/or
      Refinancing
   3




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1 2
  Product
    Research and Development
    Patents
    Employees
    Segment
    Information
  Form 10-K.
  Plastics
    Technologies
  Products and Services.
  Machinery
    technologies  North America
  
    Injection molding systems, parts and services supplied from
    North America, India and China
    Blow molding systems, parts, molds and services supplied from
    North America
    Extrusion systems, parts and services supplied from North America  Machinery
    technologies  Europe
  
    Injection molding systems, parts and services supplied from
    Europe
    Blow molding systems, parts, molds and services supplied from
    Europe  Mold
    technologies
  
    Injection mold bases, related components/tooling and services
    worldwide
    MRO  maintenance, repair and operating supplies
    worldwide  end-to-end
 4




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state-of-the-art
    day-to-day
  24/7 next-day
  Markets.
  strength-to-weight
   5




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Geographic Sales.
  Distribution. and/or
    Customers.
 6




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Production Facilities.
  Facility Location

ProductsAhmedabad, India*

Injection molding machinesBatavia, Ohio*

Injection molding machinesBlow molding machinesExtrusion systemsFulda, Germany

Mold basesGreenville, Michigan*

Mold basesJiangyin, China*

Injection molding machinesLewistown, Pennsylvania

Mold componentsMadison Heights, Michigan

Hot runner systemsMagenta, Italy*

Blow molding machinesMalterdingen, Germany

Injection molding machinesMcPherson, Kansas*

Extrusion screws and barrelsMechelen, Belgium*

Mold componentsMelrose Park, Illinois

Mold basesMississauga, Canada*

Extrusion screwsMt. Orab, Ohio

Plastics machinery partsPolicka, Czech Republic*

Blow molding machinesTecumseh, Michigan*

Molds for blow moldingWindsor, Canada

Mold basesYoungwood, Pennsylvania

Mold bases and components     *
    
    Leased    1 2
  Competition.
  Industrial
    Fluids
  Products and Services.
   7




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Markets.
  one-third
    Geographic Sales.
  Distribution.
  Customers.
   8




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Production Facilities.
  Facility Location

ProductsCincinnati, Ohio

Metalworking fluidsLivonia, Michigan

Process cleaners, corrosion
    inhibitors, specialty productsSturgis, Michigan

Metalforming fluidsUlsan, South Korea

Metalworking fluidsVlaardingen, The Netherlands

Metalworking fluids     1 2
  Competition.
 Executive
    Officers of the Registrant    Positions Held DuringName and Age

Position

Last Five YearsRonald D. Brown
    (53)

Chairman, President and Chief
    Executive Officer

Elected Chairman, President and
    Chief Executive Officer in 2001. Elected President and Chief
    Operating Officer in 1999. Has served as a Director since 1999.Ross A. Anderson
    (50)

Senior Vice President 
    Finance and Chief Financial Officer

Elected Senior Vice
    President  Finance and Chief Financial Officer in
    2006. Prior thereto was Vice President  Finance and
    CFO since 2005, and was Vice President and General Manager for
    North American Plastics Injection Machinery from 2004 to 2005,
    Corporate Controller from 2002 to 2004 and Group Controller of
    Plastics Machinery Technologies Group from 1998 to 2002.Hugh C. ODonnell
    (55)

Senior Vice President, General
    Counsel and Secretary

Elected Senior Vice President in
    2004 and elected Vice President, General Counsel and Secretary
    in 1999. 9




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Positions Held DuringName and Age

Position

Last Five YearsRobert K. Simpson
    (46)

President  Global
    Plastics Machinery

Elected President 
    Global Plastics Machinery in 2006. Prior thereto was President,
    Siegel Robert Automotive 2005 to 2006, Executive Vice
    President  Global Operations, Textron Fastening
    Systems 2003 to 2005 and President  North
    America  Kautex Textron, Textron Automotive Company
    1999 to 2003.Dr. Karlheinz Bourdon(a)
    (49)

President  Global
    Injection Molding

Appointed Vice
    President  Global Injection Molding in 2006. Prior
    thereto was President of Global Plastics Machinery business from
    2004 to 2006, General Manager, Plastics Machinery Technologies
    Group from 2003 to 2004, Senior Managing Director, Plastics
    Machinery Europe from 2001 to 2003, and Managing Director,
    Ferromatik Milacron from 1999 to 2001.David E. Lawrence
    (56)

President  Global Mold
    Technologies

Elected President of Global Mold
    Technologies business in 2004. Prior thereto was General
    Manager, Global Mold Technologies from 2003 to 2004 and General
    Manager, North America of D-M-E, a Milacron subsidiary, from
    1999 to 2003.Robert C. McKee
    (55)

President  Global
    Industrial Fluids

Elected President of Global
    Industrial Fluids business in 2004. Prior thereto was General
    Manager, Global Industrial Fluids from 2002 and General Manager,
    Consumable Products Division from 2000 to 2002.M. Bradley Baker
    (41)

Vice President  Human
    Resources

Elected Vice President of Human
    Resources in 2004. Prior thereto was Director, Global Human
    Resources from 2002 to 2004 and Group Director, Human
    Resources  Plastics Technologies from 1999 to 2002.John C. Francy
    (42)

Vice President and Treasurer

Elected Vice President in 2004 and
    Treasurer in 2001. Prior thereto was Assistant Treasurer from
    1998. 10




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Positions Held DuringName and Age

Position

Last Five YearsDanny L. Gamez
    (44)

Controller

Elected Controller in 2005. Prior
    thereto was employed by subsidiaries of SPX Corporation from
    2001 to 2005, most recently as Chief Financial Officer of SPX
    Cooling Technologies GmbH, and by Donnelly Hohe GmbH as Group
    Controller and Finance Director from 1998 to 2001.               Item 1A.
    Risk
    Factors  Risks
    Relating to Our Liquidity and Our Indebtedness
  If our
    cash flow available to service our debt does not continue to
    improve, we may not be able to service our debt with cash from
    operating activities, which may cause us to default on our debt
    instruments.
      1 2
 11




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Form 10-K
  Our
    liquidity depends on the availability of borrowings under our
    asset based facility, which is subject to the discretion of the
    administrative agent thereunder.
    Our
    substantial level of indebtedness may adversely affect our
    financial condition, limit our ability to grow and compete and
    prevent us from fulfilling our obligations under our
    indebtedness.
  non-U.S. subsidiaries
    
    require us to dedicate a substantial portion or even all of our
    cash flow from operations to payments on our indebtedness,
    thereby reducing the availability of our cash flow to fund
    working capital, capital expenditures, research and development
    efforts and other general corporate purposes;
    increase the amount of interest expense that we have to pay
    because some of our borrowings are at variable rates of
    interest, which, if increased, will result in higher interest
    payments;
    increase our vulnerability to existing and future adverse
    economic and industry conditions; 12




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
    limit our flexibility in planning for, or reacting to, changes
    in our business and the industries in which we operate;
    make it more difficult for us to satisfy our obligations with
    respect to our indebtedness;
    place us at a competitive disadvantage compared to our
    competitors that have less indebtedness;
    limit, along with the financial and other restrictive covenants
    in our indebtedness, among other things, our ability to borrow
    additional funds, dispose of assets or pay cash
    dividends; and
    restrict us from making strategic acquisitions, introducing new
    technologies or exploiting business opportunities.    Despite
    current indebtedness levels, we and our subsidiaries may still
    be able to incur substantially more debt. This could further
    exacerbate the risks associated with our substantial
    leverage.
    Restrictions
    and covenants in debt agreements limit our ability to take
    certain actions.
  1 2
  
    borrow money;
    use assets as security in other borrowings or transactions;
    pay dividends on capital stock or purchase capital stock;
    sell assets;
    enter into certain transactions with affiliates; and
    make certain investments or acquisitions.     13




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1 2 1 2 1 2
    Our
    principal U.S. pension plan is underfunded, which we expect
    will require us to make cash contributions to the plan, which,
    in turn, will reduce the cash available for our business, and
    adverse equity market or interest rate conditions may increase
    our pension liability.
     14




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An
    ownership change for U.S. federal income tax
    purposes will cause utilization of our prechange tax loss
    carryforwards and other tax attributes to be substantially
    delayed, which would increase income tax expense and decrease
    available cash in future years.
    Risks
    Relating to Our Business
  If we
    fail to continue to comply with the requirements of
    Section 404 of the Sarbanes-Oxley Act of 2002 or to remedy
    any material weaknesses in our internal controls that we may
    identify in the future, such failure could result in material
    misstatements in our financial statements, cause investors to
    lose confidence in our reported financial information and have a
    negative effect on the trading price of our common
    stock.
       15




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Sarbanes-Oxley
  Many
    of our customers are in cyclical industries that have
    historically experienced significant downturns, which has
    resulted in substantially reduced demand for our
    products.
      If a
    large portion of our North American and Western European
    customers continue to outsource their manufacturing activities
    to areas where we do not currently have manufacturing
    operations, we may encounter difficulties keeping these
    customers.
   16




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We
    operate in highly competitive industries, many of which are
    currently subject to intense price competition, and if we are
    unable to compete successfully our results of operations could
    fail to improve or could deteriorate.
    Further
    increases in our cost structure could have an adverse effect on
    our operating results and cash flows.
    Our
    significant international operations subject us to risks such as
    unfavorable political, regulatory, labor and tax
    conditions.
    
    supply imports into the United States may be delayed as the
    U.S. Department of Homeland Security enhances controls at
    U.S. borders and ports of entry;
    agreements may be difficult to enforce and receivables difficult
    to collect through a foreign countrys legal system;
    foreign countries may impose additional withholding taxes or
    otherwise tax our foreign income, impose tariffs or adopt other
    restrictions on foreign trade or investment, including currency
    exchange controls;
    general economic and political conditions in the countries in
    which we operate could have an adverse effect on our earnings
    from operations in those countries;
    fluctuations in exchange rates may affect product demand and may
    adversely affect the profitability in U.S. dollars of
    products and services provided by us in foreign markets where
    payment for our products and services is made in the local
    currency;
    unexpected adverse changes in foreign laws or regulatory
    requirements may occur; and
    compliance with a variety of foreign laws and regulations may be
    difficult.   17




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Our
    operations are conducted worldwide and our results of operations
    are subject to currency translation risk and currency
    transaction risk that could adversely affect our financial
    condition and results of operations.
      Our
    operations depend to a great extent on the economy of the
    European and Asian markets. These economies may not be as stable
    as that of the U.S.
      We may
    be unable to respond in an effective and timely manner to
    technological changes in our industry and could lose customers
    as a result.
    We may
    not be able to adequately protect our intellectual property and
    proprietary rights, which could harm our future success and
    competitive position.
   18




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
    any of our patents will not be invalidated, circumvented or
    licensed to others;
    any of our pending or future patent applications will be issued
    within the scope of the claims sought by us, if at all;
    others will not develop technologies that are similar or
    superior to our technologies, duplicate our technologies or
    design around our patents; or
    steps taken by us to protect our technologies will prevent
    misappropriation of such technologies.    We are
    subject to litigation that could have an adverse effect upon our
    business, financial condition, results of operations or
    reputation.
  and/or
  Our
    operations may subject us to potential responsibilities and
    costs under environmental laws that could have an adverse effect
    on our business, financial condition and results of
    operations.
  clean-up clean-up clean-up
 19




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##### Table of Contents



A
    significant softening of the U.S. economy could require us
    to change our assumptions regarding our deferred tax assets,
    which could materially increase our income tax expense and
    adversely affect our results of operations.
  non-U.S. net non-U.S. assets
    We are
    in the process of implementing a new Enterprise Resource
    Planning (ERP) system that will ultimately be used by most of
    our major plastics technologies businesses in North America and
    Europe.
    If we
    are unable to retain key employees, our performance may be
    hindered.
    The
    interests of our principal shareholders may conflict with those
    of other shareholders.
    If our
    common stock is delisted, it may lack a market.
   20




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##### Table of Contents



one-for-ten
  If a
    significant portion of our Series B Preferred Stock shareholders
    would convert their holdings to common stock and attempt to
    sell, the value of our shares could be negatively
    impacted.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Form 10-K.
  Item 3.
    Legal
    Proceedings  and/or
  Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities   21




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1 2 Form 10-K)
  Common
    Stock Price Range
  High


Low2005, quarter endedMarch 31

$
3.50


$
2.40June 30


3.09



1.88September 30


2.30



1.65December 31


1.90



1.082006, quarter endedMarch 31

$
1.76


$
1.26June 30


1.64



1.00September 30


1.15



.83December 31


1.05



.62  22




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PERFORMANCE
    GRAPH
   5-Year 1
  
    1
    (a)


(b)


(c)


(d)Maximum NumberTotal Number


(or Approximateof Shares


Dollar Value) of(or Units)


Shares (or Units)Total Number


Average Price


Purchased as


that May Yet Beof Shares


Paid per


Part of Publicly


Purchased Under(or Units)


Share


Announced Plans


the Plans orPeriod

Purchased


(or Unit)


or Programs(1)


Programs(1)October 1 
    October 31, 2006














November 1 
    November 30, 2006














December 1 
    December 31, 2006














Total














     (1)
    
    As of December 31, 2006, there were no publicly announced
    plans or programs to repurchase stock.   23




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Item 6.Selected
    Financial Data  2006


2005


2004


2003


2002(Dollars in millions, except per-share amounts)Summary of
    OperationsSales

$
820.1


$
808.9


$
774.2


$
739.7


$
693.2Loss from continuing operations
    before cumulative effect of change in method of accounting(a)


(39.8
)(b)


(16.5
)(b)


(51.3
)(b)


(183.7
)(b)


(18.7
)(b)Per common share(c)Basic


(1.02
)(d)


(.47
)


(1.72
)(d)


(5.02
)


(.52
)Diluted


(1.02
)(d)(e)


(.47
)(e)


(1.72
)(d)(e)


(5.02
)(e)


(.52
)(e)Earnings (loss) from discontinued
    operations


.1
(f)


2.5
(f)


(.5
)(f)


(7.2
)(f)


(16.8
)(f)Per common share(c)Basic






.05



(.01
)


(.19
)


(.46
)Diluted






.05
(e)


(.01
)(e)


(.19
)(e)


(.46
)(e)Cumulative effect of change in
    method of accounting


















(187.7
)(g)Per common share(c)Basic


















(5.15
)Diluted


















(5.15
)(e)Net loss(a)


(39.7
)


(14.0
)


(51.8
)


(190.9
)


(223.2
)Per common share(c)Basic


(1.02
)(d)


(.42
)


(1.73
)(d)


(5.21
)


(6.13
)Diluted


(1.02
)(d)(e)


(.42
)(e)


(1.73
)(d)(e)


(5.21
)(e)


(6.13
)(e)Financial Position at Year
    EndWorking capital of continuing
    operations


153.1



186.8



193.4



22.2



166.9Property, plant and
    equipment-net


114.3



114.2



128.4



140.8



149.8Total assets


650.5



671.6



737.9



733.4



947.3Long-term debt


232.8



233.3



235.9



163.5



255.4Total debt


260.5



240.0



253.1



323.4



301.5Net debt (total debt less cash and
    cash equivalents)


222.0



194.3



183.9



230.6



179.2Shareholders equity (deficit)


(21.3
)


(5.1
)


50.4



(23.6
)


143.5Per common share


(2.75
)


(2.49
)


(1.42
)


(.85
)


4.07Other DataDividends paid to common
    shareholders














.7



1.4Per common share














.02



.04Capital expenditures


13.8



12.7



8.8



6.5



6.2Depreciation and amortization


16.8



18.4



20.3



21.7



23.0Backlog of unfilled orders at
    year-end


105.7



92.7



87.3



92.0



76.4Employees (average)


3,506



3,516



3,490



3,760



4,090     (a)
    
    In 2004, the company elected to change its method of accounting
    for certain U.S. plastics machinery inventories from the
    last-in,
    first-out (LIFO) method to the
    first-in,
    first-out (FIFO) method, retroactive to the beginning of the
    year. Upon adoption of the FIFO method, all amounts for the
    years 2002 and 2003 were adjusted to conform to the new
    presentation.(b)
    
    Includes restructuring costs of $17.4 million (with no tax
    benefit) in 2006, $1.6 million ($1.5 million after
    tax) in 2005, $13.0 million (with no tax benefit) in 2004,
    $27.1 million ($25.5 million after tax) in 2003 and 24




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$13.9 million ($8.8 million after tax) in 2002. In
    2006, includes refinancing costs of $1.8 million (with no
    tax benefit) and in 2004 and 2003, includes refinancing costs of
    $21.4 million and $1.8 million, respectively, in both
    cases with no tax benefit. In 2003 and 2002, includes goodwill
    impairment charges of $65.6 million and $1.0 million,
    respectively, in both cases with no tax benefit.(c)
    
    The numbers of shares used to compute earnings (loss) per common
    share data for years prior to 2004 include the effect of a
    bonus element inherent in a rights offering that was
    completed in the fourth quarter of 2004. Under the terms of the
    offering, holders of common shares were permitted to acquire
    additional shares at a price of $2.00 per share compared to
    a weighted-average market price on the closing dates of
    $2.91 per share. The effect of the bonus element was to
    increase the numbers of shares used to calculate basic and
    diluted earnings (loss) per common share in 2003 and 2002 by a
    factor of 1.0891.(d)
    
    In 2004, loss from continuing operations per common share and
    net loss per common share include the effect of a beneficial
    conversion feature that is included in the Series B
    Preferred Stock that was issued in June 2004. In addition to
    dividends on all preferred stock, the $15.9 million value
    of the beneficial conversion feature was added to the applicable
    loss amounts for 2004 in calculating the respective loss per
    common share amounts. During 2005, the value of the beneficial
    conversion feature was increased to $33.1 million as a
    result of an increase in the number of shares into which the
    Series B Preferred Stock is convertible. The
    $17.2 million increase is being amortized beginning in 2006
    through the mandatory conversion date in the second quarter of
    2011. As a result, $3.2 million has been added to the
    applicable loss amounts in addition to preferred stock dividends
    in calculating the related loss per common share amounts for
    2006.(e)
    
    For all years presented, diluted earnings per common share is
    equal to basic earnings per common share because the inclusion
    of potentially dilutive securities would result in a smaller
    loss per common share.(f)
    
    In 2006, 2005, 2004 and 2003, includes income of
    $.1 million, income of $2.5 million, income of
    $.8 million and expense of $.8 million, respectively,
    related to adjustments of previously recorded gains and losses
    on divestitures of discontinued operations. In 2002, includes a
    net gain of $8.4 million on the divestitures of the
    Valenite and Widia and Werkö metalcutting tools businesses,
    the planned divestiture of the round metalcutting tools and
    grinding wheels businesses and adjustments of reserves related
    to the 1998 sale of the machine tools segment.(g)
    
    Represents a goodwill impairment charge related to the adoption
    of a new accounting standard.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Executive
    Summary
  Company
    Overview
  end-to-end
     25




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Plastics
    Markets  Background and Recent History
      12-month
      Industrial
    Fluids  Recent History
  2000-2003,
 26




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Consolidated
    2006 Results
    Opportunities
    and Challenges
    Presence
    Outside the U.S.
        Significant
    Accounting Policies and Judgments
  Form 10-K)
  Deferred
    Tax Assets and Valuation Allowances
  non-U.S. net non-U.S. assets
 27




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non-U.S. net non-U.S. jurisdictions 
         28




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Accounts
    Receivable, Inventory and Warranty Reserves
         29




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percentage-of-sales
  Impairment
    of Goodwill and Long-Lived Assets
    non-U.S. countries
     30




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Self-Insurance
    Reserves
      Pensions
  non-U.S. employees.
   31




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year-to-year rate-of-return
        Results
    of Operations
   32




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Basis
    of Presentation
    Discontinued
    Operations
    Pension
    Expense and Pension Funding
      2006
    Compared to 2005
  New
    Orders and Sales
    non-U.S. markets
   33




---



##### Table of Contents



Margins,
    Costs and Expenses
        Refinancing
    Costs
    Restructuring
    Costs
  Form 10-K.
 34




---



##### Table of Contents



Restructuring
    Actions
  Restructuring Costs


Cash CostsYear Initiated

2006


2005


2004


2006


2005


2004(In millions)Machinery
    technologies  North AmericaU.S. plastics headcount
    reductions

2006

$
1.5


$



$



$



$



$
Injection molding and blow molding
    employment reductions

2003 & 2004

$
.1


$
.4


$
2.6


$
.1


$
.7


$
1.7Blow molding machinery and mold
    making relocations

2002


.6



.9



5.5



(1.6
)


.4



.6Other 2001 actions

2001










(.1
)










2.2



1.3



8.0



(1.5
)


1.1



2.3Machinery
    technologies  EuropeReorganization of Germany
    injection molding machinery facility

2006

$
6.5


$



$



$
5.2


$



$
Consolidation of European sales
    offices

2005


1.8



.2







1.7



(.2
)


Blow molding product line
    rationalization and employment reductions

2003










.2







.1



.9Injection molding sales office and
    employment reductions

2003






















1.48.3



.2



.2



6.9



(.1
)


2.3Mold technologiesReorganization of North American
    operations

2006

$
1.6


$



$



$
.2


$



$
Further downsize Fulda plant

2006


1.8











1.3







Consolidation of European
    operations

2005


1.8



.1







.3







Downsize Fulda plant

2004


(.1
)


.1



2.1







.4



.6Mahlberg plant closure

2003






(.1
)


1.3







(1.1
)


North American employment
    reductions

2003






















.3European sales reorganization

2003 & 2004


.3







1.1



.4



.6



2.4EOC and Reform integration

2001






(.2
)


.3



.2



(.5
)


.25.4



(.1
)


4.8



2.4



(.6
)


3.5Industrial fluids and
    corporateLiquidation of Japan sales office
    (corporate expenses)

2006

$
1.3


$



$



$



$



$
Germany and U.K. fluids blending
    plant closures

2005


.2



.2







.1







Early retirement program and
    general overhead reductions

2003






















.1Early retirement program and
    general overhead reductions

2001 & 2002






















.11.5



.2







.1







.2$
17.4


$
1.6


$
13.0


$
7.9


$
.4


$
8.3  35




---



##### Table of Contents



Results
    By Segment
  Machinery technologies  North
    America
  Machinery technologies  Europe
  Mold technologies
  Industrial Fluids
  Loss
    From Continuing Operations Before Income Taxes
   36




---



##### Table of Contents



Income
    Taxes
  non-U.S. operations non-U.S. operations
  non-U.S. operations non-U.S. operations.
  Loss
    From Continuing Operations
    Discontinued
    Operations
    Net
    Loss
    2005
    Compared to 2004
  New
    Orders and Sales
    U.S.-built
 37




---



##### Table of Contents



non-U.S. markets
    Margins,
    Costs and Expenses
      expense-net
    Refinancing
    Costs
  5 8
 38




---



##### Table of Contents



Restructuring
    Costs
                Results
    By Segment
  Machinery technologies  North
    America
 39




---



##### Table of Contents



Machinery technologies  Europe
  Mold technologies
  Industrial Fluids
  Loss
    From Continuing Operations Before Income Taxes
    Income
    Taxes
  non-U.S. operations non-U.S. operations.
 40




---



##### Table of Contents



non-U.S. jurisdictions non-U.S. operations 
  Loss
    From Continuing Operations
    Discontinued
    Operations
      Net
    Loss
    Market
    Risk
  Foreign
    Currency Exchange Rate Risk
    Interest
    Rate Risk
  1 2 1 2
 41




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Sales
    of Accounts Receivable
  non-U.S. subsidiaries
    Sales
    of Notes and Guarantees
  non-U.S. subsidiaries,
 42




---



##### Table of Contents



Contractual
    Obligations
    2008 -


2010 -


BeyondTotal


2007


2009


2011


2011(In millions)Contractual
    ObligationsAsset-based facility due 2011

$
23.2


$
23.2


$



$



$
111/2% Senior
    Secured Notes due 2011


225.0











225.0



Interest on
    111/2% Senior
    Secured Notes due 2011


117.3



25.9



51.8



39.6



Other long-term debt


1.5



.7



.6



.2



Capital lease obligations


12.3



1.5



3.3



3.7



3.8Operating leases


27.2



12.0



11.9



1.9



1.4Purchase obligations(a)


















Other long-term liabilitiesPension plan contributions


(b
)






(b
)


(b
)


(b
)Unfunded pension benefits(c)(d)


162.5



3.0



6.0



6.1



147.4Postretirement medical benefits(d)


14.7



.7



1.2



1.2



11.6Insurance reserves(d)


22.8



7.8



6.8



6.0



2.2Total

$
606.5


$
74.8


$
81.6


$
283.7


$
166.4     (a)
    
    We did not have any significant purchase obligations as of
    December 31, 2006.(b)
    
    We will not be required to make contributions to our defined
    benefit pension plan for certain U.S. employees and
    retirees in 2007. The contribution required for 2008 is
    estimated between $30 million to $40 million, and is
    based upon several factors, most of which cannot be precisely
    quantified at this time. Contributions will also be required in
    2009 and beyond but cannot be reasonably estimated at this time
    due to the number of variable factors which impact the
    calculation.(c)
    
    Represents liabilities related to unfunded pension plans in the
    U.S. and Germany.(d)
    
    The amounts presented for unfunded pension benefits, other
    postretirement benefits and insurance reserves are estimates
    based on current assumptions and expectations. Actual annual
    payments related to these obligations can be expected to differ
    from the amounts shown. The amounts shown for insurance reserves
    are net of expected recoveries from excess carriers and other
    third parties totaling $7.4 million.    Liquidity
    and Sources of Capital
  non-U.S. operations. non-U.S. cash
  5 8
 43




---



##### Table of Contents



3 8 Step-Up Step-Up pay-in-kind
    1 2
 44




---



##### Table of Contents



1 2
  
    purchase 114,990,000 of the 115 million
    aggregate outstanding principal amount of Milacron Capital
    Holdings B.V.s
    75/8%
    Guaranteed Bonds due in April 2005 at the settlement of a tender
    offer there for;
    terminate and repay $19 million of borrowings outstanding
    under the revolving A facility of the Credit Suisse First Boston
    facility, which included additional amounts borrowed subsequent
    to March 12, 2004. We also used $17.4 million of
    availability under our asset based facility to replace or
    provide credit support for the outstanding letters of credit
    under the revolving A facility of the Credit Suisse First Boston
    facility;
    repay the $75 million term loan B facility of the
    Credit Suisse First Boston facility; and
    pay transaction expenses.  Form 10-K
    1 2
       45




---



##### Table of Contents



1 2
       46




---



##### Table of Contents



non-U.S. banks
          Cautionary
    Statement
    
    fluctuations in stock market valuations of pension plan assets
    or changes in interest rates that could result in increased
    pension expense and reduced shareholders equity and
    require us to make significant cash contributions in the future;
    our ability to comply with financial and other covenants
    contained in the agreements governing our indebtedness,
    including our senior secured notes and asset based credit
    facility;
    our ability to remediate or otherwise mitigate any material
    weakness in internal control over financial reporting or
    significant deficiencies that may be identified;
    global and regional economic conditions, consumer spending,
    capital spending levels and industrial production, particularly
    in segments related to the level of automotive production and
    spending in the plastics and construction industries;
    fluctuations in currency exchange rates of U.S. and foreign
    countries, including countries in Europe and Asia where we have
    several principal manufacturing facilities and where many of our
    customers, competitors and suppliers are based;
    fluctuations in interest rates which affect the cost of
    borrowing;
    production and pricing levels of important raw materials,
    including plastic resins, which are a key material used by
    purchasers of our plastics technologies products, as well as
    steel, oil and chemicals; 47




---



##### Table of Contents




    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 2006 and
    products expected to be introduced in 2007;
    any major disruption in production at key customer or supplier
    facilities or at our facilities;
    disruptions in global or regional commerce due to wars, to
    social, civil or political unrest in the
    non-U.S. countries
    in which we operate and to acts of terrorism, continued threats
    of terrorism and military, political and economic responses
    (including heightened security measures) to terrorism;
    alterations in trade conditions in and between the U.S. and
    non-U.S. countries
    where we do 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 we do business;
    litigation, claims or assessments, including but not limited to
    claims or problems related to product liability, warranty or
    environmental issues;
    our ability to satisfy our pension funding obligations for 2008
    and beyond when they become due; and
    our ability to successfully complete the implementation of our
    new Enterprise Resource Planning (ERP) system without
    significant business interruption.  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K.
  Item 8.
    Financial
    Statements and Supplementary Data  Regulation S-K.
 48




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 Years ended December 31, 2006, 2005 and 2004
  2006


2005


2004(In millions, except per-share amounts)Sales

$
820.1


$
808.9


$
774.2Cost of products sold


668.2



663.1



626.6Cost of products sold related to
    restructuring


.5







1.4Total cost of products sold


668.7



663.1



628.0Manufacturing margins


151.4



145.8



146.2Other costs and expensesSelling and administrative


140.2



133.8



126.9Restructuring costs


16.9



1.6



11.6Refinancing costs


1.8







21.4Other (income)
    expense-net


(.3
)


.4



2.9Total other costs and expenses


158.6



135.8



162.8Operating earnings (loss)


(7.2
)


10.0



(16.6
)InterestIncome


1.0



1.5



2.0Expense


(31.0
)


(31.8
)


(39.3
)Interest  net


(30.0
)


(30.3
)


(37.3
)Loss from continuing operations
    before income taxes


(37.2
)


(20.3
)


(53.9
)Provision (benefit) for income
    taxes


2.6



(3.8
)


(2.6
)Loss from continuing
    operations


(39.8
)


(16.5
)


(51.3
)Discontinued operations net of
    income taxesLoss from operations










(1.3
)Net gains on divestitures


.1



2.5



.8Total discontinued operations


.1



2.5



(.5
)Net loss

$
(39.7
)

$
(14.0
)

$
(51.8
)Loss applicable to common
    shareholders

$
(49.1
)

$
(20.1
)

$
(70.9
)Earnings (loss) per common
    share  basic and dilutedContinuing operations

$
(1.02
)

$
(.47
)

$
(1.72
)Discontinued
    operations






.05



(.01
)Net loss

$
(1.02
)

$
(.42
)

$
(1.73
)    49




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEET
 December 31, 2006 and 2005
  2006


2005(In millions, except par value)ASSETSCurrent assetsCash and cash equivalents

$
38.5


$
45.7Notes and accounts receivable,
    less allowances of $7.3 in 2006 and $9.0 in 2005


114.5



117.7InventoriesRaw materials


7.6



8.2Work-in-process
    and finished parts


88.4



83.6Finished products


74.7



69.3Total inventories


170.7



161.1Other current assets


41.9



44.3Total current assets


365.6



368.8Property, plant and
    equipment  net


114.3



114.2Goodwill


87.3



83.7Other noncurrent assets


83.3



104.9Total assets

$
650.5


$
671.6LIABILITIES AND
    SHAREHOLDERS DEFICITCurrent liabilitiesShort-term borrowings

$
25.5


$
4.1Long-term debt and capital lease
    obligations due within one year


2.2



2.6Trade accounts payable


77.8



76.4Advance billings and deposits


24.4



22.6Accrued and other current
    liabilities


82.6



76.3Total current liabilities


212.5



182.0Long-term accrued liabilities


226.5



261.4Long-term debt


232.8



233.3Total liabilities


671.8



676.7Commitments and contingencies






Shareholders deficit4% Cumulative Preferred shares


6.0



6.06% Series B Convertible
    Preferred Stock, $.01 par value (outstanding: .5 in both
    2006 and 2005)


116.1



112.9Common shares, $.01 par value
    (outstanding: 52.3 in 2006 and 50.1 in 2005)


.5



.5Capital in excess of par value


351.1



348.0Contingent warrants


.5



.5Accumulated deficit


(381.9
)


(332.8
)Accumulated other comprehensive
    loss


(113.6
)


(140.2
)Total shareholders
    deficit


(21.3
)


(5.1
)Total liabilities and
    shareholders deficit

$
650.5


$
671.6    50




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 AND
    SHAREHOLDERS EQUITY (DEFICIT)
 Years ended December 31, 2006, 2005 and 2004
  2006


2005


2004(In millions)4% Cumulative Preferred sharesBalance at beginning and end of
    period

$
6.0


$
6.0


$
6.06% Series B Convertible
    Preferred StockBalance at beginning of period


112.9



112.9



Net proceeds from issuance










97.0Beneficial conversion feature


3.2







15.9Balance at end of period


116.1



112.9



112.9Common sharesBalance at beginning of period


348.5



347.7



318.8Transfer of restricted stock
    liability balances to equity in connection with adoption of a
    new accounting standard


1.3







Effect of change in method of
    accounting for restricted stock forfeitures


(.1
)






Restricted stock expense


1.1







Net restricted stock activity










3.1Reissuance of treasury shares






.6



1.6Issuance of previously unissued
    shares


.8



.2



Beneficial conversion feature
    related to Series A Notes










6.6Conversion of Series A Notes
    to common stock










28.1Conversion to Series B
    Convertible Preferred Stock










(34.6
)Proceeds from rights offering










24.1Balance at end of period


351.6



348.5



347.7Contingent warrantsBalance at beginning of period


.5



.5



Issuance of contingent warrants










.5Balance at end of period


.5



.5



.5Accumulated deficitBalance at beginning of period


(332.8
)


(312.7
)


(241.7
)Net loss for the period


(39.7
)


(14.0
)


(51.8
)Dividends declared or accrued4% Cumulative Preferred shares


(.2
)


(.1
)


(.4
)6% Series B Convertible
    Preferred Stock


(6.0
)


(6.0
)


(2.9
)Beneficial conversion feature
    related to
    61/2%
    Series B Convertible Preferred Stock


(3.2
)






(15.9
)Balance at end of period


(381.9
)


(332.8
)


(312.7
)Accumulated other comprehensive
    income (loss)Balance at beginning of period


(140.2
)


(104.0
)


(106.7
)Foreign currency translation
    adjustments


17.7



(16.8
)


15.9Minimum pension liability
    adjustments


32.2



(19.4
)


(13.0
)Adjustment related to the adoption
    of a new accounting standard


(23.3
)






Other










(.2
)Balance at end of period


(113.6
)


(140.2
)


(104.0
)Total shareholders equity
    (deficit)

$
(21.3
)

$
(5.1
)

$
50.4Net loss for the period

$
(39.7
)

$
(14.0
)

$
(51.8
)Change in accumulated other
    comprehensive income (loss)


49.9



(36.2
)


2.7Total comprehensive income (loss)

$
10.2


$
(50.2
)

$
(49.1
)    51




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 Years ended December 31, 2006, 2005 and 2004
  2006


2005


2004(In millions)Increase (decrease) in cash and
    cash equivalentsOperating activities cash
    flowsNet loss

$
(39.7
)

$
(14.0
)

$
(51.8
)Operating activities providing
    (using) cashLoss from discontinued operations










1.3Net gain on divestitures


(.1
)


(2.5
)


(.8
)Depreciation and amortization


16.8



18.4



20.3Restructuring costs


8.2



1.6



13.0Refinancing costs


1.8







21.4Deferred income taxes


.8



(.7
)


8.7Working capital changesNotes and accounts receivable


7.9



10.0



(36.1
)Inventories


(4.5
)


(14.3
)


(1.1
)Other current assets


2.1



3.1



3.0Trade accounts payable


(1.7
)


1.1



9.3Other current liabilities


(2.0
)


(8.2
)


(30.4
)Decrease (increase) in other
    noncurrent assets


15.7



7.0



3.0Increase (decrease) in long-term
    accrued liabilities


(25.9
)


7.0



(1.9
)Other-net


1.4



.7



.4Net cash provided (used) by
    operating activities


(19.2
)


9.2



(41.7
)Investing activities cash
    flowsCapital expenditures


(13.8
)


(12.7
)


(8.8
)Net disposals of property, plant
    and equipment


2.9



2.6



.6Divestitures






.3



8.0Net cash used by investing
    activities


(10.9
)


(9.8
)


(.2
)Financing activities cash
    flowsIssuance of long-term debt










219.8Repayments of long-term debt


(1.6
)


(5.0
)


(261.5
)Increase (decrease) in short-term
    borrowings


21.2



(7.3
)


68.5Issuance of common shares










25.2Costs of 2004 rights offering






(1.1
)


Debt issuance costs






(.6
)


(27.8
)Dividends paid


(.2
)


(6.2
)


(3.3
)Net cash provided (used) by
    financing activities


19.4



(20.2
)


20.9Effect of exchange rate
    fluctuations on cash and cash equivalents


3.5



(2.7
)


1.6Cash flows of discontinued
    operationsOperating activities










(4.1
)Investing activities










(.1
)Total cash flows of discontinued
    operations










(4.2
)Decrease in cash and cash
    equivalents


(7.2
)


(23.5
)


(23.6
)Cash and cash equivalents at
    beginning of year


45.7



69.2



92.8Cash and cash equivalents at
    end of year

$
38.5


$
45.7


$
69.2    52




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  Summary
    of Significant Accounting Policies
  Use of
    Estimates
    Consolidation
    Foreign
    Currency Translation
  non-U.S. operations expense-net
  Revenue
    Recognition
         53




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Advertising
    Costs
    Income
    Taxes
  non-U.S. subsidiaries.
  Earnings
    Per Common Share
    Cash
    and Cash Equivalents
    Inventory
    Valuation
  first-in,
  Property,
    Plant and Equipment
      Range ofAsset

Depreciation LifeBuildings (new)


25   45 yearsBuildings (used)


20   30 yearsLand improvements


10   20 yearsBuilding components


5   45 yearsFactory machinery


6   12 yearsVehicles


3   6 yearsOffice furniture and fixtures


5   10 yearsComputers


3   5 yearsPersonal computers


3 years  54




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
    Long-Lived
    Assets
    Warranty
    Reserves
    Self-Insurance
    Reserves
     55




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Retirement
    Benefit Plans
  non-U.S. employees.
    Stock-Based
    Compensation
    Pro
    Forma Loss
  2005


2004(In millions, except per-share amounts)Net loss as reported

$
(14.0
)

$
(51.8
)Effect on reported loss of
    accounting for stock options at fair value






(1.2
)Pro forma net loss

$
(14.0
)

$
(53.0
)Loss per common share 
    basic and dilutedAs reported

$
(.42
)

$
(1.73
)Pro forma

$
(.42
)

$
(1.76
)     Derivative
    Financial Instruments
   56




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Changes
    in Methods of Accounting
      expense-net
       57




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Recently
    Issued Pronouncements
    non-U.S. jurisdictions
  Discontinued
    Operations
      Loss
    From Discontinued Operations
  2004(In millions)Sales

$
9.6Operating loss including
    restructuring costs


(1.2
)Allocated interest expense


(.1
)Loss from operations(a)

$
(1.3
)     (a)
    
    No income tax benefit could be recorded with respect to the
    losses incurred in 2004. 58




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Gain
    (Loss) on Divestiture of Discontinued Operations
  2006


2005


2004(In millions)Sale of Valenite

$
.9


$
1.0


$
(.4
)Sale of Widia and Werkö






.9



.5Sale of round metalcutting tools
    business


(.3
)


(.3
)


(.5
)Sale of grinding wheels business


(.2
)


.8



.6Adjustments of reserves for the
    1998 divestiture of the machine tools segment


(.3
)


.1



.6Net gain on divestitures

$
.1


$
2.5


$
.8   Restructuring
    Costs
     59




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  clean-up
  clean-up clean-up
     60




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               61




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            62




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restructuring
    Costs
  2006


2005


2004(In millions)EOC and Reform integration

$



$
(.2
)

$
.3Relocation of blow molding
    machinery and mold manufacturing


.6



.9



5.5Mahlberg closure






(.1
)


1.3Third quarter 2003 initiatives


.1







.6North America plastics machinery
    overhead reductions


.1



.4



1.1Discontinuation of blow molding
    product lines










1.5Downsizing Germany mold
    technologies facility in 2004


(.1
)


.1



2.1Additional 2004 European mold base
    reductions


.3







.6Consolidation of European sales
    offices


1.7



.3



Closure of metalworking fluids
    operation


.1



.2



Downsizing of Germany mold
    technologies facility in 2006


1.8







Reorganization of Germany
    injection molding machinery facility


6.5







Consolidation of European mold
    component operations


1.8







Reorganization of North America
    mold components operations


1.6







Liquidation of Japan sales office


1.3







U.S. plastics machinery
    headcount reductions


1.5







Other


.1







Total restructuring costs

$
17.4


$
1.6


$
13.0  63




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restructuring
    Costs
  2006


2005


2004(In millions)Accruals for restructuring costsTermination benefits

$
8.4


$
.4


$
2.5Facility exit costs


1.6



.1



.2Total accruals


10.0



.5



2.7Supplemental retirement benefits


1.5







Adjustment of assets to realizable
    values and gains and losses on disposal


1.9







6.3Other restructuring costsCosts charged to expense as
    incurredInventory adjustments related to
    product line discontinuation


.5







1.4Inventory and machinery relocation


.2



.1



1.2Employee relocation and other move
    costs






.1



Severance and facility exist costs


3.3



.8



.8Other


.2



.4



.5Reserve adjustments


(.2
)


(.1
)


(.2
)17.4



1.8



12.7Costs (income) related to the EOC
    and Reform integration






(.2
)


.3Total restructuring costs

$
17.4


$
1.6


$
13.0      64




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Restructuring
    Reserves
  2006Beginning





Usage and


EndingBalance


Additions


Other


Balance(In millions)EOC and Reform integrationTermination benefits

$
.7


$



$
(.1
)

$
.6Facility exit costs


.1







(.1
)


.8







(.2
)


.6Restructuring costsTermination benefits


.4



8.4



(6.3
)


2.5Facility exit costs


.2



1.6



(1.0
)


.8.6



10.0



(7.3
)


3.3Total reserves related to
    continuing operations

$
1.4


$
10.0


$
(7.5
)

$
3.9   2005Beginning





Usage and


EndingBalance


Additions


Other


Balance(In millions)EOC and Reform integrationTermination benefits

$
1.0


$



$
(.3
)

$
.7Facility exit costs


.3







(.2
)


.11.3







(.5
)


.8Restructuring costsTermination benefits


1.3



.4



(1.3
)


.4Facility exit costs


.2



.1



(.1
)


.21.5



.5



(1.4
)


.6Total reserves related to
    continuing operations

$
2.8


$
.5


$
(1.9
)

$
1.4     Refinancing
    Costs
    5 8
 65




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Research
    and Development
    Research
    and Development
  2006


2005


2004(In millions)Research and development

$
20.5


$
19.7


$
19.8   Retirement
    Benefit Plans
     66




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Incremental
    Effects of Applying SFAS No. 158
  Before





AfterApplication of


Adoption


Application ofSFAS No. 158


Adjustments


SFAS No. 158(In millions)Intangible pension assets

$
2.4


$
(2.4
)

$
Other noncurrent assets


85.7



(2.4
)


83.3Total Assets


652.9



(2.4
)


650.5Current liability for retirement
    benefits






4.0



4.0Accrued and other current
    liabilities


78.6



4.0



82.6Total current
    liabilities


208.5



4.0



212.5Long-term liability for retirement
    benefits


160.2



16.9



177.1Long-term accrued liabilities


209.6



16.9



226.5Total liabilities


650.9



20.9



671.8Minimum pension liability
    adjustment


(132.3
)


132.3



Defined benefit plan unrecognized
    net prior service costs and net loss






(155.6
)


(155.6
)Accumulated other comprehensive
    loss


(90.3
)


(23.3
)


(113.6
)Total stockholders equity
    (deficit)

$
2.0


$
(23.3
)

$
(21.3
)     Components
    of Accumulated Other Comprehensive Loss
  Net ofGross


Tax(In millions)Unrecognized losses

$
167.9


$
116.5Unrecognized prior service costs


2.4



2.4Total

$
170.3


$
118.9  67




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007
    Projected Amortization to be Included in Net Periodic Pension
    Cost
  Net ofGross


Tax(In millions)Amortization of unrecognized losses

$
10.4


$
10.4Amortization of unrecognized prior
    service costs


.5



.5Total

$
10.9


$
10.9     Pension
    Expense
  2006


2005


2004(In millions)Service cost (benefits earned
    during the period)

$
4.9


$
4.7


$
4.2Interest cost on projected benefit
    obligation


33.5



33.5



33.9Expected return on plan assets


(32.7
)


(32.9
)


(35.1
)Supplemental retirement benefits


1.5







Amortization of unrecognized prior
    service cost


.5



.7



.8Amortization of unrecognized losses


11.1



10.4



7.0Pension expense

$
18.8


$
16.4


$
10.8     Projected
    Benefit Obligation
  2006


2005(In millions)Balance at beginning of year

$
(576.6
)

$
(557.2
)Service cost


(4.9
)


(4.7
)Interest cost


(33.5
)


(33.5
)Supplemental retirement benefits


(1.5
)


Benefits paid


36.1



42.9Actuarial loss


(9.0
)


(7.9
)Changes in discount rates


16.1



(18.2
)Foreign currency translation
    adjustments


(1.9
)


2.0Balance at end of year

$
(575.2
)

$
(576.6
)  68




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Plan
    Assets
  2006


2005(In millions)Balance at beginning of year

$
362.6


$
378.8Actual investment gain


45.1



21.3Benefits and expenses paid


(36.8
)


(39.9
)Contributions


32.1



2.4Balance at end of year

$
403.0


$
362.6     Allocation
    of Plan Assets
  2006


2005Equity securities


74
%


71
%Debt securities


21
%


29
%Cash and cash equivalents


5
%



%100
%


100
%          69




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Funded
    Status at Year-End
  2006


2005(In millions)Vested benefit obligation

$
(524.2
)

$
(532.2
)Accumulated benefit obligation

$
(539.8
)

$
(546.5
)Projected benefit obligation

$
(575.2
)

$
(576.6
)Plan assets at fair value


403.0



362.6Deficiency of plan assets in
    relation to projected benefit obligation


(172.2
)


(214.0
)Unrecognized net loss


167.9



194.5Unrecognized prior service cost


2.4



2.9Accrued pension cost

$
(1.9
)

$
(16.6
)     Balance
    Sheet Presentation
  2006


2005(In millions)Intangible asset

$



$
2.9Current accrued pension cost


(3.0
)


Noncurrent accrued pension cost


(169.2
)


(183.9
)Accumulated other comprehensive
    loss(a)


170.3



164.4$
(1.9
)

$
(16.6
)     (a)
    
    Represents the pretax amount of an after-tax charge to
    accumulated other comprehensive loss of $118.9 million in
    2006 and $112.3 million in 2005.      Actuarial
    Assumptions
  2006


2005


2004Discount rate


5.70
%


5.97
%


6.24
%Expected long-term rate of return
    on plan assets


8.75
%


9.00
%


9.00
%Rate of increase in future
    compensation levels


3.51
%


3.76
%


3.66
%  70




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Actuarial
    Assumptions
  2006


2005Discount rate


5.95
%


5.71
%Rate of increase on future
    compensation levels


3.55
%


3.77
%     Pension
    Benefit Payments
  (In millions)2007

$
41.12008


37.62009


37.22010


37.22011


37.12012-2016


194.1        71




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Postretirement
    Health Care Cost (Income)
  2006


2005


2004(In millions)Service cost (benefits earned
    during the period)

$
.1


$
.1


$
.1Interest cost on accumulated
    postretirement benefit obligation


.4



1.3



1.4Amortization of effect of plan
    amendment


(2.1
)






Amortization of unrecognized gains


(.3
)


(.1
)


(.2
)Postretirement health care cost
    (income)

$
(1.9
)

$
1.3


$
1.3     Accumulated
    Postretirement Benefit Obligation
  2006


2005(In millions)Balance at beginning of year

$
(7.7
)

$
(22.8
)Service cost


(.1
)


(.1
)Interest cost


(.4
)


(1.3
)Participant contributions


(1.9
)


(5.9
)Benefits paid


2.6



8.6Actuarial gain (loss)


.3



(.2
)Effect of plan amendment






14.5Changes in discount rates


.2



(.5
)Balance at end of year

$
(7.0
)

$
(7.7
)     Components
    of Accumulated Other Comprehensive Loss
  Net ofGross


Tax(In millions)Unrecognized net gain

$
(3.7
)

$
(3.7
)Unamortized effect of plan
    amendment


(12.5
)


(12.5
)Total

$
(16.2
)

$
(16.2
)  72




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007
    Projected Amortization to be Included in Net Periodic Benefit
    Cost
  Net ofGross


Tax(In millions)Amortization of unrecognized gains

$
(.3
)

$
(.3
)Amortization of effect of plan
    amendment


(2.1
)


(2.1
)Total

$
(2.4
)

$
(2.4
)     Accrued
    Postretirement Health Care Benefits
  2006


2005(In millions)Accumulated postretirement benefit
    obligationRetirees

$
(3.7
)

$
(4.4
)Fully eligible active participants


(1.1
)


(1.0
)Other active participants


(2.2
)


(2.3
)(7.0
)


(7.7
)Unamortized effect of plan
    amendment


(12.5
)


(14.5
)Unrecognized net gain


(3.7
)


(3.6
)Accrued postretirement health care
    benefits

$
(23.2
)

$
(25.8
)     Actuarial
    Assumptions
  2006


2005


2004Accumulated postretirement benefit
    obligation


6.00
%


5.75
%


6.00
%Postretirement health care cost


5.75
%


6.00
%


6.25
%    73




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Postretirement
    Health Care Benefits
  (In millions)2007

$
.72008


.62009


.62010


.62011


.62012-2016


3.0   Income
    Taxes
  non-U.S. net non-U.S. loss non-U.S. jurisdictions 
       74




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          non-U.S. operations non-U.S. operations
  non-U.S. operations
 75




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Components
    of Deferred Tax Assets and Liabilities
  2006


2005(In millions)Deferred tax assetsNet operating loss carryforwards

$
135.8


$
109.3Tax credit carryforwards


17.4



16.8Accrued postretirement health care
    benefits


2.9



9.3Inventories, due principally to
    obsolescence reserves and additional costs inventoried for tax
    purposes


2.7



4.1Accrued employee benefits other
    than pensions and retiree health care benefits


2.1



1.6Accrued pension cost


11.4



7.6Accrued warranty cost


1.2



1.3Accrued taxes


1.2



1.6Accounts receivable, due
    principally to allowances for doubtful accounts


.9



1.6Goodwill


24.3



31.4Deferred pension costs


41.0



52.1Accrued liabilities and other


17.8



17.4Total deferred tax assets


258.7



254.1Less valuation allowances


(175.7
)


(168.6
)Deferred tax assets net of
    valuation allowances


83.0



85.5Deferred tax liabilitiesProperty, plant and equipment, due
    principally to differences in depreciation methods


9.1



8.6Inventories


2.6



5.8Total deferred tax liabilities


11.7



14.4Net deferred tax assets

$
71.3


$
71.1     Loss
    Before Income Taxes
  2006


2005


2004(In millions)United States

$
(31.1
)

$
(23.6
)

$
(59.7
)Non-U.S.


(6.1
)


3.3



5.8$
(37.2
)

$
(20.3
)

$
(53.9
)  76




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  non-U.S. losses non-U.S. earnings non-U.S. operations
  Provision
    (Benefit) for Income Taxes
  2006


2005


2004(In millions)Current provision (benefit)United States

$
(1.3
)

$
(2.2
)

$
(12.5
)State and local


.2



.3



.1Non-U.S.


2.9



(1.2
)


1.11.8



(3.1
)


(11.3
)Deferred provision (benefit)United States


(1.3
)


2.7



2.7Non-U.S.


2.1



(3.4
)


6.0.8



(.7
)


8.7$
2.6


$
(3.8
)

$
(2.6
)   Components
    of the Provision (Benefit) for Deferred Income
    Taxes
  2006


2005


2004(In millions)Change in valuation allowances

$
7.1


$
11.5


$
17.3Change in deferred taxes related
    to operating loss and tax credit carryforwards


(27.1
)


(.7
)


(17.8
)Depreciation and amortization


7.6



7.9



7.1Inventories and accounts receivable


(1.1
)


(2.9
)


(1.7
)Accrued pension and other employee
    costs


6.8



(9.7
)


(4.0
)Other


7.5



(6.8
)


7.8$
.8


$
(.7
)

$
8.7  77




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reconciliation
    of the U.S. Statutory Rate to the Tax Provision
    Rate
  2006


2005


2004U.S. statutory tax rate


(35.0
)%


(35.0
)%


(35.0
)%Increase (decrease) resulting fromEffect of changes in valuation
    allowances


31.1



61.1



37.9Favorable resolution of a
    statutory tax deduction






(37.7
)


Adjustment of tax reserves


(2.8
)






(19.5
)Statutory tax rate changes


2.5



3.5



.9State and local income taxes, net
    of federal benefit


.6



1.4



.2Foreign dividends


12.9







12.4Other


(2.5
)


(11.9
)


(1.7
)6.8
%


(18.6
)%


(4.8
)%   non-U.S. subsidiaries
  non-U.S. earnings
    Loss Per
    Common Share
    Loss
    Applicable to Common Shareholders
  2006


2005


2004(In millions)Net loss

$
(39.7
)

$
(14.0
)

$
(51.8
)Dividends on preferred shares


(6.2
)


(6.1
)


(3.2
)Beneficial conversion feature
    related to Series B Preferred Stock(a)


(3.2
)






(15.9
)Loss applicable to common
    shareholders

$
(49.1
)

$
(20.1
)

$
(70.9
)     (a)
    
    Represents a beneficial conversion feature arising from the fact
    that holders of the Series B Preferred Stock are able to acquire
    common shares of the company at an effective conversion price
    that is less than their fair value on March 12, 2004 (see
    Shareholders Equity). 78




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Reconciliation
    of Shares
  2006


2005


2004(In thousands)Weighted-average common shares
    outstanding


48,329



47,665



40,955Effect of dilutive stock options
    and restricted shares










Weighted-average common shares
    assuming dilution


48,329



47,665



40,955     Receivables
  non-U.S. subsidiaries
      Inventories
    Goodwill
    and Other Intangible Assets
   79




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Changes
    in Goodwill
  2006MachineryTechnologies


MachineryNorth


Technologies


Mold


IndustrialAmerica


Europe


Technologies


Fluids


Total(In millions)Balance at beginning of year

$
17.8


$
.7


$
55.0


$
10.2


$
83.7Foreign currency translation
    adjustments










3.6







3.6Balance at end of year

$
17.8


$
.7


$
58.6


$
10.2


$
87.3   2005MachineryTechnologies


MachineryNorth


Technologies


Mold


IndustrialAmerica


Europe


Technologies


Fluids


Total(In millions)Balance at beginning of year

$
17.6


$
.8


$
58.0


$
10.2


$
86.6Foreign currency translation
    adjustments


.2



(.1
)


(3.0
)






(2.9
)Balance at end of year

$
17.8


$
.7


$
55.0


$
10.2


$
83.7   Property,
    Plant and Equipment
    Property,
    Plant and
    Equipment-Net
  2006


2005(In millions)Land

$
8.8


$
9.1Buildings


121.5



121.5Machinery and equipment


219.6



208.7349.9



339.3Less accumulated depreciation


(235.6
)


(225.1
)$
114.3


$
114.2  80




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    Assets
    Other
    Current Assets
  2006


2005(In millions)Deferred income taxes

$
24.4


$
25.3Recoverable from excess liability
    carriers


3.2



3.2Refundable income taxes


.5



3.8Prepaid expenses and other


13.8



12.0$
41.9


$
44.3   Other
    Noncurrent Assets
  2006


2005(In millions)Deferred income taxes net of
    valuation allowances

$
58.6


$
60.2Recoverable from excess liability
    carriers


4.2



4.2Intangible assets other than
    goodwill


1.6



2.6Other


18.9



37.9$
83.3


$
104.9   Liabilities
    Accrued
    and Other Current Liabilities
  2006


2005(In millions)Accrued salaries, wages and other
    compensation

$
21.1


$
19.6Taxes payable other than income
    taxes


7.4



8.1Reserves related to prior
    years divestitures of discontinued operations


2.2



2.0Accrued and deferred income taxes


5.3



8.3Accrued insurance and
    self-insurance reserves


15.0



11.3Other accrued expenses


31.6



27.0$
82.6


$
76.3  81




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Warranty
    Reserves
  2006


2005(In millions)Balance at beginning of year

$
5.6


$
6.5Accruals


3.3



3.6Payments


(2.7
)


(3.2
)Warranty expirations


(.6
)


(1.0
)Foreign currency translation
    adjustments






(.3
)Balance at end of year

$
5.6


$
5.6     Long-Term
    Accrued Liabilities
  2006


2005(In millions)Accrued pensions and other
    compensation

$
172.4


$
39.8Minimum pension liability






148.5Accrued postretirement health care
    benefits


6.8



26.4Self-insurance reserves(a)


19.7



24.0Accrued and deferred income taxes


9.4



10.2Reserves related to prior
    years divestitures of discontinued operations


4.1



5.6Other


14.1



6.9$
226.5


$
261.4     (a)
    
    As presented in the above table, self-insurance reserves exclude
    expected recoveries from excess liability carriers and other
    third parties of $7.4 million in both 2006 and 2005. These
    amounts are included in other current assets and other
    noncurrent assets in the Consolidated Balance Sheets. Expected
    recoveries represent the excess of total reserves for known
    exposures and estimates of incurred but not reported claims over
    the limits on the policies the companys wholly-owned
    insurance subsidiary issues to it. These amounts are classified
    as assets because, unless other payment arrangements are
    negotiated, the company (as the insured party) expects that it
    would first pay any indemnity claims and expenses in excess of
    the insurance subsidiarys limits and then pursue
    reimbursement by the excess carriers.  Refinancing
    Transactions
  3 8 Step-Up Step-Up
 82




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  pay-in-kind
    1 2
    1 2
  
    purchase 114,990,000 of the 115 million
    aggregate outstanding principal amount of Milacron Capital
    Holdings B.V.s
    75/8%
    Guaranteed Bonds due in April 2005 at the settlement of a tender
    offer there for;
    terminate and repay $19 million of borrowings outstanding
    under the revolving A facility of the Credit Suisse First Boston
    facility, which included additional amounts borrowed subsequent
    to March 12, 2004. The company also used $17.4 million
    in availability under the asset based facility to replace or
    provide credit support for the outstanding letters of credit
    under the revolving A facility of the Credit Suisse First Boston
    facility;
    repay the $75 million term loan B facility of the
    Credit Suisse First Boston facility; and
    pay transaction expenses.     83




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Short-Term
    Borrowings
    Short-Term
    Borrowings
  2006


2005(In millions)Asset based credit facility due
    2011

$
23.2


$
Asset based credit facility due
    2008






2.2Borrowings under other lines of
    credit


2.3



1.9$
25.5


$
4.1     1 2
      1 2
 84




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  1 2 1 2
      non-U.S. banks
  Long-Term
    Debt
    Long-Term
    Debt
  2006


2005(In millions)111/2% Senior
    Secured Notes due 2011

$
221.2


$
220.6Capital lease obligations


12.3



13.4Other


1.5



1.9235.0



235.9Less current maturities


(2.2
)


(2.6
)$
232.8


$
233.3   1 2
 85




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1 2
  1 2
  1 2
    1 2
        Maturities
    of Long-Term Debt
  (In millions)2007

$
.72008


.42009


.22010


.22011


225.0    86




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Capital
    Lease Payments
  (In millions)2007

$
2.12008


2.22009


2.22010


2.22011


2.12012 and after


4.1Total capital lease payments


14.9Less interest component(a)


(2.6
)Capital lease obligations

$
12.3     (a)
    
    Includes $.6 million applicable to 2007.    Rental
    Payments
  (In millions)2007

$
12.02008


7.92009


4.02010


1.32011


.6After 2011


1.4     Shareholders
    Equity
      
    an increase in the number of authorized common shares from
    50.0 million to 165.0 million;
    a decrease in the par value of each common share from
    $1.00 per share to $.01 per share;
    the issuance of a new series of Series B Preferred Stock
    that is convertible into common shares; and 87




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    the issuance of contingent warrants which will be exercisable to
    purchase additional shares of the companys common stock
    under certain circumstances.  pay-in-kind 1 2
     88




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      pay-in-kind pay-in-kind
  00-27,
     89




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               90




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Shareholders
    Equity  Preferred and Common Shares
  2006


2005(In millions, except per-share amounts)4% Cumulative Preferred shares
    authorized, issued and outstanding, 60,000 shares at
    $100 par value, redeemable at $105 a share

$
6.0


$
6.06% Series B Convertible
    Preferred Stock authorized, issued and outstanding,
    500,000 shares at $.01 par value






Common shares, $.01 par value
    authorized 165,000,000 shares, issued and outstanding,
    2006: 52,319,437 shares, 2005: 50,112,490 shares


.5



.5       Changes
    in Common Shares Outstanding
  2006


2005


2004Outstanding at beginning of year


50,112,490



48,559,474



34,824,025Net restricted stock activity


1,438,592



1,122,496



760,440Reissuance of treasury shares for
    employee benefit and incentive programs


4,700



430,520



295,434Conversion of Series A Notes
    to common stock










15,000,000Conversion of common stock to
    Series B Preferred Stock










(15,000,000
)Common shares issued for benefit
    programs


763,655







Net common shares issued in rights
    offering










12,679,575Outstanding at end of year


52,319,437



50,112,490



48,559,474      91




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Comprehensive
    Income (Loss)
    Comprehensive
    Income (Loss)
  2006


2005


2004(In millions)Net loss

$
(39.7
)

$
(14.0
)

$
(51.8
)Foreign currency translation
    adjustments


17.7



(16.8
)


15.9Minimum pension liability
    adjustment(a)


32.2



(19.4
)


(13.0
)Change in fair value of foreign
    currency exchange contracts










(.2
)Total comprehensive income (loss)

$
10.2


$
(50.2
)

$
(49.1
)     (a)
    
    In all years presented, includes no income tax expense or
    benefit. 92




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Accumulated
    Other Comprehensive Loss
  2006


2005(In millions)Foreign currency translation
    adjustments

$
(9.3
)

$
(27.0
)Defined benefit plans:Net unamortized prior service costs


10.0



Unamortized net loss(a)


(114.3
)


Minimum pension liability
    adjustment(a)






(113.2
)$
(113.6
)

$
(140.2
)     (a)
    
    In both 2006 and 2005, the amount presented is net of a
    U.S. tax benefit of $51.4 million that was recorded in
    2002.  Contingencies
    and/or
  Foreign
    Exchange Contracts
    Share-Based
    Compensation
   93




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Stock
    Options
  2006Weighted-


Weighted-Average


AverageExercise


ContractualShares


Price


Term(a)Outstanding at December 31,
    2005


3,180,700


$
19.22



2.4Cancellations


(405,675
)


25.75



Forfeitures


(27,125
)


17.39



2.2Outstanding at December 31,
    2006


2,747,900



18.27



1.7Exercisable at December 31,
    2006


2,736,900



18.32



1.7     (a)
    
    In years           94




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Restricted
    Stock and Deferred Shares
  2006Weighted -AverageGrant DateShares


Fair Value(a)Balance at December 31, 2005


833,313


$
3.14Granted


1,671,442



1.52Vested


(200,270
)


2.19Forfeited


(41,932
)


2.63Balance at December 31, 2006


2,262,553



2.04   Restricted
    Stock and Deferred Shares Subject to Financial
    Targets
  2006Weighted -AverageGrant DateShares


Fair Value(a)Balance at December 31, 2005


1,990,000


$
3.90Granted


200,000



.83Forfeited


(47,500
)


4.30Balance at December 31, 2006


2,142,500



3.60     (a)
    
    Grant-date fair values are the average high and low trade prices
    of the companys common shares on the New York Stock
    Exchange on the respective grant dates.   95




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Organization
          Total
    Sales by Segment
  2006


2005


2004(In millions)Plastics technologiesMachinery technologies-North
    America

$
402.4


$
376.5


$
334.4Machinery technologies-Europe


153.4



149.5



167.0Mold technologies


158.8



173.4



167.1Eliminations


(12.0
)


(2.7
)


(3.3
)Total plastics technologies


702.6



696.7



665.2Industrial fluids


117.5



112.2



109.0Total sales

$
820.1


$
808.9


$
774.2  96




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Customer
    Sales by Segment
  2006


2005


2004(In millions)Plastics technologiesMachinery technologies-North
    America

$
400.6


$
376.0


$
333.9Machinery technologies-Europe


143.2



147.3



164.2Mold technologies


158.8



173.4



167.1Total plastics technologies


702.6



696.7



665.2Industrial fluids


117.5



112.2



109.0Total sales

$
820.1


$
808.9


$
774.2   Operating
    Information by Segment
  2006


2005


2004(In millions)Operating profit (loss)Plastics technologiesMachinery technologies-North
    America

$
17.1


$
17.3


$
16.0Machinery technologies-Europe


(4.9
)


(5.0
)


1.9Mold technologies


3.0



3.9



4.3Total plastics technologies


15.2



16.2



22.2Industrial fluids


10.8



8.7



9.2Restructuring costs(a)


(17.4
)


(1.6
)


(13.0
)Refinancing costs


(1.8
)






(21.4
)Corporate expenses


(13.6
)


(12.8
)


(11.9
)Other unallocated expenses(b)


(.4
)


(.5
)


(1.7
)Operating earnings (loss)


(7.2
)


10.0



(16.6
)Interest
    expense-net


(30.0
)


(30.3
)


(37.3
)Loss before income taxes

$
(37.2
)

$
(20.3
)

$
(53.9
)Segment assets(c)Plastics technologiesMachinery technologies-North
    America

$
200.4


$
193.7


$
183.9Machinery technologies-Europe


100.2



97.5



116.4Mold technologies


136.4



140.0



152.9Other


.4



(1.1
)


(.9
)Total plastics technologies


437.4



430.1



452.3Industrial fluids


47.3



44.9



49.2Cash and cash equivalents


38.5



45.7



69.2Deferred income taxes


83.0



85.5



89.2Unallocated corporate and other(d)


44.3



65.4



78.0Total assets

$
650.5


$
671.6


$
737.9 97




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2006


2005


2004(In millions)Capital expendituresPlastics technologiesMachinery technologies-North
    America

$
6.6


$
5.8


$
4.0Machinery technologies-Europe


2.6



2.9



1.6Mold technologies


2.4



2.3



1.7Total plastics technologies


11.6



11.0



7.3Industrial fluids


1.5



1.0



1.4Unallocated corporate


.7



.7



.1Total capital expenditures

$
13.8


$
12.7


$
8.8Depreciation and amortizationPlastics technologiesMachinery technologies-North
    America

$
6.1


$
6.4


$
7.3Machinery technologies-Europe


3.8



4.2



4.2Mold technologies


5.2



6.0



6.7Total plastics technologies


15.1



16.6



18.2Industrial fluids


1.5



1.7



1.8Unallocated corporate


.2



.1



.3Total depreciation and amortization

$
16.8


$
18.4


$
20.3     (a)
    
    In 2006, $2.2 million to machinery technologies 
    North America, $8.3 million relates to machinery
    technologies  Europe, $5.4 million in mold
    technologies, $.2 million to industrial fluids and
    $1.3 million relates to corporate expenses. In 2005,
    $1.3 million relates to machinery technologies 
    North America, $.2 million to machinery
    technologies  Europe, $(.1) million to mold
    technologies and $.2 million to industrial fluids. In 2004,
    $8.0 million relates to machinery technologies 
    North America, $.2 million to machinery
    technologies  Europe and $4.8 million relates to
    mold technologies. In 2006 and 2004, $.5 million and
    $1.4 million, respectively, relates to product line
    discontinuation and is therefore included in cost of products
    sold in the Consolidated Statements of Operations for those
    years.(b)
    
    In 2004, includes financing costs, including those related to
    the sale of accounts receivable prior to March 12, 2004.(c)
    
    Segment assets consist principally of accounts receivable,
    inventories, goodwill and property, plant and equipment which
    are considered controllable assets for management reporting
    purposes.(d)
    
    Consists principally of corporate assets, nonconsolidated
    investments, certain intangible assets, expected recoveries from
    excess insurance carriers, cash surrender value of company-owned
    life insurance that was liquidated in 2006, prepaid expenses and
    deferred charges. 98




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Geographic
    Information
  2006


2005


2004(In millions)Sales(a)United States

$
504.5


$
504.3


$
466.6Non-U.S. operationsGermany


113.0



101.7



104.5Other Western Europe


126.1



128.4



134.2Asia


43.2



39.6



36.4Other


33.3



34.9



32.5Total sales

$
820.1


$
808.9


$
774.2Noncurrent assetsUnited States

$
70.6


$
93.5


$
101.8Non-U.S. operationsGermany


35.5



34.3



45.4Other Western Europe


19.0



17.8



18.7Asia


7.5



7.0



6.6Other


1.2



1.4



1.7133.8



154.0



174.2Investments and advances not
    consolidated


3.6



2.3



2.0Goodwill


87.3



83.7



86.6Other intangible assets


1.6



2.6



5.1Deferred income taxes net of
    valuation allowances


58.6



60.2



63.2Total noncurrent assets

$
284.9


$
302.8


$
331.1     (a)
    
    Sales are attributed to specific countries or geographic areas
    based on the origin of the shipment.    non-U.S. operations
  Subsequent
    Event
  one-for-ten
 99




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Condensed
    Consolidating Financial Information
  1 2 This information is provided pursuant to
    Rule 3-10
    of
    Regulation S-X
    in lieu of separate financial statements of each subsidiary
    guaranteeing the Senior Secured Notes.
 100




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Operations
  Year Ended December 31, 2006Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Sales

$



$
537.8


$
303.9


$
(21.6
)

$
820.1Cost of products sold


8.5



435.1



246.2



(21.6
)


668.2Cost of products sold related to
    restructuring










.5







.5Total cost of products sold


8.5



435.1



246.7



(21.6
)


668.7Manufacturing margins


(8.5
)


102.7



57.2







151.4Other costs and expensesSelling and administrative


26.5



55.1



58.6







140.2Restructuring costs


.2



5.1



11.6







16.9Refinancing costs


1.8















1.8Other expense  net


(.6
)






.3







(.3
)Total other costs and expenses


27.9



60.2



70.5







158.6Operating earnings (loss)


(36.4
)


42.5



(13.3
)






(7.2
)Other non-operating expense
    (income) Intercompany management fees


(12.6
)


12.6











Intercompany interest


(53.6
)


55.1



(1.5
)






Equity in (earnings) losses of
    subsidiaries


44.5



(.9
)






(43.6
)


Other intercompany transactions


(3.2
)


15.3



(12.1
)






Total other non-operating expense
    (income)


(24.9
)


82.1



(13.6
)


(43.6
)


Earnings (loss) from continuing
    operations before interest and income taxes


(11.5
)


(39.6
)


.3



43.6



(7.2
)Interest expense  net


(30.7
)


1.0



(.3
)






(30.0
)Earnings (loss) from continuing
    operations before income taxes


(42.2
)


(38.6
)






43.6



(37.2
)Provision (benefit) for income
    taxes


(2.4
)


1.1



3.9







2.6Earnings (loss) from continuing
    operations


(39.8
)


(39.7
)


(3.9
)


43.6



(39.8
)Discontinued operations net of
    income taxesNet gain on divestitures


.1















.1Net earnings (loss)

$
(39.7
)

$
(39.7
)

$
(3.9
)

$
43.6


$
(39.7
)  101




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Operations
  Year Ended December 31, 2005Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Sales

$



$
541.0


$
291.2


$
(23.3
)

$
808.9Cost of products sold


6.9



442.4



237.1



(23.3
)


663.1Manufacturing margins


(6.9
)


98.6



54.1







145.8Other costs and expensesSelling and administrative


26.4



51.5



55.9







133.8Restructuring costs






1.3



.3







1.6Other expense  net


.4



(1.3
)


1.3







.4Total other costs and expenses


26.8



51.5



57.5







135.8Operating earnings (loss)


(33.7
)


47.1



(3.4
)






10.0Other non-operating expense
    (income) Intercompany management fees


(12.6
)


12.6











Intercompany interest


(28.5
)


30.2



(1.7
)






Equity in (earnings) losses of
    subsidiaries


(8.9
)


(52.6
)






61.5



Total other non-operating expense
    (income)


(50.0
)


(9.8
)


(1.7
)


61.5



Earnings (loss) from continuing
    operations before interest and income taxes


16.3



56.9



(1.7
)


(61.5
)


10.0Interest expense  net


(30.7
)


.9



(.5
)






(30.3
)Earnings (loss) from continuing
    operations before income taxes


(14.4
)


57.8



(2.2
)


(61.5
)


(20.3
)Provision (benefit) for income
    taxes


2.1



1.2



(7.1
)






(3.8
)Earnings (loss) from continuing
    operations


(16.5
)


56.6



4.9



(61.5
)


(16.5
)Discontinued operations net of
    income taxesNet gain on divestitures


2.5















2.5Net earnings (loss)

$
(14.0
)

$
56.6


$
4.9


$
(61.5
)

$
(14.0
)  102




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Operations
  Year Ended December 31, 2004Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Sales

$



$
498.0


$
300.7


$
(24.5
)

$
774.2Cost of products sold


5.3



408.1



237.7



(24.5
)


626.6Cost of products sold related to
    restructuring






1.4











1.4Total cost of products sold


5.3



409.5



237.7



(24.5
)


628.0Manufacturing margins


(5.3
)


88.5



63.0







146.2Other costs and expensesSelling and administrative


17.6



52.0



57.3







126.9Restructuring costs


.1



6.5



5.0







11.6Refinancing costs


15.8



5.6











21.4Other expense  net


2.0



.2



.7







2.9Total other costs and expenses


35.5



64.3



63.0







162.8Operating earnings (loss)


(40.8
)


24.2











(16.6
)Other non-operating expense
    (income) Intercompany management fees


(10.9
)


10.9











Intercompany interest


(15.4
)


16.3



(.9
)






Equity in (earnings) losses of
    subsidiaries


14.8



(4.1
)






(10.7
)


Other intercompany transactions


(1.2
)


1.1



.1







Total other non-operating expense
    (income)


(12.7
)


24.2



(.8
)


(10.7
)


Earnings (loss) from continuing
    operations before interest and income taxes


(28.1
)






.8



10.7



(16.6
)Interest expense  net


(32.3
)


(4.4
)


(.6
)






(37.3
)Earnings (loss) from continuing
    operations before income taxes


(60.4
)


(4.4
)


.2



10.7



(53.9
)Provision (benefit) for income
    taxes


(7.8
)


.8



4.4







(2.6
)Earnings (loss) from continuing
    operations


(52.6
)


(5.2
)


(4.2
)


10.7



(51.3
)Discontinued operations net of
    income taxesLoss from operations






(1.3
)










(1.3
)Net gain on divestitures


.8















.8Total discontinued operations


.8



(1.3
)










(.5
)Net earnings (loss)

$
(51.8
)

$
(6.5
)

$
(4.2
)

$
10.7


$
(51.8
)  103




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Balance Sheet
  December 31, 2006Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)ASSETSCurrent assetsCash and cash equivalents

$
(.7
)

$
4.2


$
35.0


$



$
38.5Notes and accounts receivable
    (excluding intercompany receivables)


.4



63.5



50.6







114.5Inventories






105.3



65.4







170.7Other current assets


11.3



11.1



19.5







41.9Intercompany receivables (payables)


(333.3
)


221.1



114.5



(2.3
)


Total current assets


(322.3
)


405.2



285.0



(2.3
)


365.6Property, plant and
    equipment  net


1.1



53.1



60.1







114.3Goodwill






53.1



34.2







87.3Investment in subsidiaries


216.7



(5.1
)


(15.9
)


(195.7
)


Intercompany advances 
    net


514.6



(354.6
)


(160.0
)






Other noncurrent assets


22.0



42.3



19.0







83.3Total assets

$
432.1


$
194.0


$
222.4


$
(198.0
)

$
650.5LIABILITIES AND
    SHAREHOLDERS EQUITY (DEFICIT)Current liabilitiesShort-term borrowings

$
23.2


$



$
2.3


$



$
25.5Long-term debt and capital lease
    obligations due within one year


1.2







1.0







2.2Trade accounts payable


5.5



37.2



35.1







77.8Advance billings and deposits






17.7



6.7







24.4Accrued and other current
    liabilities


22.6



18.3



41.7







82.6Total current liabilities


52.5



73.2



86.8







212.5Long-term accrued liabilities


173.7



4.1



48.7







226.5Long-term debt


227.2







5.6







232.8Total liabilities


453.4



77.3



141.1







671.8Commitments and contingencies


















Shareholders equity (deficit)4% Cumulative Preferred shares


6.0















6.06% Series B Convertible
    Preferred Stock


116.1















116.1Common shares, $.01 par value


.5



25.4



12.7



(38.1
)


.5Capital in excess of par value


351.1



196.0



56.3



(252.3
)


351.1Contingent warrants


.5















.5Reinvested earnings (accumulated
    deficit)


(381.9
)


(130.6
)


36.3



94.3



(381.9
)Accumulated other comprehensive
    income (loss)


(113.6
)


25.9



(24.0
)


(1.9
)


(113.6
)Total shareholders equity
    (deficit)


(21.3
)


116.7



81.3



(198.0
)


(21.3
)Total liabilities and
    shareholders equity (deficit)

$
432.1


$
194.0


$
222.4


$
(198.0
)

$
650.5  104




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Balance Sheet
  December 31, 2005Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)ASSETSCurrent assetsCash and cash equivalents

$
(.6
)

$
10.8


$
35.5


$



$
45.7Notes and accounts receivable
    (excluding intercompany receivables)


.5



65.0



52.2







117.7Inventories


(.2
)


100.5



60.8







161.1Other current assets


13.0



12.5



18.8







44.3Intercompany receivables (payables)


(354.8
)


241.8



115.3



(2.3
)


Total current assets


(342.1
)


430.6



282.6



(2.3
)


368.8Property, plant and
    equipment  net


1.3



55.9



57.0







114.2Goodwill






53.0



30.7







83.7Investment in subsidiaries


298.1



226.6



(15.8
)


(508.9
)


Intercompany advances 
    net


470.0



(503.0
)


33.0







Other noncurrent assets


33.8



52.2



18.9







104.9Total assets

$
461.1


$
315.3


$
406.4


$
(511.2
)

$
671.6LIABILITIES AND
    SHAREHOLDERS EQUITY (DEFICIT)Current liabilitiesShort-term borrowings

$
2.2


$



$
1.9


$



$
4.1Long-term debt and capital lease
    obligations due within one year


1.1







1.5







2.6Trade accounts payable


6.1



40.6



29.7







76.4Advance billings and deposits






16.1



6.5







22.6Accrued and other current
    liabilities


22.0



23.9



30.4







76.3Total current liabilities


31.4



80.6



70.0







182.0Long-term accrued liabilities


206.9



4.2



50.3







261.4Long-term debt


227.9







5.4







233.3Total liabilities


466.2



84.8



125.7







676.7Commitments and contingencies


















Shareholders equity (deficit)4% Cumulative Preferred shares


6.0















6.06% Series B Convertible
    Preferred Stock


112.9















112.9Common shares, $.01 par value


.5



25.4



12.8



(38.2
)


.5Capital in excess of par value


348.0



316.4



80.3



(396.7
)


348.0Contingent warrants


.5















.5Reinvested earnings (accumulated
    deficit)


(332.8
)


(103.1
)


185.2



(82.1
)


(332.8
)Accumulated other comprehensive
    income (loss)


(140.2
)


(8.2
)


2.4



5.8



(140.2
)Total shareholders equity
    (deficit)


(5.1
)


230.5



280.7



(511.2
)


(5.1
)Total liabilities and
    shareholders equity (deficit)

$
461.1


$
315.3


$
406.4


$
(511.2
)

$
671.6  105




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Cash Flows
  Year Ended December 31, 2006Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Increase (decrease) in cash and
    cash equivalentsOperating activities cash
    flowsNet earnings (loss)

$
(39.7
)

$
(39.7
)

$
(3.9
)

$
43.6


$
(39.7
)Operating activities providing
    (using) cashNet gain on divestiture


(.1
)














(.1
)Depreciation and amortization


.2



10.0



6.6







16.8Refinancing costs


1.8















1.8Restructuring costs


.2



4.6



3.4







8.2Equity in (earnings) losses of
    subsidiaries


80.4



6.8







(87.2
)


Distributions from equity
    subsidiaries






(24.7
)


(18.9
)


43.6



Deferred income taxes


(1.3
)






2.1







.8Working capital changesNotes and accounts receivable


.2



1.4



6.3







7.9Inventories


(.2
)


(5.7
)


1.4







(4.5
)Other current assets


1.9



(.6
)


.8







2.1Trade accounts payable


(.6
)


(3.3
)


2.2







(1.7
)Other current liabilities


(9.9
)


6.8



1.1







(2.0
)Decrease (increase) in other
    noncurrent assets


15.5



.3



(.1
)






15.7Decrease in long-term accrued
    liabilities


(24.0
)


(.1
)


(1.8
)






(25.9
)Other  net


1.8



(.2
)


(.2
)






1.4Net cash provided (used) by
    operating activities


26.2



(44.4
)


(1.0
)






(19.2
)Investing activities cash
    flowsCapital expenditures






(9.1
)


(4.7
)






(13.8
)Net disposals of plant, property
    and equipment






2.1



.8







2.9Net cash used by investing
    activities






(7.0
)


(3.9
)






(10.9
)Financing activities cash
    flowsRepayments of long-term debt


(.5
)






(1.1
)






(1.6
)Increase in short-term borrowings


21.0







.2







21.2Dividends paid


(.2
)














(.2
)Net cash provided (used) by
    financing activities


20.3







(.9
)






19.4Intercompany receivables and
    payables


(21.4
)


22.7



(1.3
)






Intercompany advances


(25.2
)


21.9



3.3







Effect of exchange rate
    fluctuations on cash and cash equivalents






.2



3.3







3.5Decrease in cash and cash
    equivalents


(.1
)


(6.6
)


(.5
)






(7.2
)Cash and cash equivalents at
    beginning of year


(.6
)


10.8



35.5







45.7Cash and cash equivalents at end
    of year

$
(.7
)

$
4.2


$
35.0


$



$
38.5  106




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Cash Flows
  Year Ended December 31, 2005Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Increase (decrease) in cash and
    cash equivalentsOperating activities cash
    flowsNet earnings (loss)

$
(14.0
)

$
56.6


$
4.9


$
(61.5
)

$
(14.0
)Operating activities providing
    (using) cashNet gain on divestiture


(2.5
)














(2.5
)Depreciation and amortization


.1



11.0



7.3







18.4Restructuring costs






1.3



.3







1.6Equity in (earnings) losses of
    subsidiaries


4.7



(52.6
)






47.9



Distributions from equity
    subsidiaries






(13.6
)






13.6



Deferred income taxes


2.7







(3.4
)






(.7
)Working capital changesNotes and accounts receivable


.3



10.0



(.3
)






10.0Inventories






(10.2
)


(4.1
)






(14.3
)Other current assets


1.9



.7



.5







3.1Trade accounts payable


1.0



1.4



(1.3
)






1.1Other current liabilities


(9.5
)


6.6



(5.3
)






(8.2
)Decrease in other noncurrent assets


3.2



.9



2.9







7.0Increase (decrease) in long-term
    accrued liabilities


9.5



(1.2
)


(1.3
)






7.0Other  net


1.3



(2.0
)


1.4







.7Net cash provided (used) by
    operating activities


(1.3
)


8.9



1.6







9.2Investing activities cash
    flowsCapital expenditures


(.5
)


(7.3
)


(4.9
)






(12.7
)Net disposals of plant, property
    and equipment


.3



.2



2.1







2.6Divestitures


.3















.3Net cash provided (used) by
    investing activities


.1



(7.1
)


(2.8
)






(9.8
)Financing activities cash
    flowsRepayments of long-term debt


(.5
)






(4.5
)






(5.0
)Increase (decrease) in short-term
    borrowings


(8.8
)






1.5







(7.3
)Debt issuance costs


(.6
)














(.6
)Costs of 2004 rights offering


(1.1
)














(1.1
)Dividends paid


(6.2
)














(6.2
)Net cash used by financing
    activities


(17.2
)






(3.0
)






(20.2
)Intercompany receivables and
    payables


23.2



(25.0
)


1.8







Intercompany advances


(28.4
)


25.8



2.6







Effect of exchange rate
    fluctuations on cash and cash equivalents






.3



(3.0
)






(2.7
)Increase (decrease) in cash and
    cash equivalents


(23.6
)


2.9



(2.8
)






(23.5
)Cash and cash equivalents at
    beginning of year


23.0



7.9



38.3







69.2Cash and cash equivalents at end
    of year

$
(.6
)

$
10.8


$
35.5


$



$
45.7  107




---



##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidating
    Statement of Cash Flows
  Year Ended December 31, 2004Guarantor


Nonguarantor


Eliminations &Parent


Subsidiaries


Subsidiaries


Other


Milacron Inc.(In millions)Increase (decrease) in cash and
    cash equivalentsOperating activities cash
    flowsNet earnings (loss)

$
(51.8
)

$
(6.5
)

$
(4.2
)

$
10.7


$
(51.8
)Operating activities providing
    (using) cashLoss from discontinued operations






1.3











1.3Net gain on divestiture


(.8
)














(.8
)Depreciation and amortization


.2



12.6



7.5







20.3Refinancing costs


15.8



5.6











21.4Restructuring costs


.1



7.9



5.0







13.0Equity in (earnings) losses of
    subsidiaries


26.8



11.6







(38.4
)


Distributions from equity
    subsidiaries






(12.0
)


(15.7
)


27.7



Deferred income taxes


2.7







6.0







8.7Working capital changesNotes and accounts receivable


.6



(40.1
)


3.4







(36.1
)Inventories


1.1



(2.7
)


.5







(1.1
)Other current assets


4.7



(3.3
)


1.6







3.0Trade accounts payable


3.1



7.2



(1.0
)






9.3Other current liabilities


(13.2
)


(4.8
)


(12.4
)






(30.4
)Decrease in other noncurrent assets


2.3







.7







3.0Increase (decrease) in long-term
    accrued liabilities


(2.9
)


(.8
)


1.8







(1.9
)Other  net


(.5
)






.9







.4Net cash provided (used) by
    operating activities


(11.8
)


(24.0
)


(5.9
)






(41.7
)Investing activities cash
    flowsCapital expenditures






(4.6
)


(4.2
)






(8.8
)Net disposals of plant, property
    and equipment






.3



.3







.6Divestitures


8.0















8.0Net cash provided (used) by
    investing activities


8.0



(4.3
)


(3.9
)






(.2
)Financing activities cash
    flowsIssuance of long-term debt


219.8















219.8Repayments of long-term debt


(115.7
)


(144.7
)


(1.1
)






(261.5
)Increase (decrease) in short-term
    borrowings


69.0







(.5
)






68.5Issuance of common shares


25.2















25.2Debt issuance costs


(27.8
)














(27.8
)Dividends paid


(3.3
)














(3.3
)Net cash provided (used) by
    financing activities


167.2



(144.7
)


(1.6
)






20.9Intercompany receivables and
    payables


(8.1
)


6.3



1.8







Intercompany advances


(159.0
)


164.3



(5.3
)






Effect of exchange rate
    fluctuations on cash and cash equivalents






.2



1.4







1.6Cash flows of discontinued
    operationsOperating activities






(4.1
)










(4.1
)Investing activities






(.1
)










(.1
)Total cash flows of discontinued
    operations






(4.2
)










(4.2
)Decrease in cash and cash
    equivalents


(3.7
)


(6.4
)


(13.5
)






(23.6
)Cash and cash equivalents at
    beginning of year


26.7



14.3



51.8







92.8Cash and cash equivalents at end
    of year

$
23.0


$
7.9


$
38.3


$



$
69.2  108




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               Ernst &
    Young LLP
    109




---



##### Table of Contents



Operating
    Results by Quarter (Unaudited)
  2006Qtr 1


Qtr 2


Qtr 3


Qtr 4(In millions, except per-share amounts)Sales

$
202.4


$
211.1


$
209.1


$
197.5Manufacturing margins


33.6



40.3



39.2



38.3Percent of sales


16.6
%


19.1
%


18.7
%


19.4
%Loss from continuing operations(a)


(9.6
)


(14.3
)


(7.2
)


(8.7
)Per common share Basic


(.25
)


(.34
)


(.20
)


(.23
)Diluted


(.25
)


(.34
)


(.20
)


(.23
)Discontinued operations














.1Per common share Basic














Diluted














Net loss(a)


(9.6
)


(14.3
)


(7.2
)


(8.6
)Per common share Basic


(.25
)


(.34
)


(.20
)


(.23
)Diluted


(.25
)


(.34
)


(.20
)


(.23
)   2005Qtr 1


Qtr 2


Qtr 3


Qtr 4Sales

$
192.3


$
208.8


$
190.7


$
217.1Manufacturing margins


32.2



37.8



33.4



42.4Percent of sales


16.7
%


18.1
%


17.5
%


19.5
%Earnings (loss) from continuing
    operations(b)(c)


(9.1
)


(4.4
)


(7.6
)


4.6Per common share Basic


(.22
)


(.12
)


(.20
)


.06Diluted


(.22
)


(.12
)


(.20
)


.04Discontinued operations






.6



.7



1.2Per common share Basic






.01



.02



.03Diluted






.01



.02



.01Net earnings (loss)(b)(c)


(9.1
)


(3.8
)


(6.9
)


5.8Per common share Basic


(.22
)


(.11
)


(.18
)


.09Diluted


(.22
)


(.11
)


(.18
)


.05     (a)
    
    Includes restructuring and refinancing charges of
    $.6 million in the first quarter, $8.8 million in the
    second quarter, $2.9 million in the third quarter and
    $6.9 million in the fourth quarter, in all cases, with no
    tax benefit.(b)
    
    Includes restructuring charges of $.4 million in the first
    quarter, $.3 million in the second quarter and
    $.1 million in the third quarter (in all cases, with no tax
    benefit) and $.8 million in the fourth quarter
    ($.7 million after tax).(c)
    
    In the fourth quarter of 2005, includes an income tax benefit of
    $7.6 million that resulted from a waiver of intercompany
    notes receivable by the companys Dutch subsidiary.
    Including this amount, the net benefit for income taxes for the
    fourth quarter was $5.6 million. 110




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rule 13a-15(b)
  Internal
    Control Over Financial Reporting
  Rule 13a-15(f) 15d-15(f)
    
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the issuer;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the company are being made
    only in accordance with authorizations of management and
    directors of the company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    companys assets that could have a material effect on the
    financial statements.        Changes
    in Internal Control Over Financial Reporting
   111




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 Ernst &
    Young LLP
    112




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K
  Audit
    Committee Financial Literacy and Financial Experts
        Code of
    Ethics
    45206-2425
  Other
    Corporate Governance Matters
    45206-2425
 113




---



##### Table of Contents



Form 10-K
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
  Equity
    Compensation Plan Information
  Number of SecuritiesRemaining Available forNumber of Securities to be





Future Issuance Under EquityIssued Upon Exercise of


Weighted-Average Exercise


Compensation Plans [c]Outstanding Options,


Price of Outstanding Options,


(Excluding SecuritiesPlan Category

Warrants and Rights [a]


Warrants and Rights[b]


Reflected in Column[a])Equity compensation plans not
    approved by security holders










Equity compensation plans approved
    by security holders


2,747,900


$
18.27



4,757,017Total


2,747,900


$
18.27



4,757,017   Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   114




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services    Principal
    Accountant Fees and Services
  2006


2005Audit Fees(a)

$
4,185,000


$
4,024,000Audit-related fees






Tax fees(b)


353,000



450,000All other fees






Total

$
4,538,000


$
4,474,000     (a)
    
    For services related to the annual audit of the companys
    consolidated financial statements (including statutory audits of
    subsidiaries or affiliates of the company), quarterly reviews of
    Forms 10-Q,
    issuance of the attestation on the companys internal
    controls over financial reporting and issuance of consents.(b)
    
    For services related to tax compliance, tax return preparation
    and tax planning.   PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules Item 15(a)
    (1) & (2)  List of Financial Statements
    and Financial Statement Schedules.    PageConsolidated
    Statements of Operations  2006, 2005 and
    2004


49Consolidated
    Balance Sheets  2006 and 2005


50Consolidated
    Statements of Comprehensive Income (Loss) and Shareholders
    Equity (Deficit)  2006, 2005 and 2004


51Consolidated
    Statements of Cash Flows  2006, 2005 and
    2004


52Notes to
    Consolidated Financial Statements


53Report of
    Independent Registered Public Accounting Firm


109Supplementary Financial Information


110     Schedule II 
    Valuation and Qualifying Accounts and Reserves


122    115




---



##### Table of Contents



Item 15(a)(3) 
    List of Exhibits
  Exhibit No.



Page2
.

Plan of Acquisition,
    Reorganization, Arrangement, Liquidation, or
    Succession  not applicable.3
.

Articles of Incorporation and
    By-Laws.3
.1

Restated Certificate of
    Incorporation of Milacron Inc. Incorporated by
    reference to the companys
    Form S-8
    filed on June 11, 20043
.2

Certificate of Designation of 6.0%
    Series B Convertible Preferred Stock of Milacron Inc.  Incorporated by
    reference to the companys
    Form S-8
    filed on June 11, 20043
.3

Amended and restated By-Laws of
    Milacron Inc. Incorporated by
    reference to the companys
    Form S-8
    filed on June 11, 20044
.

Instruments Defining the Rights of
    Security Holders, Including Indentures:4
.1

Indenture dated as of May 26,
    2004, between Milacron Escrow Corporation, to be merged with and
    into Milacron Inc., and U.S. Bank National Association, as
    trustee, relating to the
    111/2% Senior
    Secured Notes due 2011 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.2

Supplemental Indenture dated as of
    June 10, 2004, among Milacron Inc., the Guaranteeing
    Subsidiaries named therein and U.S. Bank National
    Association, as trustee, relating to the
    111/2% Senior
    Secured Notes due 2011 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.3

Form of
    111/2% Senior
    Secured Notes due 2011 (included in Exhibit 4.1)4
.4

Registration Rights Agreement
    dated as of May 26, 2004, between Milacron Escrow
    Corporation and Credit Suisse First Boston LLC, as
    representative of the several purchasers listed therein,
    relating to the
    111/2% Senior
    Secured Notes due 2011 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.5

Joinder to the Registration Rights
    Agreement dated June 10, 2004 by Milacron Inc. and the
    Guarantors listed therein Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.6

Security Agreement dated
    June 10, 2004, made by each of the Grantors listed therein
    in favor of U.S. Bank National Association Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.7

Security Agreement (Canada) dated
    June 10, 2004, made by each of the Grantors listed therein
    in favor of U.S. Bank National Association Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.8

Pledge and Security Agreement
    dated June 10, 2004, made by each of the Pledgors listed
    therein in favor of U.S. Bank National Association Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.9

Intercreditor Agreement dated as
    of June 10, 2004, by and between JPMorgan Chase Bank and
    U.S. Bank National Association, acknowledged by Milacron
    Inc. and the subsidiaries of Milacron Inc. listed therein Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899) 116




---



##### Table of Contents



Exhibit No.



Page4
.10

Mortgage, Assignment of Leases and
    Rents, Security Agreement and Fixture Filing made by D-M-E
    Company in favor of U.S. Bank National Association
    (1975 N. 17th Avenue, Melrose Park, Illinois
    60160), dated as of June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.11

Mortgage made by D-M-E U.S.A. Inc.
    in favor of U.S. Bank National Association (6328 Ferry
    Avenue, Charlevoix, Michigan 49720), dated as of June 10,
    2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.12

Mortgage made by D-M-E U.S.A. Inc.
    in favor of U.S. Bank National Association (29215
    Stephenson Highway, Madison Heights, Michigan 48071) dated as of
    June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.13

Mortgage made by Oak
    International, Inc. in favor of U.S. Bank National
    Association (1160 White Street, Sturgis, Michigan 49091), dated
    as of June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.14

Mortgage made by Milacron
    Industrial Products, Inc. in favor of U.S. Bank National
    Association (31003 Industrial Road, Livonia, Michigan 48150),
    dated as of June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.15

Mortgage made by D-M-E U.S.A. Inc.
    in favor of U.S. Bank National Association (29111
    Stephenson Highway, Madison Heights, Michigan 48071), dated as
    of June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.16

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    D-M-E Company in favor of U.S. Bank National Association
    (558 Leo Street, Dayton, Ohio 45404) dated as of June 10,
    2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.17

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    Milacron Inc. in favor of U.S. Bank National Association
    (418 West Main Street, Mount Orab, Ohio 45154) dated as of
    June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.18

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    Milacron Inc. in favor of U.S. Bank National Association
    (3000 Disney Street, Cincinnati, Ohio 45209) dated as of
    June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.19

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    Milacron Inc. in favor of U.S. Bank National Association
    (3010 Disney Street, Cincinnati, Ohio 45209) dated as of
    June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)4
.20

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    D-M-E Company in favor of U.S. Bank National Association
    (977 Loop Road, Lewistown, Pennsylvania) dated as of
    June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899) 117




---



##### Table of Contents



Exhibit No.



Page4
.21

Open-End Mortgage, Assignment of
    Leases and Rents, Security Agreement and Fixture Filing made by
    D-M-E Company in favor of U.S. Bank National Association
    (70 East Hills Street, Youngwood, Pennsylvania 15697) dated as
    of June 10, 2004 Incorporated by
    reference to the companys
    Form S-4
    filed on June 25, 2004 (Registration
    No. 333-116899)9
.

Voting Trust
    Agreement   not applicable10
.

Material Contracts:10
.1

Milacron Supplemental Pension
    Plan, as amended Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 199910
.2

Milacron Supplemental Retirement
    Plan, as amended Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 199910
.3

Milacron Supplemental Executive
    Retirement Plan, as amended Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200210
.4

Milacron Supplemental Retirement
    Plan Amended and Restated Trust Agreement by and between
    Milacron Inc. Reliance Trust Company Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended June 30, 200410
.5

Milacron Supplemental Executive
    Pension Plan Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 199910
.6

Milacron Kunststoffmaschinen
    Europa GmbH Pension Plan for Senior Managers and Executives Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200410
.7

Milacron Compensation Deferral
    Plan, as amended Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 199910
.8

Milacron Compensation Deferral
    Plan, as amended February 26, 2004 Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.9

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, 199910
.10

Milacron Inc. Executive Life
    Insurance Plan Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200410
.11

Form of Tier I Executive Severance
    Agreement applicable to R. D. Brown Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.12

Form of Tier II Executive
    Severance Agreement applicable to D. E. Lawrence and H. C.
    ODonnell Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.13

Form of Tier II Executive
    Severance Agreement applicable to K. Bourdon and R. C. McKee Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 2004 118




---



##### Table of Contents



Exhibit No.



Page10
.14

Amendment to Tier 1 Executive
    Severance Agreement with R. D. Brown and Tier II Executive
    Severance Agreements with R. P. Lienesch and H. C.
    ODonnell dated as of February 10, 2004 Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.15

Temporary Enhanced Severance Plan
    applicable to R. D. Brown, R. P. Lienesch and H. C.
    ODonnell Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.16

Award Letter re. Temporary
    Enhanced Severance Plan to R. D. Brown Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.17

Award Letter re. Temporary
    Enhanced Severance Plan to R. P. Lienesch Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.18

Award Letter re. Temporary
    Enhanced Severance Plan to H. C. ODonnell Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200310
.19

Award Letter re. Temporary
    Enhanced Severance Plan to R. C. McKee Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200410
.20

Employment Agreement with
    Karlheinz Bourdon dated March 30, 2005 Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200410
.21

Settlement Agreement between
    Ferromatik Milacron Maschinenbau GmbH and Karlheinz Bourdon Filed herewith10
.22

Executive Medical Expense
    Reimbursement Plan, Amended as of July 29, 2004 Incorporated by
    reference to the companys
    Form 10-Q
    for the quarter ended September 30, 200410
.23

Milacron Inc. 2002 Short-Term
    Incentive Plan, as amended February 23, 2006 Incorporated by
    reference to the companys
    Form 8-K
    filed March 1, 200610
.24

Milacron Inc. 1994 Long-Term
    Incentive Plan, as amended November 2, 2006 Filed herewith10
.25

Milacron Inc. 1997 Long-Term
    Incentive Plan, as amended November 2, 2006 Filed herewith10
.26

Milacron Inc. 2004 Long-Term
    Incentive Plan, as amended November 2, 2006 Filed herewith10
.27

Cash Flow Improvement Award
    Agreement Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year10
.28

Form of Performance Based
    Restricted Shares Award Agreement Incorporated by
    reference to the companys
    Form 8-K
    filed on February 17, 200510
.29

Form of Restricted Shares Award
    Agreement Incorporated by
    reference to the companys
    Form 8-K
    filed on February 17, 200510
.30

Form of Restricted Stock Agreement Incorporated by
    reference to the companys
    Form 8-K
    filed on February 23, 200610
.31

Form of Notice of Award of
    Deferred Shares for Directors 119




---



##### Table of Contents



Exhibit No.



Page Incorporated by
    reference to the companys
    Form 8-K
    filed on February 17, 200510
.32

Form of Notice of Common Stock
    Credit Incorporated by
    reference to the companys
    Form 8-K
    filed on February 23, 200610
.33

Form of Phantom Share
    Account Agreement Performance Incorporated by
    reference to the companys
    Form 8-K
    filed on February 17, 200510
.34

Form of Phantom Share
    Account Agreement Incorporated by
    reference to the companys
    Form 8-K
    filed on February 17, 200510
.35

Form of Phantom Share
    Account Agreement Incorporated by
    reference to the companys
    Form 8-K
    filed on February 23, 200610
.36

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 year10
.37

Milacron Inc. Director Deferred
    Compensation Plan, as amended November 2, 2006 Filed herewith10
.38

Milacron Inc. Retirement Plan for
    Non-Employee Directors, as amended Incorporated by
    reference to the companys
    Form 10-K
    for the for the fiscal year ended December 31, 1998 (File
    No. 001-08485)10
.39

Milacron Retirement Plan for
    Non-Employee Directors, as amended February 10, 2004 Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.40

Rights Agreement dated as of
    February 5, 1999, between Milacron Inc. and ChaseMellon
    Shareholder Services, LLC, as Rights Agent Incorporated by
    reference to the companys Registration Statement on
    Form 8-A
    (File No. 001-08485)10
.41

Amendment No. 1 to Rights
    Agreement dated as of March 11, 2004 among Milacron Inc.
    and Mellon Investor Services LLC Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.42

Amendment No. 2 to Rights
    Agreement dated as of June 9, 2004 among Milacron Inc. and
    Mellon Investor Services LLC Incorporated by
    reference to the companys
    Form S-1
    filed on June 25, 2004 (Registration
    No. 333-116892)10
.43

Credit Agreement dated as of
    December 19, 2006 by and among Milacron Inc. and certain
    subsidiaries as Borrowers, certain subsidiaries as guarantors
    (or Canadian Borrowing Base Guarantors), the lenders party
    thereto and General Electric Capital Corporation, as
    administrative agent for the Lenders Incorporated by
    reference to the companys
    Form 8-K
    dated December 19, 200610
.44

Registration Rights Agreement
    dated as of March 12, 2004 among Milacron Inc., Glencore
    Finance AG and Mizuho International plc Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.45

Note Purchase Agreement dated as
    of March 12, 2004 among Milacron Inc., Glencore Finance AG
    and Mizuho International plc Incorporated by
    reference to the companys
    Form 10-K
    for the fiscal year ended December 31, 200310
.46

Letter Amendment to Note Purchase
    Agreement dated April 5, 2004 among Milacron Inc., Glencore
    Finance AG and Mizuho International plc Incorporated by
    reference to the companys
    Form S-1
    filed on June 25, 2004 (Registration
    No. 333-116892) 120




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##### Table of Contents



Exhibit No.



Page10
.47

Letter Amendment to Note Purchase
    Agreement dated June 7, 2004 among Milacron Inc., Glencore
    Finance AG and Mizuho International plc Incorporated by
    reference to the companys
    Form S-1
    filed on June 25, 2004 (Registration
    No. 333-116892)10
.48

Contingent Warrant Agreement dated
    March 12, 2004 by and among Milacron Inc., Glencore Finance
    AG and Mizuho International plc Incorporated by
    reference to the companys
    Form S-1
    filed on June 25, 2004 (Registration
    No. 333-116892)11
.

Statement Regarding Computation of
    Per-Share Earnings15
.

Letter Regarding Unaudited Interim
    Financial Information  not applicable18
.

Letter Regarding Change in
    Accounting Principles19
.

Report Furnished to Security
    Holders  not applicable21
.

Subsidiaries of the Registrant22
.

Published Report Regarding Matters
    Submitted to Vote of Security Holders  not applicable23
.

Consent of Experts and
    Counsel24
.

Power of Attorney  not
    applicable31
.

Certifications pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002:31
.1.

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act31
.2.

Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act32
.

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200299
.

Additional Exhibits 
    not applicable     Item 15
    (b)  Index to Certain Exhibits and Financial
    Statement Schedules Filed Herewith
  Exhibit 11

Statement Regarding Computation of
    Per-Share EarningsExhibit 21

Subsidiaries of the RegistrantExhibit 23

Consent of Experts and CounselExhibit 31.1

Certification pursuant to
    Section 302 of the Sarbanes-Oxley ActExhibit 31.2

Certification pursuant to
    Section 302 of the Sarbanes-Oxley ActExhibit 32

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002  121




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##### Table of Contents



MILACRON
    INC. AND SUBSIDIARIESSCHEDULE II  VALUATION AND
    QUALIFYING ACCOUNTS AND RESERVESYears Ended 2006, 2005 and 2004
   Col. A

Col. B


Col. C


Col. D


Col. EAdditionsBalance at


Charged to








BalanceBeginning


Cost and


Other


Deductions


at EndDescription

of Period


Expenses


-Describe (a)


-Describe


of Period(In thousands)Year ended 2006Allowance for doubtful accounts

$
9,038


$
1,628


$
538


$
(3,862
)(b)

$
7,342Restructuring and consolidation
    reserves

$
1,384


$
9,934


$
181
(a)

$
(7,482
)(b)

$
3,926121
(d)


(212
)(c)Allowance for inventory
    obsolescence

$
26,381


$
4,650


$
1,805


$
(5,583
)(b)

$
27,253Year ended 2005Allowance for doubtful accounts

$
12,060


$
2,804


$
(812
)

$
(5,014
)(b)

$
9,038Restructuring and consolidation
    reserves

$
2,838


$
485


$
(190
)

$
(1,670
)(b)

$
1,384(79
)(c)Allowance for inventory
    obsolescence

$
29,708


$
1,352


$
(2,146
)

$
(2,533
)(b)

$
26,381Year ended 2004Allowance for doubtful accounts

$
15,087


$
1,742


$
327


$
(5,096
)(b)

$
12,060Restructuring and consolidation
    reserves

$
6,505


$
2,698


$
69


$
(6,235
)(b)

$
2,838(199
)(c)Allowance for inventory
    obsolescence

$
27,007


$
7,393


$
1,488


$
(6,180
)(b)

$
29,708     (a)
    
    Represents foreign currency translation adjustments during the
    year.(b)
    
    Represents amounts charged against the reserves during the year.(c)
    
    Represents reversals of excess reserves.(d)
    
    Represents reclassifications from other accounts and refunds of
    amounts previously expensed and paid. 122




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##### Table of Contents



SIGNATURES    Milacron Inc.
  By:
    /s/  Ronald
    D. Brown  Ronald D. Brown;
 Chairman, President and Chief Executive Officer,
 Director (Chief Executive Officer)
  By:
    /s/  Ross
    A. Anderson  Ross A. Anderson;
 Senior Vice President  Finance and Chief
    Financial
 Officer (Chief Financial Officer)
  By:
    /s/  Danny
    L. Gamez  Danny L. Gamez;
 Controller
 (Chief Accounting Officer)
      Sallie
    B. Bailey; March   , 2007(Director)

Milos
    Brajovic; March   , 2007(Director)/s/  David
    L. BurnerDavid
    L. Burner;  March 9, 2007(Director)

/s/  H.
    Christopher
    DeCotiisH.
    Christopher DeCotiis; March 9, 2007(Director)/s/  Steven
    N. IsaacsSteven
    N. Isaacs; March 9, 2007(Director)

/s/  Donald
    R. McIlnayDonald
    R. McIlnay; March 9, 2007(Director)/s/  Mark
    L. SegalMark
    L. Segal; March 9, 2007(Director)

/s/  Dr. Joseph
    A. StegerDr. Joseph
    A. Steger; March 9, 2007(Director)/s/  Duane
    K. StullichDuane
    K. Stullich; March 9, 2007(Director)

/s/  Charles
    F.C. TurnerCharles
    F.C. Turner; March 9, 2007(Director)/s/  Larry
    D. YostLarry
    D. Yost; March 9, 2007(Director)  123