TABLE OF CONTENTS




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|PART I  
|         | Item 1. Business                                                                            
|         | Item 2. Properties                                                                          
|         | Item 3. Legal Proceedings                                                                   
|         | Item 4. Submission of Matters to a Vote of Security Holders                                 
|PART II 
|         | Item 5. Market for the Registrants Common Equity and Related Stockholder Matters           
|         | Item 6. Selected Financial Data                                                             
|         | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|PART III
|         | Item 10. Directors and Executive Officers of the Registrant                                 
|         | Item 11. Executive Compensation                                                             
|         | Item 12. Security Ownership of Certain Beneficial Owners and Management                     
|         | Item 13. Certain Relationships and Related Transactions                                     
|PART IV 
|         | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                    
|         | Signatures                                                                                  







SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

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

|                                             |  |                               
|-------------------------------------------- |  | ------------------------------
|For the Fiscal Year Ended
	December 31, 1999 |  | Commission File Number
	1-8485

MILACRON INC.

2090 Florence Avenue


Cincinnati, Ohio 45206


(513) 487-5000


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



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

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

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed
Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the
 past 90 days.

Yes 
[X]         No 
 [   ]

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

The aggregate market value of voting stock held by
 non-affiliates of the registrant is $460,172,944 at
February 28, 2000.*

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

Number of shares of Common Stock, $1.00 par value,
 outstanding as of February 28, 2000:  36,194,275

Documents Incorporated by Reference:

PART III  Proxy statement, dated
March 24, 2000




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Milacron Inc.





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|PART I   |  |                                                                                        |  |     
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|Item 1   |  | Business                                                                               |  |      | 3  | 
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|         |  | Executive Officers of the Registrant                                                   |  |      | 16 | 
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|Item 2   |  | Properties                                                                             |  |      | 17 | 
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|Item 3   |  | Legal Proceedings                                                                      |  |      | 17 | 
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|Item 4   |  | Submission of Matters to a Vote of Security Holders                                    |  |      | 17 | 
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|PART II  |  |                                                                                        |  |     
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|Item 5   |  | Market for the Registrants Common Equity and Related
	Stockholder Matters             |  |      | 17 | 
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|Item 6   |  | Selected Financial Data                                                                |  |      | 18 | 
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|Item 7   |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |  |      | 19 | 
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|Item 7A  |  | Qualitative and Quantitative Disclosures About Market Risk                             |  |      | 26 | 
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|Item 8   |  | Financial Statements and Supplementary Data                                            |  |      | 26 | 
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|Item 9   |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |  |      | 49 | 
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|PART III |  |                                                                                        |  |     
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|Item 10  |  | Directors and Executive Officers of the Registrant                                     |  |      | 49 | 
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|Item 11  |  | Executive Compensation                                                                 |  |      | 49 | 
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|Item 12  |  | Security Ownership of Certain Beneficial Owners and Management                         |  |      | 49 | 
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|Item 13  |  | Certain Relationships and Related Transactions                                         |  |      | 49 | 
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|PART IV  |  |                                                                                        |  |     
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|Item 14  |  | Exhibits, Financial Statement Schedules and Reports on Form 
	 8-K                     |  |      | 49 | 
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|         |  | Schedule II - Valuation and Qualifying Accounts and
	Reserves                          |  |      | 52 | 
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|         |  | Signatures                                                                             |  |      | 53 | 
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|         |  | Index to Certain Exhibits and Financial Statement Schedules                            |  |      | 54 | 

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PART I




Item 1.   Business


General

Milacron is a major global supplier of machines,
tooling, supplies and services to a broad spectrum of plastics
processing and metalworking industries. We like to say that our
technologies help the worlds leading companies make
the worlds favorite products.


Incorporated in Delaware in 1983, we are the
successor to a business first established in 1884. Throughout
most of our history, our primary business was machine tools.
Since the early 1990s, however, two other segments,
plastics technologies and metalworking technologies, have grown
much more rapidly. In late 1998, therefore, we sold our legacy
machine tools business, which at the time accounted for less than
 one-fourth of our sales, in order to concentrate our resources
on our more profitable businesses.

In our plastics technologies business, we
manufacture and sell machines, systems, mold bases, tooling,
parts and services for the three primary methods of processing
plastic: injection molding, blow molding and extrusion. All of
our machines are computer controlled and many are sold with
proprietary advanced application software. In our metalworking
technologies business, we produce and sell a wide variety of
consumable products for metalworking, including high-speed steel
and carbide cutting tools, tool holding systems, synthetic and
oil-based fluids and grinding wheels, as well as carbide wear
parts and industrial magnets.

From 1992 to 1999, our consolidated sales from
continuing operations have grown at a compound annual rate of
22%, from $410 million to over $1.6 billion. We have achieved
this growth through strategic acquisitions, internally developed
new products and expanded distribution channels. In 1999, 56% of
our sales came from plastics technologies and 44% from our
metalworking technologies segment. Approximately 34% of our sales
 consisted of capital goods  all plastics
machinery  while durable and consumable goods
accounted for most of the remainder.

Milacron sells products and provides services to
industrial customers throughout the world. Sales to customers
outside the U.S. increased from $206 million in 1993,
representing 31% of total sales, to $720 million in 1999, or 44%
of total sales. We have been successful in penetrating
international markets through acquisitions, expanded
distribution, increased exports, and license and joint venture
agreements. We believe our current geographic sales balance helps
 compensate for varying economic cycles around the world and that
 our increased presence outside the U.S. reduces our dependence
upon the U.S. economy. (See Presence Outside the U.S.
 in Item 7: Managements Discussion and Analysis of
Financial Condition and Results of Operations)

Strategic Acquisitions and Divestitures

Milacron continually explores acquisition,
divestiture and consolidation opportunities when we believe such
actions can expand markets, enhance product synergies or improve
earnings potential for the long term. Over the last seven years,
we have completed nineteen strategic acquisitions, which we
believe will increase our potential for further growth. We expect
 to continue to identify opportunities for acquisitions in the
future and to pursue those opportunities that meet the criteria
discussed above.


In our plastics technologies segment, we acquired
FM Maschinenbau GmbH (Ferromatik), an injection molding machine
business, from Kloeckner-Werke AG in 1993; The Fairchild
Corporations D-M-E business (D-M-E) in 1996; and the Uniloy
 plastics machinery division of Johnson Controls, Inc. in 1998.

Ferromatik is one of Europes leading
manufacturers of plastics injection molding machines.
Ferromatiks market coverage expanded our plastics
processing technology base and product line and enabled us to
achieve our objective of establishing a plastics machinery
manufacturing and distribution base in Germany to serve Europe
and other markets.

D-M-E is the largest U.S. producer of mold bases,
components and supplies for the plastic injection moldmaking
industry. D-M-E serves customers throughout much of the world
with ten manufacturing facilities, plus several international
joint venture operations. We believe D-M-E will continue to
enhance our plastics technologies business because it provides
the mold bases, supplies and components used in the mold
apparatus inside an injection molding machine. D-M-E is the U.S.
market leader with a well-established reputation for high
quality.

On September 30, 1998, we acquired the assets
 of Uniloy for approximately $204 million, including post-closing
 adjustments. Uniloy, which is known for its Uniloy brand of
equipment, as well as various other brands, is one of the
worlds leading providers of blow molding machines, as well
as structural foam systems, aftermarket parts, services and molds
 for blow molding. As discussed below, in the third quarter of
1999, we implemented a plan to consolidate Uniloys European
 operations in a new headquarters near Milan, Italy.

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In 1998 and 1999, Milacron made five smaller
acquisitions in the plastics technologies segment. In February,
1998, we acquired Wear Technology, with annual sales of
approximately $10 million, which serves the aftermarket for new
and rebuilt screws for PVC (poly vinyl chloride) extrusion
systems. Also in February, 1998, we acquired Northern Supply, a
regional catalog distribution company with annual sales of
approximately $5 million, offering supplies to plastics
processors for injection molding, blow molding and extrusion. In
May, 1998, we acquired Autojectors, Inc., a leading U.S. producer
 of vertical insert injection molding machinery widely used to
make medical, electrical and automotive components. With annual
sales of approximately $20 million, Autojectors has operated
through two manufacturing facilities near Fort Wayne, Indiana,
one of which was closed late in 1999 to improve operating
efficiency. In September, 1998, we acquired Master Unit Die
Products, Inc., the leading North American manufacturer of
quick-change mold bases for the plastics industry. Master Unit
Die Products has annual sales of approximately $10 million.

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

In the last seven years, Milacron has also made
various strategic acquisitions in its metalworking technologies
segment: GTE Valenite Corporation (Valenite); Krupp Widia GmbH
(Widia); Talbot Holdings, Ltd. (Talbot); Minnesota Twist Drill;
Data Flute CNC, Inc.; and Werkzeugfabrik GmbH Königsee
(Werkö), all of which manufacture and sell metalcutting and
metalworking tools. We believe that Milacron is now the
second-largest North American and third-largest worldwide
producer of carbide metalcutting tool systems.

Valenite was acquired in February, 1993. With
principal operations in North America, it is a leading producer
of consumable industrial metalcutting tools. Widia was acquired
in February, 1995. It is one of the worlds leading
producers of industrial metalcutting products. Widias
strong presence in Europe and India complements Valenites
strengths in the North American and Japanese markets. Widia also
enhanced our technological base, diversified our product line and
 expanded our worldwide sales and distribution network. In 1995,
Milacron implemented an integration plan to achieve certain
synergies between Valenite and Widia worldwide. In 1998, we began
 managing the Valenite and Widia carbide insert and steel insert
holder businesses on a global basis and with a new brand name,
WidiaValenite. The benefits of common tooling brands include
reduced design, manufacturing and marketing costs, higher
inventory turnover, improved capacity utilization, and
simultaneous product introductions around the world.

We acquired Talbot in July, 1995, a major supplier
 of round high-speed steel taps and end mills. These cutting
tools, which are not produced by either Valenite or Widia, are
sold through independent distributors and a direct sales force.
The Talbot acquisition enabled us to increase our product
coverage from approximately 40% to 65% of the types of cutting
tools consumed by the world market.

In September, 1997, we acquired Minnesota Twist
Drill, Inc., a manufacturer of standard high-speed steel drills
which are sold mainly through private branding. Also, in June,
1997, we acquired Data Flute CNC, Inc., a manufacturer of
high-performance solid carbide end mills. Both businesses, with
sales of approximately $10 million each, have been integrated
with Talbot.

On December 30, 1998, we acquired Werkö,
 a manufacturer of high-speed steel drills and taps. Located in
eastern Germany, Werkö has annual sales of approximately $25
 million. We believe it is the third largest European producer of
 high-speed steel drills.

In 1999, we acquired two additional businesses
that have metalworking fluids as their primary products, thereby
complementing our metalcutting tools and abrasives product
offerings. In August, we acquired Producto Chemical, Inc.
(Producto), which manufactures process cleaners, washers,
corrosion inhibitors and specialty products for metalworking.
Producto has annual sales approaching $5 million. In September,
we acquired Oak International, Inc. (Oak), a supplier of
lubricants and process cleaners used in metalforming and
metalworking. Oak has two manufacturing plants in the U.S. and
one in the U.K. and has annual sales approaching $12 million.

Also in 1999, we acquired the respected Micro
Carbide product line, which extended by 50% our capabilities and
product offerings in the carbide round tool market. Micro Carbide
 tools, now produced at our Data Flute CNC facility, add carbide
reamers, step drills and miniature tools to our product mix.

In addition to our 1998 machine tool divestiture,
in December, 1995 we sold our Electronic Systems Division (ESD).
Milacron continues to develop and maintain our own applications
software. The decision to sell ESD was made to redeploy assets to
 more strategic businesses.

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Additionally, we sold our European plastics
extrusion machinery business in December, 1999. Headquartered in
Vienna, Austria, the business had sales to unaffiliated customers
 of approximately $62 million in 1999, principally to markets in
Europe, Asia and South America. The business was sold to redeploy
 assets to more strategic businesses. We will continue to operate
 our North American extrusion machinery business, which is
headquartered in southwest Ohio and serves markets in the U.S.,
Canada and Central America.

Cost Cutting and Efficiency Initiatives

In operating our businesses, we continually search
 for opportunities to reduce our operating costs and improve the
efficiency of our operations. In the second half of 1999, we
announced two major initiatives in this area. First, we
implemented a plan to consolidate Uniloys European blow
molding operations in a new manufacturing facility located near
Milan, Italy. The plan involves the closure of three plants in
Florence and Milan, Italy and Berlin, Germany and the transfer of
 the manufacturing and assembly operations at those plants to the
 new, more modern facility near Milan and to another existing
plant located in the Czech Republic. The consolidation, which is
expected to be completed by September 30, 2000, will not
adversely affect future sales revenues but is expected to result
in annual pretax cost savings of approximately $3 million.


In December, 1999, we implemented a second plan to
 improve operating efficiency and reduce costs at additional
businesses. The actions contemplated by the plan involve both
segments operations in North America and Europe. The plan
involves the closure of four smaller manufacturing facilities,
the operations of which will be transferred to other locations,
and the elimination of approximately 300 manufacturing and
administrative positions worldwide. The total cost of the plan,
which is expected to be completed by the end of 2000, will be
approximately $21 million. Completion of the plan is expected to
result in annual pretax cost savings of more than $20 million
which will phase in during 2000 and be fully realized in 2001.

The above actions are in addition to the cost
reduction actions in prior years that are discussed above. We
also reduced total selling and administrative expense from 17.9%
of sales in 1998 to 16.8% in 1999.

Product Development and Capital Expenditures

As part of our objective to enhance
Milacrons growth potential and global competitiveness, we
continue to invest in research and development and in new capital
 equipment. Research and development investment in 1999 totaled
$34.5 million, or 2.1% of sales. Research and development expense
 totaled $36.7 million in 1998 and $35.6 million in 1997. In
1999, we invested over $47 million for capital additions,
primarily to install advanced technology and increase
productivity throughout our operations worldwide. Additional
assets having a value of $7 million were financed through
operating leases. For 2000, we are budgeting an additional $65
million in capital expenditures.


To enhance our research and development effort, we
 have maintained a major program for product development, process
 improvement and modernization. This program is named
Wolfpack because of its emphasis on teamwork and
fierce competitiveness. The objectives of Wolfpack are to design
and produce new products at world-competitive levels of quality,
performance, efficiency and cost. Substantially all of
Milacrons current plastics technologies machine designs
have been developed using the Wolfpack methodology.

Plastics Technologies Business

We believe Milacron is the largest and
broadest-line U.S. producer of plastics machinery and one of the
three largest in the world, as well as the largest U.S. producer
of mold bases, standard components and supplies for the
moldmaking industry. In 1999, Milacrons plastics
technologies segments sales were $904 million. Our plastics
 technologies business sells plastics machinery and supplies for
processing plastics to manufacturers in several key industries,
including packaging, construction, consumer goods, automotive,
electronics and medical. We believe Milacron offers more
varieties of machinery to process plastic than any other U.S.
company.


One of our strengths in the plastics machinery
business is that we offer complete lines of machines for three
major plastics processing technologies: injection molding and
systems for extrusion and blow molding. Another strength is our
presence in the durable goods market with the production of mold
bases, standard components and supplies for the moldmaking
industry. Milacron also sells specialty auxiliary equipment for
plastics processing and rebuilds and retrofits older injection
molding equipment manufactured by Milacron or others.

We distribute most of our plastics machinery
products through a combination of a direct sales force and
independent agents who are geographically spread throughout our
key markets. We sell our mold bases, supplies and components
through a direct distribution network in the U.S. and Europe and
through a large network of joint venture sales and service
offices in Asia.

Our plastics technologies businesses sell products
 primarily in North America and Europe. Approximately 15% of the
groups 1999 sales were to customers located in the eleven
European countries which are participating in a new

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common currency, the euro. To date, the
introduction of the euro has not caused any material changes in
our competitive position in the plastics industry or the
operation of the business. While the future impact of the euro is
 uncertain, management does not expect the introduction of the
euro to have a material effect on the business in the foreseeable
 future.


Plastics Technologies Industry

The market for plastics machinery and supplies for
 processing plastics has grown steadily over the past four
decades. Plastics have continued to replace traditional materials
 such as metal, wood, glass and paper in an increasing number of
manufactured products, particularly in the packaging,
transportation, construction, housewares, electrical, and medical
 industries. Advancements in both the development of materials,
which make plastic products more functional, and the capabilities
 of plastics processing equipment have been major contributors to
 the steady growth in the plastics technologies market. In
addition, consumer demand for safer, more convenient and
recyclable products has increased the general demand for plastic
products. Like other capital goods markets, machines within the
plastics technologies market are subject to economic cycles. In
particular, the market for injection molding machines is driven
by resin prices and production, the consumer economy and the
packaging, construction and automotive industries.


Custom molders, which produce a wide variety of
components for many industries, are a major group of plastics
technologies customers. Other customer categories include the
packaging, construction, consumer goods, automotive, electrical
and medical supplies industries. Among the factors that affect
the plastics technologies market are the health of the consumer
economy, residential and commercial construction, automotive
production and the introduction of new models in the automotive
industry. Because of intense competition from international
plastics technologies producers, currency exchange rates also
have a significant impact. Fluctuations in the prices of
petrochemical feed stocks for resin and the subsequent supply of
resin may affect the businesses of our customers and, in turn,
the markets for our products.

Environmental concerns about plastics could slow
the growth of the plastics technologies market. However, some
plastics raw material suppliers, machinery makers and processors
are developing methods of recycling to address environmental
issues. We believe that environmental concerns have not had any
discernible negative effect on the market to date. Nevertheless,
Milacron, through its membership in the Society of Plastics
Industry (an industry trade association) and this
associations affiliate, the American Plastics Council, is
working with other leading companies within the plastics industry
 to address the role of plastics in the environment.

Milacrons Plastics Technologies Business

Milacrons plastics technologies segment
consists of four principal product lines: injection molding
machines (Ferromatik Milacron); blow molding systems (Uniloy
Milacron); extrusion systems (ExtrusionTek Milacron); and
standardized mold bases, components and supplies for the plastics
 injection moldmaking industry (D-M-E). We also sell a variety of
 specialty equipment used in the processing of plastics.


Injection Molding (Ferromatik Milacron).We believe Milacron is the largest
U.S. producer of injection molding machines. Injection molding is
 the most common and versatile method of processing plastic, and
it is used to make a wide variety of parts and products ranging
from housewares and consumer goods to medical supplies and
industrial components. Milacron manufactures many types of
injection molding machines, almost all of which were developed
using Wolfpack principles. Our injection molding machine line
includes machines powered conventionally (with hydraulics) as
well as ones that are driven by servo motors (fully electric).
Product standardization (which facilitates part commonality) and
the modernization of our manufacturing facilities and methods, as
 well as increased volumes, have enabled us to achieve
significant economies of scale for the production of injection
molding machines. We believe these factors have enabled Milacron
to become the lowest-cost U.S. producer of these machines.

In November, 1993, Milacron acquired Ferromatik,
one of Europes leading producers of injection molding
machines. Ferromatik is recognized for its high-end technology,
including multi-color machines, multi-component systems and other
 specialty applications. The acquisition included the Ferromatik
lines of hydraulic and electric injection molding machines and a
modern manufacturing facility in Malterdingen, Germany, as well
as Ferromatiks marketing, sales and service network. This
acquisition expanded our plastics processing technology base and
product line and enabled us to achieve our objective of
establishing a plastics machinery manufacturing and distribution
base in Germany to serve Europe and other markets. Ferromatik has
 provided a complementary fit with Milacrons other
injection molding machine businesses.

Shortly after the acquisition, we completed a
restructuring of Ferromatik designed to derive synergies between
Ferromatik and other Milacron operations and to improve
Ferromatiks operations through the implementation of
manufacturing techniques and methods used in our U.S.

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plastics technologies operations. The
restructuring reduced overall marketing costs through the
consolidation of Milacrons former European marketing
organization into the Ferromatik marketing organization. We
believe that this restructuring has helped, and will continue to
help, us achieve our cost reduction goals in both marketing and
manufacturing.


In May, 1995, Milacron announced the formation of
a joint venture, Cincinnati Milacron Ltd. (CML), with a group of
individuals experienced in the building of plastics machinery in
Ahmedabad, India. This operation builds injection molding
machines for domestic and world markets. In 1995, CML completed
the implementation of its product introductions and opened sales
offices in major cities of India. In 1998, CML completed
construction of a new factory in Ahmedabad to support their
operations.

In 1997, Milacron formed a separate Elektron
Technologies business unit to develop all-electric injection
molding machines for world markets and to build and sell these
machines in North America. Machine designs are also transferred
to Ferromatik for manufacture and sale in Europe.

In 1998, we opened a new manufacturing area for
Elektron Technologies at our facilities in Cincinnati, Ohio. In
connection with our program to reduce costs and increase
operating efficiency, this business is being relocated to our
principal U.S. plastics machinery plant near Cincinnati early in
2000.

The Elektron Technologies business is charged with
 promoting our leading-edge technology in all-electric injection
molding, which, when compared to hydraulic machines, provides
lower cost of operation, better repeatability, and elimination of
 environmental issues associated with use of hydraulic oils. We
believe we are extremely well positioned to lead the
industry-wide shift to all-electric technology, which we believe
will take place over this decade.

In May, 1998, Milacron strengthened its market
position in vertical insert injection molding machinery by
acquiring Autojectors Inc. This Indiana-based operation is one of
 the largest producers of these machines used to make complex
components for the medical, electrical and automotive industries,
 as well as multi-component items for the sports and leisure
industry.

Autojectors has excellent worldwide brand equity
and offers customers a wide range of machines, a high percentage
of which are customized for end users. Autojectors machines are
sold under its own name as well as under the Milacron name.
Autojectors also sells injection molding machines manufactured in
 India by CML to customers in North America.

In 2000, the manufacture of Autojectors machines
will be relocated to our principal U.S. plastics machinery plant
near Cincinnati in connection with our plan to improve operating
efficiency and reduce costs. The sales, service and engineering
functions will remain at the current Autojectors facility in
Indiana.

Blow Molding Systems (Uniloy Milacron).Milacron is a major global player
in blow molding, offering high-volume producers a wide range of
plastic blow molding and structural foam and web solutions. Blow
molding is the third-largest and fastest-growing segment of the
plastics machinery market. Milacron manufactures and sells many
types of systems used to make a wide variety of products,
including rigid consumer packaging, industrial components,
outdoor furniture, appliance parts, refuse and shipping
containers, and toys. In September, 1998, Milacron acquired
Uniloy, which is one of the largest worldwide producers of blow
molding systems, from Johnson Controls, Inc. Uniloy serves three
main blow molding markets: HDPE (high density polyethylene)
packaging, PET (polyethylene terephthalate) packaging and
industrial containers and components. Uniloy currently has a
significant market share in HDPE and plans to greatly expand its
presence in the PET market during the next few years. Uniloy
machines produce containers for milk, juice, water and household
chemicals, as well as pharmaceutical and personal care products;
industrial components ranging from plastic drums and fuel tanks
to plastic pallets; and home items from shutters, screen doors
and furniture to dog houses and camping and boating equipment.
Also known for aftermarket parts, services, molds and related
tooling for blow molding, Uniloy has manufacturing facilities in
North America and Europe.

Uniloy greatly expanded our product offerings with
 reciprocating, rotary, shuttle, USB and IBS series for blow
molding containers of all sizes, shapes and tolerances, as well
as structural foam and web series for producing large industrial,
 construction and leisure parts. Milacron also gained a stronger
European presence with the acquisition. As discussed above, in
1999, we implemented a plan to consolidate Uniloys European
 operations in a new facility to improve efficiency and reduce
the overall cost structure.

Consolidation in the dairy industry had a negative
 effect on Uniloys sales of HDPE systems for milk
containers, Uniloys single largest market, during 1999. We
expect the effects of this consolidation to continue through
2000.

Extrusion Systems (ExtrusionTek Milacron).Milacrons extrusion systems
business consists of the manufacture, sale and distribution of
individual extruders  both single-screw and
twin-screw  and systems comprised of multiple units
which are tooled to extrude a specific product in quantity. Such
systems take longer to manufacture than

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injection molding machines. Extrusion systems,
which we manufacture in the U.S., include twin-screw extruders
and single-screw extruders. We believe we have a strong
competitive position in each of these lines. Twin-screw extruders
 are used to produce continuous-flow products such as pipe,
residential siding, sheet and window frames. As a result, the
business is closely tied to construction market cycles.
Single-screw extruders are used in a variety of applications and
systems such as blow molding, blown-film and cast-film systems,
pipe and profiles, and wire and cable applications. In early
1998, Milacron acquired Wear Technology, which expands our
replacement business for both new and rebuilt screws.


Mold Bases and Components (D-M-E).In January, 1996, Milacron acquired D-M-E,
 which we believe is the largest U.S. producer of mold bases,
standard components and supplies for the moldmaking industry.
D-M-E serves customers throughout much of the world with ten
manufacturing facilities and several international joint venture
operations. Like most of our plastics business, D-M-E serves the
largest segment of the market, the injection molding process.
D-M-E complements Milacrons other businesses because it
provides the mold bases, supplies and components used in the mold
 apparatus inside injection molding machines. We believe we are
achieving synergies in a number of areas, including manufacturing
 processes, technology, marketing and distribution.

In October, 1998, we acquired Master Unit Die
Products, which we believe is the leading North American maker of
 quick-change insert mold bases for the plastics industry. These
mold bases help OEM and custom molders achieve quicker production
 changeovers and lower labor and tooling costs for multiple mold
programs. Master Unit Die has three frame and insert unit product
 lines, a quick-change adapter frame for standard mold bases, and
 a complete line of related components and accessories.

In early 1998, Milacron acquired Northern Supply,
a regional catalog distribution company. Northern Supplys
business is complementary to the catalog business of D-M-E and is
 being managed by D-M-E.

In 1999, we acquired Nickerson, which also sells
supplies and equipment for processing plastic through its catalog
 distribution centers in the U.S. and U.K. Nickerson also
manufactures nozzles and screw tips in the U.S. and manufactures
and refurbishes screws and barrels for small injection molding
machines in the U.K. The addition of Nickerson strengthens
Milacrons aftermarket product offerings worldwide and
expands our distribution channels in North America and Europe.

Specialty Equipment.
Milacron also sells a variety of specialty
equipment used in the processing of plastics products, including
peripheral auxiliary equipment such as material management
systems, heat exchangers and product handling systems, all of
which are manufactured by third parties to Milacrons
specifications. We also rebuild and retrofit older types of
injection molding equipment manufactured by Milacron and others,
refitting them with new controls and software.

8



---



Production Facilities

For the plastics technologies segment, Milacron
maintains the following principal production facilities:


|                              |  |                                                                                                          |  | 
|----------------------------- |  | -------------------------------------------------------------------------------------------------------- |  | 
|                             
|                             
|Facility                      |  | Products                                                                                                
|                             
|                             
|Abbiategrasso, Italy (b)      |  | Blow molding machines                                                                                   
|                             
|                             
|                             
|                             
|Ahmedabad, India              |  | Injection molding machines                                                                              
|                             
|                             
|                             
|                             
|Batavia, Ohio                 |  | Injection machines, all-electric injection molding machines, blow molding machines and extrusion systems
|                             
|                             
|                             
|                             
|Berlin, Germany (a) (b)       |  | Blow molding machines                                                                                   
|                             
|                             
|                             
|                             
|Charlevoix, Michigan          |  | Mold components                                                                                         
|                             
|                             
|                             
|                             
|Corby, England                |  | Injection molding components                                                                            
|                             
|                             
|                             
|                             
|Florence, Italy (b)           |  | Blow molding machines                                                                                   
|                             
|                             
|                             
|                             
|Greenville, Michigan (a)      |  | Mold base manufacturing                                                                                 
|                             
|                             
|                             
|                             
|Hillside, New Jersey (c)      |  | Special mold base components                                                                            
|                             
|                             
|                             
|                             
|Lewistown, Pennsylvania       |  | Mold components                                                                                         
|                             
|                             
|                             
|                             
|Madison Heights, Michigan     |  | Mold base components                                                                                    
|                             
|                             
|                             
|                             
|Malterdingen, Germany         |  | Injection molding machines                                                                              
|                             
|                             
|                             
|                             
|Manchester, Michigan          |  | Blow molding machines                                                                                   
|                             
|                             
|                             
|                             
|McPherson, Kansas (a)         |  | Extrusion screw manufacturing and coating                                                               
|                             
|                             
|                             
|                             
|Mechelen, Belgium             |  | Mold base components                                                                                    
|                             
|                             
|                             
|                             
|Melrose Park, Illinois        |  | Special mold base components                                                                            
|                             
|                             
|                             
|                             
|Monterey Park, California     |  | Special mold base components                                                                            
|                             
|                             
|                             
|                             
|Mt. Orab, Ohio                |  | Plastics machinery parts                                                                                
|                             
|                             
|                             
|                             
|Neuenstadt am Kocher, Germany |  | Special mold base components                                                                            
|                             
|                             
|                             
|                             
|Policka, Czech Republic       |  | Blow molding machine assembly                                                                           
|                             
|                             
|                             
|                             
|Windsor, Ontario, Canada      |  | Special machinery for mold bases                                                                        
|                             
|                             
|                             
|                             
|Youngwood, Pennsylvania       |  | Steel processing and mold components                                                                    
|                             



|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Berlin, Germany, Greenville, Michigan and
	McPherson, Kansas plants are leased from unrelated third parties.                          
|(b) | These facilities will be closed in 2000 in
	connection with the consolidation of Uniloys European
	manufacturing and assembly operations.
|(c) | This facility will be closed in 2000 in connection
	 with our plan to improve operating efficiency and reduce costs.                      

Sales, Marketing and Customer Service

Milacron maintains a large direct sales force in
the U.S. for our plastics technologies segment, which we
supplement with independent agents. Internationally, Milacron
uses both a direct sales force and independent agents. In the
U.S., the plastics technologies business uses our Cincinnati,
Ohio, headquarters, as well as sales and service centers in
Allentown, Pennsylvania; Charlotte, North Carolina; Chicago,
Illinois; Dallas, Texas; Detroit, Michigan; Leominster,
Massachusetts; and Los Angeles, California to market our products
 and provide customer support and training. Through our
Ferromatik subsidiary, we have an extensive sales, marketing,
service and distribution system throughout Europe, including
Germany, the U.K., France and Spain. Uniloy also maintains its
own distribution network with major facilities in California,
Georgia and New Jersey. D-M-E operates through catalog and
telemarketing sales, as well as distribution centers
strategically located in industrial and manufacturing areas where
 most injection molding takes place. Distribution is through a
broad network in the U.S. and Europe. In Asia, D-M-E sells
through a large network of joint venture sales and service
offices. D-M-E also plans to launch an electronic commerce
website with online order entry and status checking capabilities
in June, 2000. In 1997, we formally dedicated a new sales and
marketing office in Singapore and expect to maintain our presence
 in this region.


Milacrons service and parts organization,
ServTek, provides a steady, dependable revenue stream and
continues to grow worldwide. At ServTek, we supplement our own
service technicians with a network of independent providers to
provide 24-hour response and service across North and South
America as well as in a growing number of European countries.
Demonstrating our commitment to complete customer satisfaction,
we will launch in June, 2000 an e-commerce website for
around-the-clock service.

Competition

The markets for plastics technologies in North
America and worldwide are highly competitive and are made up of a
 number of North American, European and Asian competitors. We
believe Milacron has a significant share of the U.S. market
for the types of products we produce, and that we are the
broadest-line manufacturer of equipment, supplies and systems for
 plastics processing in the world. Our competitors vary in size
and resources: some are larger than us, most are smaller, and
only a few compete in more than one product category. Principal
competitive factors in the plastics technologies industry are:
product features, technology, quality, performance, reliability,
speed of delivery, price and customer service. The Wolfpack
program is designed to maintain and enhance our competitive
position


9



---



worldwide with respect to each of these
competitive factors. In addition, we focus on containing costs,
maintaining competitive market pricing and expanding marketing
channels in order to maintain and grow our presence in the
market.


Metalworking Technologies Business

Milacron produces five basic types of industrial
products: metalcutting tools and tool holders, metalworking
fluids, precision grinding wheels, carbide wear parts and
industrial magnets, in total representing over 150,000 different
products. In 1999, sales for our metalworking technologies
segment were $721 million. We believe Milacron is a leader in
many new product technologies, including synthetic lubricants,
use of synthetic ceramic abrasives, high-performance cutting tool
 coatings, and product designs using computer modeling. Over 75%
of this segments sales are of consumable products and
components. Consumable products are depleted during the process
in which they are used, offering us a continuous opportunity to
sell replacement products to our customers. We believe that
Milacrons metalworking technologies business complements
our plastics machinery businesses, because the metalworking
technologies business is exposed to less pronounced business
cycles.


Our metalworking technologies businesses sell
products primarily in North America, Europe and Asia.
Approximately 27% of the segments 1999 sales were to
customers located in the eleven European countries which are
participating in a new common currency, the euro. To date, the
introduction of the euro has not caused any material changes in
our competitive position in the industry or the operation of the
business. While the future impact of the euro is uncertain,
management recognizes that we, along with our competitors, could
experience adverse price realization over the longer term as a
result of single currency pricing in those countries.

Metalworking Technologies Industry

Milacrons metalworking technologies business
 participates in a $35 billion world market, which has
historically grown at a rate approximating the growth of the
world GDP. Milacrons products address more than $20 billion
 of this market. We have the heaviest market penetration in North
 America and Europe, and in the case of metalcutting tools,
India. We serve customers in the automotive, machinery,
industrial components, electrical, agriculture and construction
industries, as well as job shops.


Milacrons Metalworking Technologies Business

Metalcutting Tools (Carbide Inserts and
Round Tools). Metalcutting tools
are made of carbide, steel and other materials and include
systems to hold metalcutting tools. They are used on machine
tools for use in a wide variety of metalcutting operations. We
believe that through our WidiaValenite and Talbot businesses, we
are the second-largest producer of metalcutting tool systems in
the U.S. and the third-largest worldwide. In addition, we believe
 that we are also the third largest producer of round tools in
North America.


Valenite manufactures over 55,000 products,
including an extensive line of cutting tool inserts in a wide
variety of materials and geometries for turning, boring, milling
and drilling, and standard and special steel insert holders.
Valenite has an excellent market position in the automotive,
off-road vehicle and truck industries and has strong market
positions in carbide wear parts for metalforming and in products
requiring the wear and corrosion-resistant properties of carbide.

In February, 1995, Milacron acquired Widia, a
major European metalcutting tool maker with key production
facilities in Germany and other western European countries. Widia
 also owns a 51% interest in Widia (India) Ltd., an Indian public
 company. Widias product lines include carbide cutting tool
 inserts and steel insert holders needed for metalcutting
operations, carbide wear parts used in forming and stamping
metal, and both soft and permanent industrial magnets, used in
automotive and other applications. Widia currently manufactures
over 45,000 standard and special products.

In 1995, Milacron initiated a $28 million plan to
integrate certain Valenite and Widia operations, primarily in
Europe and Japan. This plan involved the closing of two
manufacturing plants, the downsizing of another plant, as well as
 the consolidation of numerous sales, customer service and
warehousing operations in Europe and Japan. In total, the
execution of the plan resulted in the elimination of over 370
production and administrative positions. In addition, a global
management reorganization program began in 1998, as described on
page 4.

In 1998, we took additional steps to reduce
staffing levels at Widia, which has resulted in further cost
savings. These actions were made possible by plant modernization
and improvements in manufacturing processes as well as the
installation of integrated computer software at Widias
European locations. Additional staffing reductions at both Widia
and Valenite will result from the completion of our plan to
improve operating efficiency and reduce costs that was announced
in the fourth quarter of 1999 and which is discussed on
page 5.

In July, 1995, we acquired Talbot, a major
supplier of round high-speed steel metalcutting tools. Talbot is
the largest U.S. producer of end mills, as well as a leading
 tap

10



---



producer. Talbot enabled us to enter the market
for round tools, including high-speed steel end mills, taps,
countersinks, counterbores and reamers. These products are highly
 complementary to the products made by WidiaValenite. We expect
to expand Talbot products into non-U.S. markets.


To further broaden our product coverage in the
round metalworking tooling business, we made two smaller
acquisitions in 1997: Minnesota Twist Drill, Inc., a manufacturer
 of standard high-speed steel drills in its Chisholm, Minnesota
plant, and Data Flute CNC, Inc., a manufacturer of
high-performance solid carbide end mills located in Pittsfield,
Massachusetts. These acquisitions are highly complementary to our
 Valenite and Talbot product lines and broaden our already
extensive product offerings in the marketplace. In 1998, we
initiated a $15 million expansion program, which includes a
second plant for Data Flute, a doubling of production capacity at
 Minnesota Twist Drill, and the expansion of a Talbot facility.

In December 1998, we acquired Werkö, a
German high-speed steel drill and tap producer, in order to enter
 the European market for round tools. Werkö also gives us a
full line of high-speed steel drills in metric sizes and
complements our inch-sized line.

In 1999, we further expanded our product offerings
 for round metalworking tools by acquiring the Micro Carbide
product line, which includes carbide reamers, step drills and
miniature tools. Micro Carbide products are being produced at our
 Data Flute facility in Massachusetts.

Metalworking Fluids.
Metalworking fluids are proprietary chemical
compounds and emulsions used as lubricants, coolants and
corrosion inhibitors in a wide variety of metalcutting and
metalforming operations. Major customers are producers of
precision metal components for many industries, including
manufacturers of automotive power trains and stamped parts,
aerospace engines and bearings, as well as general metalworking
shops. Milacron is a full-line supplier, offering water-based
fluids (synthetics), water-based oil-bearing fluids
(semi-synthetics) and oil-based fluids. Over the last five years,
 we have expanded our lines of soluble oils, base oils and
synthetic fluids. Milacron has marketed these products under the
Cimcoolbrand since the mid-1940s. With the acquisitions
of Valenite and Widia, we developed two additional brands of
fluids. In 1994, we introduced the Valcoolbrand, which is
 designed to work with all metalcutting tools and is being
marketed through Valenites market channels. In 1996, we
introduced the Widacoolline of fluids in Europe, which we
 are selling through Widias market channels.

In 1999, we made two strategic acquisitions to
complement our existing metalworking fluids businesses. In
August, we acquired Producto Chemicals, a full-line manufacturer
of process cleaners, washers, corrosion inhibitors and specialty
products for metalworking. Productos cleaners expand our
product offerings and are being marketed through Milacrons
sales and distribution channels. In September, we acquired Oak
International, a supplier of metalforming lubricants and process
cleaners. The acquisitions of Producto and Oak fit our strategy
of being the leading global supplier of consumable products for
metalworking and significantly expand the markets we serve.

Precision Grinding Wheels.
Grinding wheels are rotating tools made of
granular abrasive materials bonded together with vitreous or
resin materials. They are used primarily by manufacturers in the
metalworking industry. We believe that Milacron is the
second-largest U.S. producer of grinding wheels. Major
customers include manufacturers of automotive power trains,
aerospace engines and bearings, as well as general metalworking
machine shops. Milacron designs and manufactures a wide variety
of precision abrasive grinding wheels, including resin-bonded,
vitrified, cubic boron nitride (CBN), diamond and synthetic
ceramic abrasive types.

We believe, based on tests in our laboratories as
well as in customer plants, that Milacrons proprietary
formulae, our modern production equipment and our techniques for
manufacturing precision grinding wheels give us advantages in
terms of product quality, lower production costs and faster
deliveries. We believe that Milacron has also benefited from
technologies common to both grinding wheels and metalcutting
fluids. We have lowered our production costs, in part, by
finishing some of our wheels on CNC (computer numeric control)
machines designed and built by our former machine tools business.

Carbide Wear Parts.
Carbide wear parts represent various components
made from sintered tungsten carbide having physical properties of
 extreme hardness and excellent wear and corrosion resistence.
Valenite and Widia manufacture three types of carbide wear parts:
 tooling components for metalforming, carbide rod for use in
round tools, and metalforming and general wear parts to resist
frictional wear and chemical activity.

Industrial Magnets.
Widia is a leader in injection molded plastic
bonded magnets. Widia manufactures permanent industrial magnets
and magnetic circuits for automotive, electrical and other
industrial applications, as well as soft magnets for the
telecommunications and construction industries.

11



---



Production Facilities

For the metalworking technologies segment,
Milacron maintains the following principal production facilities:


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



|    |                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Altenburg, Germany plant; Corby, England
	plant; Grenada, Mississippi plant; Livonia, Michigan plant;
	Gainesville, Texas plant; Königsee, Germany plant; Nogales,
	Mexico plant; Sinsheim, Germany plant; Valley View, Ohio plant;
	and three plants in Detroit, Michigan (metro area) are leased
	from unrelated third parties.

Sales, Marketing and Customer Service

Our metalworking technologies business generally
sells its products under multiple brands through parallel market
channels, using direct sales, industrial distributors, agents and
 manufacturers representatives, as well as industrial
catalog sales. Most of our sales are of products that we
manufacture and sell under company-owned brands. In addition, we
sell our products under the brand names of other companies
through their own market channels. We also use Milacron brand
names to sell products that are made by other companies.


At the beginning of 1999, we launched MILPRO.com,
a business-to-business commercial website for the metalworking
industry offering customers more than 50,000 tools, fluids and
abrasives. Our MILPRO initiative originally had as its primary
focus the more than 100,000 small metalworking jobs shops in the
U.S. However, we believe that electronic commerce has the
potential to become a significant source of revenue from
customers of all sizes  large and small 
within three to five years.

Competition

We have many competitors for metalcutting tools
but only two have higher worldwide sales. Our main global
competitors in metalworking fluids are large petrochemical
companies and smaller companies specializing in similar fluids.
There are a few large competitors in the U.S. grinding wheel
 market, one of which is significantly larger than Milacron.
Principal competitive factors in these markets


12



---



include market coverage, technology, performance,
delivery, price and customer service.


Patents

Milacron holds a number of patents, none of which
is material to any business segment.


Employees

Milacron employed an average of 11,758 people in
1999, of whom 6,014 were employed outside the U.S. As of year-end
 1999, we employed 11,629 people.


Backlog

The backlog of unfilled orders was $243 million at
 the end of 1999 and $247 million at the end of 1998. The backlog
 at year-end 1999, substantially all of which is expected to be
delivered in 2000, is believed to be firm.


13



---



Segment Information

Financial data for the past three years for the
companys business segments are shown in the following
tables.

|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |       |         | 
|----------------------------- | ----------------------------------- | --------------------------------------------------------------------------------------------- | ------- | ----- | ------- | ---- | ------- | ----- | ------- |  | ------- | ----- | ------- | 
|                             
|                             
|(In millions)                 |                                     | 1999                                                                                          |         | 1998  |         | 1997
|                             
|                             
|Sales                         |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 904.2 |         |      | $       | 796.4 |         |  | $       | 735.7 |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 720.5 |         |      |         | 718.3 |         |  |         | 703.0 |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Total sales                                                                                   |         | $     | 1,624.7 |      |         | $     | 1,514.7 |  |         | $     | 1,438.7 | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|Backlog of unfilled orders    |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 150.2 |         |      | $       | 142.9 |         |  | $       | 89.5  |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 92.7  |         |      |         | 103.6 |         |  |         | 106.1 |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Total backlog                                                                                 |         | $     | 242.9   |      |         | $     | 246.5   |  |         | $     | 195.6   | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|Operating earnings            |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 89.3  |         |      | $       | 80.3  |         |  | $       | 59.7  |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 72.8  |         |      |         | 82.2  |         |  |         | 81.2  |        
|                             
|                             
|                             
|                             
|                              | Restructuring costs (a)             |                                                                                               |         | (16.2 | )       |      |         |      |         |  |         |      |        
|                             
|                             
|                             
|                             
|                              | Gain on divestiture of business (b) |                                                                                               |         | 13.1  |         |      |         |      |         |  |         |      |        
|                             
|                             
|                             
|                             
|                              | Corporate expenses                  |                                                                                               |         | (16.5 | )       |      |         | (18.9 | )       |  |         | (17.2 | )      
|                             
|                             
|                             
|                             
|                              | Other unallocated expenses (c)      |                                                                                               |         | (5.4  | )       |      |         | (5.7  | )       |  |         | (5.8  | )      
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Operating earnings                                                                            |         |       | 137.1   |      |         |       | 137.9   |  |         |       | 117.9   | 
|                             
|                             
|                             
|                             
|                              | Interest expense  net              |                                                                                               |         | (38.2 | )       |      |         | (30.7 | )       |  |         | (27.5 | )      
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Earnings from continuing operations before income taxes and
	minority shareholders interests |         | $     | 98.9    |      |         | $     | 107.2   |  |         | $     | 90.4    | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|Assets (d)                    |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 850.8 |         |      | $       | 882.8 |         |  | $       | 587.2 |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 552.8 |         |      |         | 547.2 |         |  |         | 476.8 |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     |                                                                                               | 1,403.6 |       |         |      | 1,430.0 |       |         |  | 1,064.0 |      
|                             
|                             
|                             
|                             
|                              | Discontinued machine tools segment  |                                                                                               |         |      |         |      |         |      |         |  |         | 246.6 |        
|                             
|                             
|                             
|                             
|                              | Cash and cash equivalents           |                                                                                               |         | 81.3  |         |      |         | 48.9  |         |  |         | 25.7  |        
|                             
|                             
|                             
|                             
|                              | Receivables sold                    |                                                                                               |         | (75.0 | )       |      |         | (63.1 | )       |  |         | (75.0 | )      
|                             
|                             
|                             
|                             
|                              | Deferred income taxes               |                                                                                               |         | 52.4  |         |      |         | 55.0  |         |  |         | 54.4  |        
|                             
|                             
|                             
|                             
|                              | Unallocated corporate and other (e) |                                                                                               |         | 74.4  |         |      |         | 86.3  |         |  |         | 76.8  |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Total assets                                                                                  |         | $     | 1,536.7 |      |         | $     | 1,557.1 |  |         | $     | 1,392.5 | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|Capital expenditures          |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 18.9  |         |      | $       | 29.6  |         |  | $       | 26.0  |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 26.7  |         |      |         | 38.8  |         |  |         | 33.9  |        
|                             
|                             
|                             
|                             
|                              | Unallocated corporate               |                                                                                               |         | 1.7   |         |      |         | 2.4   |         |  |         | 2.0   |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     |                                                                                               | 47.3    |       |         |      | 70.8    |       |         |  | 61.9    |      
|                             
|                             
|                             
|                             
|                              | Discontinued machine tools segment  |                                                                                               |         |      |         |      |         | 10.6  |         |  |         | 17.6  |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Total capital expenditures                                                                    |         | $     | 47.3    |      |         | $     | 81.4    |  |         | $     | 79.5    | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|Depreciation and amortization |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             
|                             
|                             
|                             
|                              | Plastics technologies               |                                                                                               | $       | 32.8  |         |      | $       | 26.6  |         |  | $       | 21.9  |        
|                             
|                             
|                             
|                             
|                              | Metalworking technologies           |                                                                                               |         | 24.9  |         |      |         | 23.3  |         |  |         | 23.0  |        
|                             
|                             
|                             
|                             
|                              | Unallocated corporate               |                                                                                               |         | .6    |         |      |         | 1.5   |         |  |         | 2.9   |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     |                                                                                               | 58.3    |       |         |      | 51.4    |       |         |  | 47.8    |      
|                             
|                             
|                             
|                             
|                              | Discontinued machine tools segment  |                                                                                               |         |      |         |      |         | 6.0   |         |  |         | 5.9   |        
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                              |                                     | Total depreciation and amortization                                                           |         | $     | 58.3    |      |         | $     | 57.4    |  |         | $     | 53.7    | 
|                              |                                     |                                                                                               |         |       |         |      |         |       |         |  |         |      
|                             

See notes (a) - (e) on page 15.


14



---





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

Geographic Information

The following table summarizes the companys
U.S. and non-U.S. operations.


Sales of U.S. operations include export sales of
$153.8 million in 1999, $136.3 million in 1998 and $113.1 million
 in 1997.

Total sales of the companys U.S. and
non-U.S. operations to unaffiliated customers outside the U.S.
were $720.1 million, $679.6 million and $684.2 million in 1999,
1998 and 1997, respectively.



---

Geographic Information





|                        |                         |                      |         |         |       |      |         |       |       |   |         |       |       | 
|----------------------- | ----------------------- | -------------------- | ------- | ------- | ----- | ---- | ------- | ----- | ----- | - | ------- | ----- | ----- | 
|(In millions)           |                         | 1999                 |         | 1998    |       | 1997
|                       
|                       
|Sales (a)               |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States           |                      | $       | 1,002.9 |       |      | $       | 912.7 |       |   | $       | 845.3 |      
|                        | Non-U.S. operations     |                      |         |         |       |      |         |       |       |   |         |       |      
|                       
|                       
|                       
|                       
|                        |                         | Germany              |         |         | 234.5 |      |         |       | 235.6 |   |         |       | 219.5 | 
|                       
|                       
|                       
|                       
|                        |                         | Other western Europe |         |         | 252.2 |      |         |       | 252.2 |   |         |       | 248.2 | 
|                       
|                       
|                       
|                       
|                        |                         | Asia                 |         |         | 83.3  |      |         |       | 74.5  |   |         |       | 87.1  | 
|                       
|                       
|                       
|                       
|                        |                         | Other                |         |         | 51.8  |      |         |       | 39.7  |   |         |       | 38.6  | 
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|Total sales             |                         | $                    | 1,624.7 |         |       | $    | 1,514.7 |       |       | $ | 1,438.7 |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|Noncurrent assets       |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States           |                      | $       | 579.3   |       |      | $       | 542.3 |       |   | $       | 377.7 |      
|                        | Non-U.S. operations     |                      |         |         |       |      |         |       |       |   |         |       |      
|                       
|                       
|                       
|                       
|                        |                         | Germany              |         |         | 87.2  |      |         |       | 108.6 |   |         |       | 80.7  | 
|                       
|                       
|                       
|                       
|                        |                         | Other western Europe |         |         | 101.1 |      |         |       | 117.9 |   |         |       | 78.9  | 
|                       
|                       
|                       
|                       
|                        |                         | Asia                 |         |         | 20.3  |      |         |       | 18.4  |   |         |       | 17.8  | 
|                       
|                       
|                       
|                       
|                        |                         | Other                |         |         | 6.2   |      |         |       | 7.5   |   |         |       | 6.1   | 
|                       
|                       
|                       
|                       
|                        | Discontinued operations |                      |         |        |       |      |         |      |       |   |         | 64.4  |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|Total noncurrent assets |                         | $                    | 794.1   |         |       | $    | 794.7   |       |       | $ | 625.6   |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      

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

15



---



Executive Officers of the Registrant

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

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

Notes:


Parenthetical figure below name of
individual indicates age at most recent birthday prior to
December 31, 1999.

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

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



|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(a) | James R. Christie succeeds Alan L. Shaffer,
	who resigned from the company in February, 2000.
|(b) | William J. Grubers title was changed in
	February, 2000.                                    
|(c) | Hugh C. ODonnell succeeds Wayne F.
	 Taylor, who retired from the company in 1999.          

16



---





Item 2.   Properties


We have now fully occupied our new corporate
headquarters building which is leased from a third party and is
located approximately 2 miles north of downtown Cincinnati,
Ohio.


The remaining information required by Item 2
is included in Part I on pages 9 and 12 of this
Form 10-K.



Item 3.   Legal Proceedings


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




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

There were no matters submitted to a vote of
security holders during the fourth quarter of 1999.




PART II




|        |                            
|------- | ---------------------------
|Item 5. | Market for the Registrants

Common Equity and Related 
 Stockholder Matters


The companys common shares are listed on the
 New York Stock Exchange. Such shares are also traded on the
Cincinnati Stock Exchange, Boston Stock Exchange, Pacific Stock
Exchange, Philadelphia Stock Exchange and Midwest Stock Exchange,
 with options traded on the Philadelphia Stock Exchange. As of
February 28, 2000, there were approximately
5,190 holders of record of the companys common shares.
 The companys Preferred shares are not actively traded.


The following table shows the price range of the
common shares for 1998 and 1999, as reported by the New York
Stock Exchange. Cash dividends of $.12 per common share and $1.00
 per Preferred share were paid in each quarter of 1998 and 1999.

|                         |              |      |   |       |  |  |   |       | 
|------------------------ | ------------ | ---- | - | ----- |  |  | - | ----- | 
|                        
|                        
|Common Stock Price Range |              |     
|                        
|                        
|                         |              | High |   | Low  
|                        
|                        
|1998, quarter ended      |              |      |   |       |  |  |   |      
|                        
|                        
|                        
|                        
|                         | March 31     |      | $ | 32.06 |  |  | $ | 23.19 | 
|                        
|                        
|                        
|                        
|                         | June 30      |      |   | 33.75 |  |  |   | 23.38 | 
|                        
|                        
|                        
|                        
|                         | September 30 |      |   | 24.88 |  |  |   | 15.13 | 
|                        
|                        
|                        
|                        
|                         | December 31  |      |   | 23.31 |  |  |   | 14.50 | 
|1999, quarter ended      |              |      |   |       |  |  |   |      
|                        
|                        
|                        
|                        
|                         | March 31     |      | $ | 21.13 |  |  | $ | 15.50 | 
|                        
|                        
|                        
|                        
|                         | June 30      |      |   | 24.50 |  |  |   | 15.56 | 
|                        
|                        
|                        
|                        
|                         | September 30 |      |   | 19.25 |  |  |   | 16.63 | 
|                        
|                        
|                        
|                        
|                         | December 31  |      |   | 19.06 |  |  |   | 13.50 | 
|                        

17



---





Item 6.   Selected Financial Data


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

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

18



---





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

Results of Operations

Milacron operates in two business segments:
plastics technologies and metalworking technologies (formerly
cutting process technologies).


Discontinued Operations

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


Acquisitions

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


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

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

In September, 1999, we acquired the Micro Carbide
product line, which includes solid carbide reamers, step drills
and miniature tools. These products are being produced by Data
Flute CNC, which we acquired in 1997 and which also manufactures
round solid-carbide metalworking tools.

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

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

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

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

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

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

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

In 1997, we acquired two businesses: Data Flute
CNC in June and Minnesota Twist Drill in September. Both
businesses are included in the metalworking technologies segment
and had annual sales of approximately $10 million as of the
respective acquisition dates.

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

19



---



Presence Outside the U.S.

In recent years, Milacrons growth outside
the U.S. has allowed it to become more globally balanced. For
1999, markets outside the U.S. represented the following
percentages of consolidated sales: Europe 27%; Asia 7%; Canada
and Mexico 7%; and the rest of the world 3%. As a result of the
companys geographic mix, foreign currency exchange rate
fluctuations affect the translation of sales and earnings, as
well as consolidated shareholders equity. During 1999, the
weighted average exchange rate of the euro was weaker in relation
 to the U.S. dollar than in 1998. Because of the comparative
strength of the dollar, we experienced unfavorable currency
translation effects on new orders and sales of $24 million and
$30 million, respectively, in relation to 1998. The effects on
operating earnings and net earnings were not significant.


Between December 31, 1998 and
December 31, 1999, the euro weakened against the dollar by
approximately 14%. This resulted in a $21 million reduction in
consolidated shareholders equity due to unfavorable foreign
 translation adjustments.

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

1999 Compared to 1998

New Orders and Backlog

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


Orders for plastics technologies products
increased by $99 million, or 12%, to $897 million due to the
effects of the 1998 and 1999 acquisitions which contributed an
incremental $117 million in relation to 1998. Without the
acquisitions and currency effects, the segments new orders
were essentially flat. Orders for extrusion systems increased,
particularly in the U.S., while orders for injection molding
machines decreased worldwide for much of the year due to lower
industrial production levels, higher resin prices and unfavorable
 currency effects. However, business levels began to improve in
the fourth quarter.

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

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

The companys backlog of unfilled orders
totaled $243 million at December 31, 1999. This compares to $247
million at December 31, 1998 and $196 million at
December 27, 1997.

Sales

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


In the plastics technologies segment, sales were
$904 million, representing a $108 million, or 14%, increase in
relation to 1998. The 1998 and 1999 acquisitions more than
accounted for the increase in sales. Sales of injection molding
machines decreased worldwide due in part to the aforementioned
softness in worldwide markets, while sales of extrusion systems
increased. Consolidation in the dairy industry had a negative
effect on the sales of certain Uniloy products, a trend that we
expect to continue through 2000.

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

Consolidated export sales were $154 million in
1999 compared to $136 million in 1998. Uniloy more than accounted
 for the increase.

Sales of both segments to non-U.S. markets totaled
 $720 million, an increase in 1999 of $41 million. In 1999 and
1998, products manufactured outside the U.S. approximated 40% and
 41% of sales, respectively, while products sold outside the U.S.
 approximated 44% of sales in 1999 and 45% of sales in 1998.

20



---



Margins, Costs and Expenses

The consolidated manufacturing margin was 26.0% in
 1999 compared to 27.9% in 1998. Margins decreased in the
plastics technologies segment due principally to reduced
shipments of injection molding machines and inefficiencies at
Uniloys European operations. In September, 1999, we
announced a plan to improve efficiency at Uniloy by closing three
 plants and consolidating its European manufacturing operations
at a new facility in Italy. Margins also decreased in the
metalworking technologies segment, particularly at Widia and for
round tools. As discussed more fully below, in December, 1999, we
 implemented a plan to improve manufacturing efficiency at
various operations in both segments. We believe that these
measures, together with expected higher sales of injection
molding machines and certain other key product lines, will result
 in improved margins in 2000.


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

Other expense-net decreased from $12.9 million in
1998 to 10.0 million in 1999. The 1999 amount includes higher
goodwill amortization expense due principally to the Uniloy
acquisition. The net decrease resulted principally from the
absence of severance expenses totaling approximately $6.7 million
 related to approximately 185 employees at Widia and at our
extrusion machinery facility in Austria in 1998. These actions
were made to adjust staffing levels to current sales projections
and as a result of plant modernization and process improvements.

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

Restructuring Costs

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


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

The total cost of the plan, which was implemented
in the fourth quarter of 1999 and which is scheduled to be
completed by September 30, 2000, is expected to be $6.7
million. Of this amount, $5.7 million is included in a reserve
established in the allocation of the Uniloy acquisition cost. The
 remaining $1.0 million is being charged to expense as the
related costs are incurred, including $.2 million in the fourth
quarter of 1999. Charges against the $5.7 million reserve during
the fourth quarter were $.7 million. Foreign currency exchange
rate fluctuations since the acquisition date have had the effect
of reducing the reserve by $.7 million.

The total cash cost of the consolidation will be
approximately $4 million, which is net of the expected proceeds
from the sale of two facilities in Italy. The consolidation will
not adversely affect future sales revenue and is expected to
result in annual pretax cost savings of approximately $3 million,
 which will begin to phase-in during the first half of 2000.

In December, we implemented a second plan to
improve operating efficiency and reduce costs at additional
businesses. The actions contemplated by the plan involve both
segments operations in North America and Europe. The plan
involves the closure of four smaller manufacturing facilities,
the operations of which will be transferred to other locations,
and the elimination of approximately 300 manufacturing and
administrative positions worldwide. The total cost of
implementing the plan is expected to be $20.8 million, including
$16.0 million in 1999 and $4.8 million in 2000. Of the 1999
amount, $14.1 million is included in a reserve for employee
termination benefits and facility exit costs that was recorded in
 the fourth quarter. Charges against this reserve through the end
 of the year totaled $.9 million. The total cost of the plan also
 includes 1999 charges of $1.7 million for supplemental early
retirement benefits for certain employees that will be funded
through pension plans and $5.0 million for additional costs that
are being charged to expense as incurred. Of the latter amount,
$.2 million was incurred in the fourth quarter of 1999.

21



---



The total cash cost of the plan, including capital
 expenditures of $2.5 million, is expected to be approximately
$17.7 million, most of which will be expended in 2000. Completion
 of the plan is expected to result in annual pretax cost savings
of more than $20 million, which will gradually phase-in during
2000 and be fully realized in 2001.

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




Restructuring Costs





|                                                         |  |      |      | 
|-------------------------------------------------------- |  | ---- | ---- | 
|(In millions)                                            |  | 1999
|                                                        
|                                                        
|Accrual for termination benefits and facility exit costs |  | $    | 14.1 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Supplemental retirement benefits                         |  |      | 1.7  | 
|                                                        
|                                                        
|                                                        
|                                                        
|Other costs                                              |  |      | .2   | 
|                                                         |  |      |      | 
|                                                         |  |      | 16.0 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Costs related to Uniloy consolidation                    |  |      | .2   | 
|                                                         |  |      |      | 
|                                                         |  | $    | 16.2 | 
|                                                         |  |      |      | 
|                                                        

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




Restructuring Reserves





|                     |                      |           |       |        |  |         |       |       |   |  |       |       | 
|-------------------- | -------------------- | --------- | ----- | ------ |  | ------- | ----- | ----- | - |  | ----- | ----- | 
|                     |                      | Beginning |       |        |  | Ending 
|(In millions)        |                      | Balance   |       | Change |  | Balance
|                    
|                    
|Uniloy consolidation |                      |           |       |        |  |         |       |       |   |  |       |      
|                    
|                    
|                    
|                    
|                     | Termination benefits |           |       | $ 4.6  |  |         |       | $(1.0 | ) |  |       | $ 3.6 | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |       | 1.1    |  |         |       | (.4   | ) |  |       | .7    | 
|                     |                      |           |       |        |  |         |       |       |   |  |       |      
|                     |                      |           | 5.7   |        |  |         | (1.4  | )     |   |  | 4.3   |      
|Restructuring costs  |                      |           |       |        |  |         |       |       |   |  |       |      
|                    
|                    
|                    
|                    
|                     | Termination benefits |           |       | 10.0   |  |         |       | (.6   | ) |  |       | 9.4   | 
|                    
|                    
|                    
|                    
|                     | Facility exit costs  |           |       | 4.1    |  |         |       | (.3   | ) |  |       | 3.8   | 
|                     |                      |           |       |        |  |         |       |       |   |  |       |      
|                     |                      |           | 14.1  |        |  |         | (.9   | )     |   |  | 13.2  |      
|                     |                      |           |       |        |  |         |       |       |   |  |       |      
|Total reserves       |                      |           | $19.8 |        |  |         | $(2.3 | )     |   |  | $17.5 |      
|                     |                      |           |       |        |  |         |       |       |   |  |       |      

Divestiture of Business

In December, 1999, we sold our European extrusion
machinery business, which is headquartered in Vienna, Austria,
for cash proceeds of $47 million subject to post-closing
adjustments. The pretax gain on the sale was $13.1 million ($10.1
 million after tax). The European extrusion business had sales to
 unaffiliated customers of $62 million in 1999, principally to
markets in Europe, Asia and South America. The business was sold
to redeploy assets to other more strategic businesses.


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

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


Income Taxes

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


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

Our effective tax rate for 1999 was 27% compared
to 26% in 1998. The rate for 1999 is lower than the U.S. federal
statutory rate principally due to the adjustment of income tax
reserves to more accurately reflect actual expected liabilities.
These benefits were partially offset by the downward adjustment
of the carrying value of our net deferred tax assets in Germany
to a lower rate. Net adjustments of valuation allowances based on
 the process described above did not materially affect the 1999
effective tax rate but was the principal reason that the 1998
effective rate was less than the statutory rate.

The effective tax rate for 2000 is expected to
increase to within a range of approximately 30-33%. However, the
tax rate will ultimately be contingent on the mix of earnings
between tax jurisdictions and other factors that cannot be
predicted with certainty at this time.

22



---



Earnings from Continuing Operations

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


Discontinued Operations

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


Net Earnings

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


1998 Compared to 1997

New Orders and Backlog

New orders in 1998 were $1,512 million, which
represented a $91 million, or 6%, increase from $1,421 million in
 1997. Excluding the effect of acquisitions, new orders were $7
million higher in 1998. Orders for plastics technologies products
 increased by $78 million, or 11%. Excluding the acquisitions,
orders increased by approximately 1%. Orders for metalworking
technologies products increased by $13 million, or 2%. Excluding
the effects of the 1997 acquisitions, new orders were flat, due
principally to the General Motors strike.


U.S. export orders were $135 million in 1998
representing a 34% increase from $101 million in 1997. Uniloy
accounted for almost one third of the increase.

The companys backlog of unfilled orders
totaled $247 million at December 31, 1998. This compares to $196
million at December 27, 1997, and $212 million at
December 28, 1996.

Sales

Sales in 1998 were $1,515 million, which
represented a $76 million, or 5%, increase from $1,439 million in
 1997. Excluding the effect of acquisitions, consolidated sales
decreased modestly in relation to 1997. Sales of plastics
technologies products increased by $61 million, or 8%. The
segments sales include an incremental $73 million related
to the 1998 acquisitions. Sales of metalworking technologies
products increased by $15 million, or 2%; excluding the effect of
 the 1997 acquisitions, sales in 1998 approximated the 1997
amount.


Export sales were $136 million in 1998 compared to
 $113 million in 1997. The 1998 amount includes $13 million for
Uniloy.

Sales of both segments to non-U.S. markets,
including exports, totaled $680 million, a decrease in 1998 of $4
 million. In 1998 and 1997, products manufactured outside the
U.S. approximated 41% and 42% of sales, respectively, while
products sold outside the U.S. approximated 45% and 48% of sales,
 respectively.

Margins, Costs and Expenses

The manufacturing margin percent of 27.9% in 1998
increased from 26.9% in 1997. Margins for both segments showed
improvement in both the U.S. and in Europe. In 1997, margins in
the plastics technologies segment had been held back by pricing
pressure on U.S.-built injection molding machines, which began to
 ease in the third quarter of that year.


Total selling and administrative expense increased
 in amount in relation to 1997. However, these expenses decreased
 modestly in 1998 as a percentage of sales due to increased sales
 volume.

Other expense-net, including amortization of
goodwill, increased to $12.9 million in 1998 from $9.4 million in
 1997. The 1998 amount includes severance expenses totaling
approximately $6.7 million relating to approximately 185
employees at Widia, the companys European cutting tool
company, and at the companys extrusion machinery facility
in Austria, which was subsequently sold in 1999. As a result of
these and other actions at Widia and in Austria, we achieved
annualized pretax savings of approximately $8.0 million, which
began to phase-in during the fourth quarter of 1998 for Widia and
 which phased-in during 1999 in Austria. The 1997 expense
included severance expense of approximately $2.0 million relating
 to Ferromatik, the companys German injection molding
machine subsidiary. Annual cost savings from this and other cost
reduction measures at Ferromatik are approximately $3.5 million.

The severance actions at Widia and in Austria in
1998 and at Ferromatik in 1997 were made to adjust staffing
levels based on sales projections and as a result of plant
modernization and improvements in manufacturing processes at
these locations. In addition, the installation of integrated
computer software at Widias European operations made
additional staffing reductions possible. Most of the positions
eliminated were direct manufacturing and factory overhead
positions, although some of the terminations occurred in sales
support and administrative areas.

23



---



Interest expense-net, including amortization of
debt issuance costs, increased in 1998 due primarily to higher
average debt levels associated with acquisitions.

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

Earnings before income taxes and minority
shareholders interests of $107.2 million in 1998 exceeded
the $90.4 million earned in 1997 by $16.8 million, or 19%. As a
percentage of sales, pretax earnings improved significantly from
6.3% to 7.1%, which is largely the result of improved
manufacturing margins as discussed above.


Income Taxes

The provision for income taxes in 1998 and 1997
includes U.S. federal and state and local income taxes and income
 taxes in other jurisdictions outside the U.S.


Milacron entered both years with sizable net
operating loss (NOL) carryforwards, along with valuation
allowances in certain jurisdictions against the NOL carryforwards
 and other deferred tax assets. Valuation allowances are
evaluated periodically and reversed when it is determined to be
more likely than not that the related deferred tax assets will be
 realized. The reversal of these valuation allowances serves to
reduce the effective tax rate. Valuation allowances subject to
future reversal were $28 million at year-end 1998, including $13
million related to Werkö.

The consolidated effective tax rate for 1998 was
26% compared to 19% in 1997, which in both cases is less than the
 U.S. federal statutory rate. The most significant factor in both
 years was the reversal of valuation allowances commensurate with
 our current expectations regarding the realization of net
operating loss carryforwards.

Earnings from Continuing Operations

Earnings from continuing operations, net of
minority shareholders interests, were $75.4 million, or
$1.91 per share (diluted), in 1998 compared with $69.1 million,
or $1.72 per share (diluted), in 1997. The increase in earnings
was caused by improved operating margins offset by higher
interest cost and a higher effective tax rate.


Discontinued Operations

In 1998, discontinued operations includes a
provision for the loss on the sale of MTG of $35.2 million, or
$.90 per share (diluted), and after-tax earnings from its
operations of $1.3 million, or $.04 per share (diluted).


Net Earnings

For 1998, net earnings were $41.5 million, or
$1.05 per share (diluted), compared to $80.6 million, or $2.01
per share (diluted), for 1997. The most significant items
affecting the net earnings comparison between years were the loss
 on the sale of MTG and its lower operating earnings in 1998
prior to the sale.


Year 2000

The term Year 2000 problem (Y2K)
refers to processing difficulties that may occur in information
technology (I.T.) systems and other equipment with embedded
microprocessors that were designed without considering the
distinction between dates in the 1900s and the 2000s.


Each of Milacrons business units, as well as
 our corporate headquarters, was responsible for developing and
executing comprehensive plans to minimize and, to the extent
possible, eliminate any major business interruptions that could
have been caused by the Y2K issue.

Milacrons Y2K effort focused primarily on
three important elements: 1) I.T. systems; 2) non-I.T. equipment
that includes embedded microprocessors; and 3) supplier and
infrastructure preparedness.

Milacron estimates that the incremental cost of
major system implementations and remediation projects was
approximately $14 million, including $10 million for newer,
more-modern systems. These costs did not have a material effect
on Milacrons financial position, results of operations or
cash flows.

As a result of our planning and implementation
efforts, we experienced no significant disruptions in
mission-critical information technology and non-information
technology systems. We are not aware of any material Y2K problems
 associated with our products or the products and services of
third parties. We will, however, continue to monitor our
mission-critical computer applications and the ability of our
suppliers and vendors to provide uninterrupted service throughout
 the year 2000 to ensure that any potential Y2K matters that may
arise are addressed promptly.

Market Risk

Foreign Currency Exchange Rate Risk

Milacron uses foreign currency forward contracts
to hedge its exposure to adverse changes in foreign currency
exchange rates related to firm commitments arising from
international transactions. The company does not hold or issue
derivative instruments for trading purposes. At December 31,
 1999, Milacron had outstanding forward contracts totaling $18.7
million compared to $19.1 million at December 31, 1998. The
potential loss from a hypothetical 10% adverse change in currency
 rates on Milacrons foreign exchange contracts at
December 31, 1999 or 1998 would


24



---



not significantly affect Milacrons
consolidated financial position, results of operations or cash
flows.


Interest Rate Risk

At December 31, 1999, Milacron had fixed
interest rate debt of $222 million, including $100 million of
7 7/8% Notes due May 15, 2000 and $115 million of
8 3/8% Notes due March 15, 2004. We also had
floating-rate debt totaling $301 million, with interest
fluctuating based primarily on changes in LIBOR. At
December 31, 1998, fixed rate debt totaled $228 million and
floating-rate debt totaled $293 million. We also sell up to $75
million of accounts receivable under our receivables purchase
agreement, which results in financing fees that fluctuate based
on changes in commercial paper rates. As a result, annual
interest expense and financing fees fluctuate based on changes in
 short-term borrowing rates. The potential loss on floating-rate
debt instruments from a hypothetical 10% change in interest rates
 would be approximately $2.3 million at December 31, 1999
and $2.1 million at December 31, 1998.


Liquidity and Sources of Capital

At December 31, 1999, Milacron had cash and
cash equivalents of $81 million, representing an increase of $32
million in 1999. The 1999 amount includes the $47 million
received in connection with the sale of the European extrusion
business, most of which was used to repay bank borrowings early
in 2000.


Operating activities provided $89 million of cash
in 1999, compared with $84 million provided in 1998. The increase
 in cash provided resulted primarily from steps taken to better
align production with demand and to improve inventory management.

In 1999, investing activities resulted in a $39
million use of cash, due to capital expenditures of $47 million
and acquisitions of $47 million, the effects of which were
partially offset by the proceeds from the sale of the European
extrusion business. In 1998, investing activities used $133
million of cash, including capital expenditures of $81 million
and acquisitions of $228 million, including $190 million for
Uniloy acquisition. In 1998, cash flows from investing activities
 benefited by $174 million from the sale of MTG.

Financing activities used $16 million of cash in
1999, compared with $72 million of cash provided in 1998.
Additional borrowings, net of repayments, provided $24 million of
 cash in 1999, while dividends and common share repurchases used
$40 million of cash.

In 1998, we announced a two million common share
repurchase program, of which 1.2 million shares were repurchased
through December 31, 1998. The remainder of shares were
repurchased in the first quarter of 1999. Including shares
repurchased to meet the current needs of management incentive
plans and the repurchase of .2 million additional treasury shares
 in the fourth quarter, Milacron used $22 million of cash for
share repurchases in 1999.

In February, 2000, we announced that
Milacrons Board of Directors had authorized the repurchase
up to four million additional common shares on the open market
beginning in the first quarter of the year.

As of December 31, 1999 and 1998,
Milacrons current ratio was 1.3.

As of December 31, 1999, Milacron had lines
of credit with various U.S. and non-U.S. banks of approximately
$563 million, including a $375 million committed revolving credit
 facility. Under the provisions of the facility, our additional
borrowing capacity totaled approximately $284 million at
December 31, 1999.

Total debt was $523 million at December 31,
1999, representing an increase of $2 million from
December 31, 1998. Total shareholders equity was $491
million at December 31, 1999, an increase of $14 million
from December 31, 1998. The increase resulted principally
from net earnings of $71 million, which more than offset $21
million of unfavorable foreign currency translation adjustments,
dividend payments and the effects of the share repurchase
program. The ratio of total debt to total capital (debt plus
equity) was 52% at December 31, 1999 and 1998. Substantially all
of the proceeds from the sale of our European extrusion machinery
 business were used to repay borrowings under lines of credit
early in 2000, which reduced the ratio of total debt to total
capital to less than 50%.

Our $100 million of 7 7/8% Notes are due on
May 15, 2000. We are considering various alternatives to
fund the repayment, including cash flow from operations, the
issuance of long-term debt in the U.S. or European public markets
 or drawing on lines of credit. We believe that Milacrons
cash flow from operations and its currently available credit
lines are sufficient to meet our operating, debt refinancing,
share repurchase and capital requirements in 2000.

Outlook

We believe the outlook for 2000 is mixed. While we
 are cautious about the industrial sectors of the economy, we
believe both Europe and North America are likely to experience at
 least some positive growth in 2000, while the recovery in Asia
should continue.


In the markets we serve, we are counting on only
2% economic growth on a global basis. However, we are introducing
 a number of new products and services, many of

25



---



which will be featured at major U.S. plastics and
metalworking trade shows later this year. In this scenario of
modest market expansion and aggressive new product introductions,
 we have set our blended sales growth target at 6% to 7% adjusted
 for the sale of the European extrusion business. Moreover, given
 the efficiency measures we initiated in 1999, we believe we can
achieve a 10% increase in earnings and a comparable increase in
operating cash flow in 2000.


Cautionary Statement

Milacron wishes to caution readers about all of
the forward-looking statements in the Outlook section
 and elsewhere. These include all statements that speak about the
 future or are based on our interpretation of factors that might
affect our businesses. Milacron believes the following important
factors, among others, could affect its actual results in 2000
and beyond and cause them to differ materially from those
expressed in any of our forward-looking statements:




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

Item 7A.   Quantitative and Qualitative
Disclosures about Market Risk

The Information required by Item 7A is
included in Item 7 on pages 24 and 25 of this Form
10-K.


Item 8.   Financial Statements and
Supplementary Data

Beginning on page 28 and continuing through
page 48 are the consolidated financial statements with applicable
 notes and the related Report of Independent Auditors, and the
supplementary financial information specified by Item 302 of
 Regulation S-K.


26



---



Responsibility for Financial Reporting

Financial Statements

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


Internal Control System

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


The company assessed its internal control system
as of December 31, 1999 in relation to criteria for
effective internal control over the preparation of its published
annual and quarterly financial statements described in
Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this assessment, the company
believes that, as of December 31, 1999, its system of
internal control over the preparation of its published annual and
 quarterly financial statements and over the safeguarding of
assets against unauthorized acquisition, use or disposition met
those criteria.

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

February 7, 2000

27



---



Consolidated Statements of Earnings





|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |       |       |  
|--------------------------------------------------------------------------------------------- | ------------------------------- | ------------------------------ | ------- | ----- | ----- | ---- | ------- | ----- | ----- | - | ------- | ----- | ----- | -
|                                                                                             
|                                                                                             
|(In millions, except per-share amounts)                                                       |                                 | 1999                           |         | 1998  |       | 1997
|                                                                                             
|                                                                                             
|Sales                                                                                         |                                 | $                              | 1,624.7 |       |       | $    | 1,514.7 |       |       | $ | 1,438.7 |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Cost of products sold                                                                         |                                 |                                | 1,201.6 |       |       |      | 1,092.3 |       |       |   | 1,051.5 |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              | Manufacturing margins           |                                |         | 423.1 |       |      |         | 422.4 |       |   |         | 387.2 |      
|Other costs and expenses                                                                      |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Selling and administrative      |                                |         | 272.9 |       |      |         | 271.6 |       |   |         | 259.9 |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Restructuring costs             |                                |         | 16.2  |       |      |         |      |       |   |         |      |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Gain on divestiture of business |                                |         | (13.1 | )     |      |         |      |       |   |         |      |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Other  net                     |                                |         | 10.0  |       |      |         | 12.9  |       |   |         | 9.4   |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                 | Total other costs and expenses |         |       | 286.0 |      |         |       | 284.5 |   |         |       | 269.3 |  
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Operating earnings                                                                            |                                 |                                | 137.1   |       |       |      | 137.9   |       |       |   | 117.9   |      
|Interest                                                                                      |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Income                          |                                |         | 1.6   |       |      |         | 2.5   |       |   |         | 2.4   |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Expense                         |                                |         | (39.8 | )     |      |         | (33.2 | )     |   |         | (29.9 | )    
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                 | Interest  net                 |         |       | (38.2 | )    |         |       | (30.7 | ) |         |       | (27.5 | )
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations before income taxes and
	minority shareholders interests |                                 |                                | 98.9    |       |       |      | 107.2   |       |       |   | 90.4    |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Provision for income taxes                                                                    |                                 |                                | 26.4    |       |       |      | 28.1    |       |       |   | 17.0    |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations before minority
	shareholders interests                  |                                 |                                | 72.5    |       |       |      | 79.1    |       |       |   | 73.4    |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Minority shareholders interests in earnings of subsidiaries                                  |                                 |                                | 2.4     |       |       |      | 3.7     |       |       |   | 4.3     |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Earnings from continuing operations                                                           |                                 |                                | 70.1    |       |       |      | 75.4    |       |       |   | 69.1    |      
|Discontinued operations net of income taxes                                                   |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Earnings from operations        |                                |         |      |       |      |         | 1.3   |       |   |         | 11.5  |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Loss on sale                    |                                |         |      |       |      |         | (35.2 | )     |   |         |      |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                 | Total discontinued operations  |         |       |      |      |         |       | (33.9 | ) |         |       | 11.5  |  
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Net earnings                                                                                  |                                 | $                              | 70.1    |       |       | $    | 41.5    |       |       | $ | 80.6    |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Earnings per common share                                                                     |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Basic                                                                                         |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Continuing operations           |                                | $       | 1.90  |       |      | $       | 1.93  |       |   | $       | 1.74  |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued operations         |                                |         |      |       |      |         | (.87  | )     |   |         | .29   |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                 | Net earnings                   |         | $     | 1.90  |      |         | $     | 1.06  |   |         | $     | 2.03  |  
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|Diluted                                                                                       |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Continuing operations           |                                | $       | 1.89  |       |      | $       | 1.91  |       |   | $       | 1.72  |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued operations         |                                |         |      |       |      |         | (.86  | )     |   |         | .29   |      
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                              |                                 | Net earnings                   |         | $     | 1.89  |      |         | $     | 1.05  |   |         | $     | 2.01  |  
|                                                                                              |                                 |                                |         |       |       |      |         |       |       |   |         |      
|                                                                                             

See notes to consolidated financial statements.


28



---



Consolidated Balance Sheets





|                                           |                                                                            |                                    |                   |         |       |       |         |         |       |       | 
|------------------------------------------ | -------------------------------------------------------------------------- | ---------------------------------- | ----------------- | ------- | ----- | ----- | ------- | ------- | ----- | ----- | 
|                                          
|                                          
|(In millions, except par value)            |                                                                            | 1999                               |                   | 1998   
|                                          
|                                          
|Assets                                     |                                                                            |                                    |                   |         |       |       |         |        
|Current assets                             |                                                                            |                                    |                   |         |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                  |                                    | $                 | 81.3    |       |       | $       | 48.9    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Notes and accounts receivable (less allowances of $12.1 in 1999
	and 1998) |                                    |                   | 217.3   |       |       |         | 226.1   |      
|                                           | Inventories                                                                |                                    |                   |         |       |       |         |         |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                            | Raw materials                      |                   |         | 44.4  |       |         |         | 45.6  |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                            | Work-in-process and finished parts |                   |         | 176.2 |       |         |         | 201.0 |      
|                                          
|                                          
|                                          
|                                          
|                                           |                                                                            | Finished products                  |                   |         | 152.8 |       |         |         | 154.4 |      
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                           |                                                                            |                                    | Total inventories |         |       | 373.4 |         |         |       | 401.0 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Other current assets                                                       |                                    |                   | 45.6    |       |       |         | 54.5    |      
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                           |                                                                            | Total current assets               |                   |         | 717.6 |       |         |         | 730.5 |      
|                                          
|                                          
|                                          
|                                          
|Property, plant and equipment  net        |                                                                            |                                    | 323.2             |         |       |       | 350.9   |        
|                                          
|                                          
|                                          
|                                          
|Goodwill                                   |                                                                            |                                    | 419.6             |         |       |       | 397.6   |        
|                                          
|                                          
|                                          
|                                          
|Other noncurrent assets                    |                                                                            |                                    | 76.3              |         |       |       | 78.1    |        
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|Total assets                               |                                                                            | $                                  | 1,536.7           |         |       | $     | 1,557.1 |        
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|Liabilities and Shareholders Equity       |                                                                            |                                    |                   |         |       |       |         |        
|Current liabilities                        |                                                                            |                                    |                   |         |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Borrowings under lines of credit                                           |                                    | $                 | 117.7   |       |       | $       | 177.4   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Long-term debt due within one year                                         |                                    |                   | 107.0   |       |       |         | 7.8     |      
|                                          
|                                          
|                                          
|                                          
|                                           | Trade accounts payable                                                     |                                    |                   | 130.7   |       |       |         | 155.2   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Advance billings and deposits                                              |                                    |                   | 28.8    |       |       |         | 31.7    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Accrued and other current liabilities                                      |                                    |                   | 172.7   |       |       |         | 178.8   |      
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                           |                                                                            | Total current liabilities          |                   |         | 556.9 |       |         |         | 550.9 |      
|                                          
|                                          
|                                          
|                                          
|Long-term accrued liabilities              |                                                                            |                                    | 190.8             |         |       |       | 193.9   |        
|                                          
|                                          
|                                          
|                                          
|Long-term debt                             |                                                                            |                                    | 298.1             |         |       |       | 335.7   |        
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                           | Total liabilities                                                          |                                    |                   | 1,045.8 |       |       |         | 1,080.5 |      
|                                          
|                                          
|                                          
|                                          
|Commitments and contingencies              |                                                                            |                                    |                  |         |       |       |        |        
|Shareholders equity                       |                                                                            |                                    |                   |         |       |       |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | 4% Cumulative Preferred shares                                             |                                    |                   | 6.0     |       |       |         | 6.0     |      
|                                          
|                                          
|                                          
|                                          
|                                           | Common shares, $1 par value (outstanding: 36.8 in 1999 and 37.8
	in 1998)  |                                    |                   | 36.8    |       |       |         | 37.8    |      
|                                          
|                                          
|                                          
|                                          
|                                           | Capital in excess of par value                                             |                                    |                   | 325.5   |       |       |         | 341.2   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Reinvested earnings                                                        |                                    |                   | 158.0   |       |       |         | 106.0   |      
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive income (loss)                              |                                    |                   | (35.4   | )     |       |         | (14.4   | )    
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                           |                                                                            | Total shareholders equity         |                   |         | 490.9 |       |         |         | 476.6 |      
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|Total liabilities and shareholders equity |                                                                            | $                                  | 1,536.7           |         |       | $     | 1,557.1 |        
|                                           |                                                                            |                                    |                   |         |       |       |         |        
|                                          

See notes to consolidated financial statements.


29



---



Consolidated Statements of Comprehensive Income and
Shareholders Equity





|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |       |  
|------------------------------------------------------------------------------- | ---------------------------------- | ------- | ------ | -------- |  | --------- | ------ | ------ |  | ---------- | ---- | ---------- |  | -------- | ----- | - |  |  | ------ | - |  |  | ------ | ----- | - |  | ------ | ----- | -
|                                                                               
|                                                                               
|                                                                                |                                    | Other   |        | 4% Cumu- |  | Common    |        |        |  | Total     
|                                                                                |                                    | Compre- |        | Compre-  |  | lative    |        | Shares |  | Capital in |      |            |  | Share-  
|(In millions, except share                                                      |                                    | hensive |        | hensive  |  | Preferred |        | $1 Par |  | Excess of  |      | Reinvested |  | holders
|and per-share amounts)                                                          |                                    | Income  |        | Income   |  | Shares    |        | Value  |  | Par Value  |      | Earnings   |  | Equity  
|                                                                               
|                                                                               
|Balance at year-end 1996                                                        |                                    |         |        |          |  |           | $ (9.6 | )      |  |            | $6.0 |            |  |          | $39.8 |   |  |  | $390.1 |   |  |  | $ 19.9 |       |   |  | $446.2 |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Stock options exercised and restricted stock awarded for 379,127
	common shares |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | .4    |   |  |  | 1.8    |   |  |  |        |       |   |  | 2.2    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Purchase of 589,695 treasury and other common shares                            |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | (.6   | ) |  |  | (14.1  | ) |  |  |        |       |   |  | (14.7  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Net earnings for the year                                                       |                                    |         | $ 80.6 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  | 80.6   |       |   |  | 80.6   |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Foreign currency translation adjustments                                        |                                    |         | (25.4  | )        |  |           | (25.4  | )      |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  | (25.4  | )    
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Total comprehensive income                                                      |                                    |         | $ 55.2 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Cash dividends                                                                  |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Preferred shares ($4.00 per share) |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (.2   | ) |  |        | (.2   | )
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Common shares ($.42 per share)     |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (16.8 | ) |  |        | (16.8 | )
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Balance at year-end 1997                                                        |                                    |         |        |          |  |           | (35.0  | )      |  |            | 6.0  |            |  |          | 39.6  |   |  |  | 377.8  |   |  |  | 83.5   |       |   |  | 471.9  |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Stock options exercised and restricted stock awarded for 340,251
	common shares |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | .3    |   |  |  | 5.7    |   |  |  |        |       |   |  | 6.0    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Purchase of 2,129,930 treasury and other common shares                          |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | (2.1  | ) |  |  | (42.3  | ) |  |  |        |       |   |  | (44.4  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Net earnings for the year                                                       |                                    |         | $ 41.5 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  | 41.5   |       |   |  | 41.5   |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Foreign currency translation adjustments                                        |                                    |         | 20.6   |          |  |           | 20.6   |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  | 20.6   |      
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Total comprehensive income                                                      |                                    |         | $ 62.1 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Cash dividends                                                                  |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Preferred shares ($4.00 per share) |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (.2   | ) |  |        | (.2   | )
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Common shares ($.48 per share)     |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (18.8 | ) |  |        | (18.8 | )
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Balance at year-end 1998                                                        |                                    |         |        |          |  |           | (14.4  | )      |  |            | 6.0  |            |  |          | 37.8  |   |  |  | 341.2  |   |  |  | 106.0  |       |   |  | 476.6  |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Stock options exercised and restricted stock awarded for 90,414
	common shares  |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | .1    |   |  |  | 1.5    |   |  |  |        |       |   |  | 1.6    |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Purchase of 1,064,260 treasury and other common shares                          |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          | (1.1  | ) |  |  | (17.2  | ) |  |  |        |       |   |  | (18.3  | )    
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Net earnings for the year                                                       |                                    |         | $ 70.1 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  | 70.1   |       |   |  | 70.1   |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Foreign currency translation adjustments                                        |                                    |         | (21.0  | )        |  |           | (21.0  | )      |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  | (21.0  | )    
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Total comprehensive income                                                      |                                    |         | $ 49.1 |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Cash dividends                                                                  |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Preferred shares ($4.00 per share) |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (.2   | ) |  |        | (.2   | )
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|                                                                                | Common shares ($.48 per share)     |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        | (17.9 | ) |  |        | (17.9 | )
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|Balance at year-end 1999                                                        |                                    |         |        |          |  |           | $(35.4 | )      |  |            | $6.0 |            |  |          | $36.8 |   |  |  | $325.5 |   |  |  | $158.0 |       |   |  | $490.9 |      
|                                                                                |                                    |         |        |          |  |           |        |        |  |            |      |            |  |          |       |   |  |  |        |   |  |  |        |       |   |  |        |      
|                                                                               

See notes to consolidated financial statements.


30



---



Consolidated Statements of Cash Flows





|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |   |       |       |       |  
|--------------------------------------------------------------------------------- | ------------------------------- | ---------------------------------------------- | ---------------------------------------------------- | ----------------------------------------- | ----- | ----- | ----- | - | ------ | ------ | ----- | - | ----- | ----- | ----- | -
|                                                                                 
|                                                                                 
|(In millions)                                                                     |                                 | 1999                                           |                                                      | 1998                                      |       | 1997 
|                                                                                 
|                                                                                 
|Increase (decrease) in cash and cash equivalents
	Operating activities cash flows |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Net earnings                                   |                                                      | $                                         | 70.1  |       |       | $ | 41.5   |        |       | $ | 80.6  |      
|                                                                                  |                                 | Operating activities providing (using) cash    |                                                      |                                           |       |       |       |   |        |        |       |   |       |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Depreciation and amortization                        |                                           |       | 58.3  |       |   |        | 57.4   |       |   |       | 53.7  |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Restructuring costs                                  |                                           |       | 16.2  |       |   |        |       |       |   |       |      |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Gain on divestiture of business                      |                                           |       | (13.1 | )     |   |        |       |       |   |       |      |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Loss on sale of discontinued machine tools segment   |                                           |       |      |       |   |        | 35.2   |       |   |       |      |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Deferred income taxes                                |                                           |       | 10.1  |       |   |        | (6.3   | )     |   |       | (14.5 | )    
|                                                                                  |                                 |                                                | Working capital changes                              |                                           |       |       |       |   |        |        |       |   |       |       |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                |                                                      | Notes and accounts receivable             |       |       | (19.0 | ) |        |        | 10.4  |   |       |       | (20.7 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                |                                                      | Inventories                               |       |       | (9.9  | ) |        |        | (45.5 | ) |       |       | (16.3 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                |                                                      | Other current assets                      |       |       | (2.6  | ) |        |        | .8    |   |       |       | (6.1  | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                |                                                      | Trade accounts payable                    |       |       | (9.2  | ) |        |        | (.4   | ) |       |       | 21.8  |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                |                                                      | Other current liabilities                 |       |       | (4.7  | ) |        |        | 1.0   |   |       |       | 6.8   |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Decrease (increase) in other noncurrent assets       |                                           |       | 1.7   |       |   |        | (6.0   | )     |   |       | .1    |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Increase (decrease) in long-term accrued liabilities |                                           |       | (6.0  | )     |   |        | (1.9   | )     |   |       | 13.2  |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 |                                                | Other  net                                          |                                           |       | (2.5  | )     |   |        | (2.7   | )     |   |       | (2.3  | )    
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|                                                                                  |                                 |                                                |                                                      | Net cash provided by operating activities |       |       | 89.4  |   |        |        | 83.5  |   |       |       | 116.3 |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Investing activities cash flows |                                                |                                                      |                                           |       |       |       |   |        |        |       |   |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Capital expenditures                           |                                                      |                                           | (47.3 | )     |       |   | (81.4  | )      |       |   | (79.5 | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Net disposals of property, plant and equipment |                                                      |                                           | 5.9   |       |       |   | 2.4    |        |       |   | 5.7   |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Acquisitions                                   |                                                      |                                           | (47.0 | )     |       |   | (228.0 | )      |       |   | (25.9 | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Divestitures                                   |                                                      |                                           | 49.2  |       |       |   | 173.7  |        |       |   |      |      
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|                                                                                  |                                 |                                                | Net cash used by investing activities                |                                           |       | (39.2 | )     |   |        | (133.3 | )     |   |       | (99.7 | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Financing activities cash flows |                                                |                                                      |                                           |       |       |       |   |        |        |       |   |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Dividends paid                                 |                                                      |                                           | (18.1 | )     |       |   | (19.0  | )      |       |   | (17.0 | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Issuance in long-term debt                     |                                                      |                                           | 2.0   |       |       |   | 25.7   |        |       |   | 14.4  |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Repayments of long-term debt                   |                                                      |                                           | (6.3  | )     |       |   | (6.0   | )      |       |   | (4.9  | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Increase in borrowings under lines of credit   |                                                      |                                           | 28.3  |       |       |   | 105.5  |        |       |   | 3.7   |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Issuance of common shares                      |                                                      |                                           | .1    |       |       |   | 6.0    |        |       |   | 2.2   |      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                 | Purchase of treasury and other common shares   |                                                      |                                           | (22.0 | )     |       |   | (40.6  | )      |       |   | (14.7 | )    
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|                                                                                  |                                 |                                                | Net cash provided (used) by financing activities     |                                           |       | (16.0 | )     |   |        | 71.6   |       |   |       | (16.3 | )    
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Effect of exchange rate fluctuations on cash and cash
	equivalents                |                                 |                                                | (1.8                                                 | )                                         |       |       | 1.4   |   |        |        | (2.4  | )
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|Increase (decrease) in cash and cash equivalents                                  |                                 |                                                | 32.4                                                 |                                           |       |       | 23.2  |   |        |        | (2.1  | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash and cash equivalents at beginning of year                                    |                                 |                                                | 48.9                                                 |                                           |       |       | 25.7  |   |        |        | 27.8  |  
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|Cash and cash equivalents at end of year                                          |                                 | $                                              | 81.3                                                 |                                           |       | $     | 48.9  |   |        | $      | 25.7  |  
|                                                                                  |                                 |                                                |                                                      |                                           |       |       |       |   |        |        |       |  
|                                                                                 

See notes to consolidated financial statements.


31



---



Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Change in Fiscal Year End

Effective in 1998, the company changed its fiscal
year from a 52-53 week year ending on the Saturday closest
to December 31 to a calendar year ending on
December 31. Fiscal year ends are as follows:




| |                         
| | ------------------------
| | 1999:  December 31, 1999
| | 1998:  December 31, 1998
| | 1997:  December 27, 1997

The change in fiscal year did not have a material
effect on financial condition, results of operations or cash
flows for the year 1998.

Use of Estimates

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


Consolidation

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


Foreign Currency Translation

Assets and liabilities of the companys
non-U.S. operations are translated into U.S. dollars at
period-end exchange rates. Net exchange gains or losses resulting
 from such translation are excluded from net earnings and
accumulated in a separate component of shareholders equity.
 Income and expense accounts are translated at weighted-average
exchange rates for the periods presented. Gains and losses from
foreign currency transactions are included in other costs and
expenses-net in the Consolidated Statements of Earnings. Such
amounts were as follows: 1999  $1.0 million gain;
1998  $1.4 million gain; 1997  $1.6 million
 gain. Gains and losses on foreign exchange contracts that are
designated as hedges of foreign currency commitments are
recognized as part of the specific transactions hedged under the
deferral method of accounting consistent with the requirement for
 a firm commitment.


Revenue Recognition

The companys policy is to recognize sales
when products are shipped to unaffiliated customers.


Cash and Cash Equivalents

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


Inventory Valuation

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


Property, Plant and Equipment

Property, plant and equipment are stated at cost
or, for assets acquired through business combinations, at fair
value at the dates of the respective acquisitions. For financial
reporting purposes, depreciation is generally determined on the
straight-line method using estimated useful lives of the assets.
Depreciation expense was $47.0 million, $49.4 million and $47.6
million for 1999, 1998 and 1997, respectively, of which $6.0
million and $5.9 million in 1998 and 1997, respectively, relates
to discontinued operations.


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

Goodwill

Goodwill, which represents the excess of
acquisition cost over the net assets acquired in business
combinations, is amortized on the straight-line method over
periods ranging from 25 to 40 years. Amortization expense
charged to earnings, all of which relates to continuing
operations, amounted to $11.3 million, $8.0 million and $6.1
million in 1999, 1998 and 1997, respectively.


The carrying amount of goodwill is reviewed
annually using estimated undiscounted cash flows for the
businesses acquired over the remaining amortization periods. If,
based on this analysis, the goodwill arising from a particular
acquisition were found to be not recoverable, its carrying value
would be reduced by the amount of the anticipated cash flow
deficit through a charge to earnings. As required by Statement of
 Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
 to be Disposed Of, the company

32



---



Notes to Consolidated Financial Statements


evaluates long-lived assets for impairment when
facts and circumstances suggest that the carrying amounts of
these assets may not be recoverable. Goodwill associated with
assets acquired in business combinations is included in these
impairment evaluations when appropriate.

Retirement Benefit Plans

The company maintains various defined benefit and
defined contribution pension plans covering substantially all
U.S. employees and certain non-U.S. employees. For defined
benefit plans, pension benefits are based primarily on length of
service and compensation. The companys policy is to fund
the plans in accordance with applicable laws and regulations.


Stock-Based Compensation

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


Income Taxes

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


Earnings Per Common Share

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


Recently Issued Pronouncement

In 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and
Hedging Activities (SFAS No. 133). This standard was
originally to have been effective for the company beginning in
2000. However, in July, 1999, the FASB issued Statement of
Financial Accounting Standards No. 137, which postpones the
mandatory adoption of SFAS No. 133 by the company until
2001. SFAS No. 133 establishes comprehensive accounting and
reporting requirements for the recognition and measurement of
derivative financial instruments and hedging activities,
including a requirement that derivatives be measured at fair
value and recognized in the statement of financial position. The
company enters into forward contracts, which are a form of
derivative instrument, to minimize the effects of foreign
currency exchange rate fluctuations. The company is evaluating
the effect of SFAS No. 133 on its financial position and
results of operations. However, management currently believes
that the effects will not be material.


Restructuring Costs

In 1999, the company implemented two separate
initiatives to improve operating efficiency and strengthen
synergies between certain recently acquired businesses and its
previously existing operations. These actions had the effect of
reducing pretax earnings in the fourth quarter of 1999 by $16.2
million ($10.9 million after tax).


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

The total cost of the plan, which was implemented
in the fourth quarter of 1999 and which is scheduled to be
completed by September 30, 2000, is expected to be $6.7
million. Of this amount, $5.7 million is included in a reserve
established in the allocation of the Uniloy acquisition cost. The
 remaining $1.0 million is being charged to expense as the
related costs are incurred, including $.2 million in the fourth
quarter of 1999. Charges against the $5.7 million reserve during
the fourth quarter were $.7 million. Foreign currency exchange
rate fluctuations since the acquisition date have had the effect
of reducing the reserve by $.7 million.

33



---



Notes to Consolidated Financial Statements


The total cash cost of the consolidation will be
approximately $4 million, which is net of the expected proceeds
from the sale of two facilities in Italy. The consolidation will
not adversely affect future sales revenue and is expected to
result in annual pretax cost savings of approximately $3 million,
 which will begin to phase-in during the first half of 2000.

In December, the company implemented a second plan
 to improve operating efficiency and reduce costs at additional
businesses. The actions contemplated by the plan involve both
segments operations in North America and Europe. The plan
involves the closure of four smaller manufacturing facilities,
the operations of which will be transferred to other locations,
and the elimination of approximately 300 manufacturing and
administrative positions worldwide. The total cost of
implementing the plan is expected to be $20.8 million, including
$16.0 million in 1999 and $4.8 million in 2000. Of the 1999
amount, $14.1 million is included in a reserve for employee
termination benefits and facility exit costs that was recorded in
 the fourth quarter. Charges against this reserve through the end
 of the year totaled $.9 million. The total cost of the plan also
 includes 1999 charges of $1.7 million for supplemental early
retirement benefits for certain employees that will be funded
through pension plans and $5.0 million for additional costs that
are being charged to expense as incurred. Of the latter amount,
$.2 million was incurred in the fourth quarter of 1999.

The total cash cost of the plan, including capital
 expenditures of $2.5 million, is expected to be approximately
$17.7 million, most of which will be expended in 2000. Completion
 of the plan is expected to result in annual pretax cost savings
of more than $20 million, which will gradually phase-in during
2000 and be fully realized in 2001.

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

|                                                         |  |      |      | 
|-------------------------------------------------------- |  | ---- | ---- | 
|                                                        
|                                                        
|Restructuring Costs                                     
|                                                        
|(In millions)                                            |  | 1999
|                                                        
|                                                        
|Accrual for termination benefits and facility exit costs |  | $    | 14.1 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Supplemental retirement benefits                         |  |      | 1.7  | 
|                                                        
|                                                        
|                                                        
|                                                        
|Other costs                                              |  |      | .2   | 
|                                                         |  |      |      | 
|                                                         |  |      | 16.0 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Costs related to Uniloy consolidation                    |  |      | .2   | 
|                                                         |  |      |      | 
|                                                         |  | $    | 16.2 | 
|                                                         |  |      |      | 
|                                                        

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

|                       |                      |           |       |        |  |         |       |       |   |  |       |       | 
|---------------------- | -------------------- | --------- | ----- | ------ |  | ------- | ----- | ----- | - |  | ----- | ----- | 
|                      
|                      
|Restructuring Reserves
|                      
|                       |                      | Beginning |       |        |  | Ending 
|(In millions)          |                      | Balance   |       | Change |  | Balance
|                      
|                      
|Uniloy consolidation   |                      |           |       |        |  |         |       |       |   |  |       |      
|                      
|                      
|                      
|                      
|                       | Termination benefits |           |       | $ 4.6  |  |         |       | $(1.0 | ) |  |       | $ 3.6 | 
|                      
|                      
|                      
|                      
|                       | Facility exit costs  |           |       | 1.1    |  |         |       | (.4   | ) |  |       | .7    | 
|                       |                      |           |       |        |  |         |       |       |   |  |       |      
|                       |                      |           | 5.7   |        |  |         | (1.4  | )     |   |  | 4.3   |      
|Restructuring costs    |                      |           |       |        |  |         |       |       |   |  |       |      
|                      
|                      
|                      
|                      
|                       | Termination benefits |           |       | 10.0   |  |         |       | (.6   | ) |  |       | 9.4   | 
|                      
|                      
|                      
|                      
|                       | Facility exit costs  |           |       | 4.1    |  |         |       | (.3   | ) |  |       | 3.8   | 
|                       |                      |           |       |        |  |         |       |       |   |  |       |      
|                       |                      |           | 14.1  |        |  |         | (.9   | )     |   |  | 13.2  |      
|                       |                      |           |       |        |  |         |       |       |   |  |       |      
|Total reserves         |                      |           | $19.8 |        |  |         | $(2.3 | )     |   |  | $17.5 |      
|                       |                      |           |       |        |  |         |       |       |   |  |       |      
|                       |                      |           |       |        |  |         |       |       |   |  |       |      
|                      

Divestiture of Business

In December 1999, the company sold its
European plastics extrusion systems business for approximately
$47 million, subject to post-closing adjustments, and recorded a
pretax gain of $13.1 million ($10.1 million after tax).
Headquartered in Vienna, Austria, the business had 1999 sales to
unaffiliated customers of $62 million, principally to markets in
Europe, Asia and South America, and employs approximately 325
people. The business was sold to redeploy assets to other
businesses. Initially, the cash proceeds were used to repay
short-term borrowings under lines of credit early in 2000.


Discontinued Operations

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


34



---



Notes to Consolidated Financial Statements


the third quarter of 1998. Operating results from
discontinued operations are as follows:

|                             |  |      |       |      |  |   |       |  
|---------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                            
|                            
|(In millions)                |  | 1998 |       | 1997
|                            
|                            
|Net sales                    |  | $    | 346.4 |      |  | $ | 458.0 |  
|                             |  |      |       |      |  |   |       |  
|Earnings before income taxes |  | $    | 1.7   |      |  | $ | 14.5  |  
|                            
|                            
|                            
|                            
|Provision for income taxes   |  |      | (.4   | )    |  |   | (3.0  | )
|                             |  |      |       |      |  |   |       |  
|Earnings from operations     |  | $    | 1.3   |      |  | $ | 11.5  |  
|                             |  |      |       |      |  |   |       |  
|                            

Acquisitions

In the third quarter of 1997, the company acquired
 Minnesota Twist Drill, Inc., a maker of high-speed steel drills,
 and Data Flute CNC, Inc., a manufacturer of high-performance
solid carbide end mills. Each business had annual sales of
approximately $10 million as of the respective acquisition dates.


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

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

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

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

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

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

In the third quarter of 1999, the company made
three acquisitions in the metalworking technologies segment. In
August, the company acquired Producto Chemical, Inc. (Producto),
a U.S. manufacturer of process cleaners, washers, corrosion
inhibitors and specialty products for metalworking with annual
sales approaching $5 million as of the acquisition date.
Productos products will be marketed worldwide through the
companys sales and distribution channels. In September, the
 company acquired Oak International, Inc. (Oak), a supplier of
metalforming lubricants and process cleaners and a leading
supplier of lubricants used in the manufacture of industrial heat
 exchangers and air conditioners. Headquartered in Michigan, Oak
has two manufacturing plants in the U.S. and one in the U.K. and
had annual sales approaching $12 million as of the acquisition
date. Also in September, the company acquired the Micro Carbide
product line of round, solid-carbide metalworking tools, which
includes reamers, step drills and miniature tools. These products
 are being produced at our Data Flute CNC facility.

All of the acquisitions were accounted for under
the purchase method and were financed through the use of
available cash and borrowings under lines of credit. The
aggregate cost of the acquisitions, including professional fees
and other related costs, is expected to total $32.4 million for
1999, and was $246.2 million for 1998 and $27.4 million for 1997.
 The allocation of the aggregate cost of the acquisitions to the
assets acquired and liabilities assumed is presented in the table
 that follows.

35



---



Notes to Consolidated Financial Statements


|                                                             |                   |      |      |      |  |      |       |       |  |   |      |      | 
|------------------------------------------------------------ | ----------------- | ---- | ---- | ---- |  | ---- | ----- | ----- |  | - | ---- | ---- | 
|                                                            
|                                                            
|Allocation of Acquisition Cost                              
|                                                            
|(In millions)                                                |                   | 1999 |      | 1998 |  | 1997
|                                                            
|                                                            
|Cash and cash equivalents                                    |                   | $    | .7   |      |  | $    | 2.2   |       |  | $ | .6   |     
|                                                            
|                                                            
|                                                            
|                                                            
|Accounts receivable                                          |                   |      | 4.0  |      |  |      | 33.9  |       |  |   | 3.6  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Inventories                                                  |                   |      | 5.0  |      |  |      | 66.6  |       |  |   | 4.0  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Other current assets                                         |                   |      | .3   |      |  |      | 2.7   |       |  |   | .1   |     
|                                                            
|                                                            
|                                                            
|                                                            
|Property, plant and equipment                                |                   |      | 4.5  |      |  |      | 31.2  |       |  |   | 7.0  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Goodwill                                                     |                   |      | 21.6 |      |  |      | 196.5 |       |  |   | 14.4 |     
|                                                            
|                                                            
|                                                            
|                                                            
|Other noncurrent assets                                      |                   |      |     |      |  |      | 8.5   |       |  |   |     |     
|                                                             |                   |      |      |      |  |      |       |       |  |   |      |     
|                                                             | Total assets      |      |      | 36.1 |  |      |       | 341.6 |  |   |      | 29.7 | 
|                                                             |                   |      |      |      |  |      |       |       |  |   |      |     
|Short term borrowings and long-term debt due within one year |                   |      | .7   |      |  |      | 7.4   |       |  |   |     |     
|                                                            
|                                                            
|                                                            
|                                                            
|Other current liabilities                                    |                   |      | 1.7  |      |  |      | 76.0  |       |  |   | 2.1  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term accrued liabilities                                |                   |      | .5   |      |  |      | 1.0   |       |  |   | .2   |     
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term debt                                               |                   |      | .8   |      |  |      | 11.0  |       |  |   |     |     
|                                                             |                   |      |      |      |  |      |       |       |  |   |      |     
|                                                             | Total liabilities |      |      | 3.7  |  |      |       | 95.4  |  |   |      | 2.3  | 
|                                                             |                   |      |      |      |  |      |       |       |  |   |      |     
|Total acquisition cost                                       |                   | $    | 32.4 |      |  | $    | 246.2 |       |  | $ | 27.4 |     
|                                                             |                   |      |      |      |  |      |       |       |  |   |      |     
|                                                            

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

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

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

Research and Development

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


|                         |  |      |      |      |  |      |      |  |  |   |      | 
|------------------------ |  | ---- | ---- | ---- |  | ---- | ---- |  |  | - | ---- | 
|                        
|                        
|Research and Development
|                        
|(In millions)            |  | 1999 |      | 1998 |  | 1997
|                        
|                        
|Research and development |  | $    | 34.5 |      |  | $    | 36.7 |  |  | $ | 35.6 | 
|                         |  |      |      |      |  |      |      |  |  |   |      | 
|                        

Retirement Benefit Plans

Pension cost for all defined benefit plans is
summarized in the following table. For all years presented, the
table includes amounts for plans for certain employees in the
U.S. and Germany. The amounts for 1998 and 1997 include the plan
for United Kingdom (U.K.) employees.


36



---



Notes to Consolidated Financial Statements


|                                                 |  |      |       |      |  |      |       |   |  |   |       |  
|------------------------------------------------ |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|                                                
|                                                
|Pension Cost                                    
|                                                
|(In millions)                                    |  | 1999 |       | 1998 |  | 1997
|                                                
|                                                
|Service cost (benefits earned during the period) |  | $    | 6.4   |      |  | $    | 10.0  |   |  | $ | 9.6   |  
|                                                
|                                                
|                                                
|                                                
|Interest cost on projected benefit obligation    |  |      | 33.5  |      |  |      | 38.8  |   |  |   | 38.9  |  
|                                                
|                                                
|                                                
|                                                
|Expected return on plan assets                   |  |      | (40.1 | )    |  |      | (43.8 | ) |  |   | (42.2 | )
|                                                
|                                                
|                                                
|                                                
|Supplemental retirement benefits                 |  |      | 1.5   |      |  |      |      |   |  |   |      |  
|                                                
|                                                
|                                                
|                                                
|Amortization of unrecognized transition asset    |  |      | (1.5  | )    |  |      | (5.4  | ) |  |   | (5.3  | )
|                                                
|                                                
|                                                
|                                                
|Amortization of unrecognized prior service cost  |  |      | .5    |      |  |      | 1.3   |   |  |   | 1.3   |  
|                                                
|                                                
|                                                
|                                                
|Amortization of unrecognized gains and losses    |  |      | 1.0   |      |  |      | .4    |   |  |   | (.2   | )
|                                                 |  |      |       |      |  |      |       |   |  |   |       |  
|Pension cost                                     |  | $    | 1.3   |      |  | $    | 1.3   |   |  | $ | 2.1   |  
|                                                 |  |      |       |      |  |      |       |   |  |   |       |  
|                                                

The above amounts include income of $1.0 million
in 1998 and $1.7 million in 1997 related to the plan for U.K.
employees. Such amounts are included in the operating results of
the discontinued machine tools segment in the Consolidated
Statements of Earnings for those years. Amounts related to the
plans for U.S. employees that are included in discontinued
operations cannot be precisely quantified.

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

|                                         |  |      |        |      |  |   |        |  
|---------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                        
|                                        
|Projected Benefit Obligation            
|                                        
|(In millions)                            |  | 1999 |        | 1998
|                                        
|                                        
|Balance at beginning of year             |  | $    | (525.1 | )    |  | $ | (540.3 | )
|                                        
|                                        
|                                        
|                                        
|Service cost                             |  |      | (6.4   | )    |  |   | (10.0  | )
|                                        
|                                        
|                                        
|                                        
|Interest cost                            |  |      | (33.5  | )    |  |   | (38.8  | )
|                                        
|                                        
|                                        
|                                        
|Benefits paid                            |  |      | 36.0   |      |  |   | 35.7   |  
|                                        
|                                        
|                                        
|                                        
|Actuarial gain (loss)                    |  |      | 22.9   |      |  |   | (18.4  | )
|                                        
|                                        
|                                        
|                                        
|Supplemental retirement benefits         |  |      | (1.5   | )    |  |   |       |  
|                                        
|                                        
|                                        
|                                        
|Sale of machine tools segment            |  |      |       |      |  |   | 90.7   |  
|                                        
|                                        
|                                        
|                                        
|Change in discount rate                  |  |      | 46.2   |      |  |   | (41.9  | )
|                                        
|                                        
|                                        
|                                        
|Foreign currency translation adjustments |  |      | 6.1    |      |  |   | (2.1   | )
|                                         |  |      |        |      |  |   |        |  
|Balance at end of year                   |  | $    | (455.3 | )    |  | $ | (525.1 | )
|                                         |  |      |        |      |  |   |        |  
|                                        

The following table summarizes the changes in plan
 assets for the U.S. and U.K. plans. Consistent with customary
practice in Germany, the plans for employees in that country have
 not been funded.

|                              |  |      |       |      |  |   |       |  
|----------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                             
|                             
|Plan Assets                  
|                             
|(In millions)                 |  | 1999 |       | 1998
|                             
|                             
|Balance at beginning of year  |  | $    | 449.6 |      |  | $ | 511.5 |  
|                             
|                             
|                             
|                             
|Actual investment return      |  |      | 84.8  |      |  |   | 42.8  |  
|                             
|                             
|                             
|                             
|Benefits paid                 |  |      | (32.9 | )    |  |   | (32.8 | )
|                             
|                             
|                             
|                             
|Sale of machine tools segment |  |      |      |      |  |   | (71.9 | )
|                              |  |      |       |      |  |   |       |  
|Balance at end of year        |  | $    | 501.5 |      |  | $ | 449.6 |  
|                              |  |      |       |      |  |   |       |  
|                             

The following table sets forth the funded status
of the plans for U.S. employees at year-end 1999 and 1998.

|                                                                                |  |      |        |      |  |   |        |  
|------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|                                                                               
|                                                                               
|Funded Status at Year-end                                                      
|                                                                               
|(In millions)                                                                   |  | 1999 |        | 1998
|                                                                               
|                                                                               
|Vested benefit obligation                                                       |  | $    | (359.9 | )    |  | $ | (419.7 | )
|                                                                                |  |      |        |      |  |   |        |  
|Accumulated benefit obligation                                                  |  | $    | (373.3 | )    |  | $ | (435.4 | )
|                                                                                |  |      |        |      |  |   |        |  
|Projected benefit obligation                                                    |  | $    | (413.9 | )    |  | $ | (483.4 | )
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Plan assets at fair value                                                       |  |      | 501.5  |      |  |   | 449.6  |  
|                                                                                |  |      |        |      |  |   |        |  
|Excess (deficiency) of plan assets in relation to projected
	benefit obligation |  |      | 87.6   |      |  |   | (33.8  | )
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Unrecognized net (gain) loss                                                    |  |      | (90.8  | )    |  |   | 29.6   |  
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Unrecognized prior service cost                                                 |  |      | 3.2    |      |  |   | 3.7    |  
|                                                                               
|                                                                               
|                                                                               
|                                                                               
|Unamortized transition asset                                                    |  |      |       |      |  |   | (1.4   | )
|                                                                                |  |      |        |      |  |   |        |  
|Prepaid (accrued) pension cost                                                  |  | $    |       |      |  | $ | (1.9   | )
|                                                                                |  |      |        |      |  |   |        |  
|                                                                               

The assets of the principal U.S. plan consist
principally of stocks, debt securities and mutual funds. The plan
 also includes common shares of the company with a market value
of $31.7 million in 1999 and $28.0 million in 1998.

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

37



---



Notes to Consolidated Financial Statements


|                               |  |      |       |      |  |   |       |  
|------------------------------ |  | ---- | ----- | ---- |  | - | ----- | -
|                              
|                              
|Status at Year-end            
|                              
|(In millions)                  |  | 1999 |       | 1998
|                              
|                              
|Vested benefit obligation      |  | $    | (36.3 | )    |  | $ | (35.6 | )
|                               |  |      |       |      |  |   |       |  
|Accumulated benefit obligation |  | $    | (38.5 | )    |  | $ | (38.1 | )
|                               |  |      |       |      |  |   |       |  
|Projected benefit obligation   |  | $    | (41.4 | )    |  | $ | (41.7 | )
|                              
|                              
|                              
|                              
|Unrecognized net (gain) loss   |  |      | 1.4   |      |  |   | (1.3  | )
|                               |  |      |       |      |  |   |       |  
|Accrued pension cost           |  | $    | (40.0 | )    |  | $ | (43.0 | )
|                               |  |      |       |      |  |   |       |  
|                              

The following table presents the weighted-average
actuarial assumptions used for all defined benefit plans in 1999,
 1998 and 1997.

|                                                 |  |      |     |      |  |      |     |   |  |  |     |  
|------------------------------------------------ |  | ---- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                                
|                                                
|Actuarial Assumptions                           
|                                                
|                                                 |  | 1999 |     | 1998 |  | 1997
|                                                
|                                                
|Discount rate                                    |  |      | 7.6 | %    |  |      | 6.8 | % |  |  | 7.4 | %
|                                                
|                                                
|                                                
|                                                
|Expected long-term rate of return on plan assets |  |      | 9.5 | %    |  |      | 9.5 | % |  |  | 9.6 | %
|                                                
|                                                
|                                                
|                                                
|Rate of increase in future compensation levels   |  |      | 5.0 | %    |  |      | 5.0 | % |  |  | 5.2 | %
|                                                

The company also maintains certain defined
contribution and 401(k) plans. Participation in these plans is
available to certain U.S. employees. Costs for these plans were
$10.0 million, $9.7 million and $8.5 million in 1999, 1998 and
1997, respectively.

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

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

|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|-------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  | - | --- | 
|                                                              
|                                                              
|Postretirement Health Care Cost                               
|                                                              
|(In millions)                                                  |  | 1999 |     | 1998 |  | 1997
|                                                              
|                                                              
|Service cost (benefits earned during the period)               |  | $    | .2  |      |  | $    | .3  |  |  | $ | .3  | 
|                                                              
|                                                              
|                                                              
|                                                              
|Interest cost on accumulated postretirement benefit obligation |  |      | 1.9 |      |  |      | 2.7 |  |  |   | 3.0 | 
|                                                              
|                                                              
|                                                              
|                                                              
|Amortization of unrecognized gains                             |  |      | (.4 | )    |  |      |    |  |  |   |    | 
|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|Postretirement heath care cost                                 |  | $    | 1.7 |      |  | $    | 3.0 |  |  | $ | 3.3 | 
|                                                               |  |      |     |      |  |      |     |  |  |   |     | 
|                                                              

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

|                                                  |  |      |       |      |  |   |       |  
|------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|                                                 
|                                                 
|Accumulated Postretirement Health Care Obligation
|                                                 
|(In millions)                                     |  | 1999 |       | 1998
|                                                 
|                                                 
|Balance at beginning of year                      |  | $    | (29.3 | )    |  | $ | (38.7 | )
|                                                 
|                                                 
|                                                 
|                                                 
|Service cost                                      |  |      | (.2   | )    |  |   | (.3   | )
|                                                 
|                                                 
|                                                 
|                                                 
|Interest cost                                     |  |      | (1.9  | )    |  |   | (2.7  | )
|                                                 
|                                                 
|                                                 
|                                                 
|Benefits paid net of contributions                |  |      | 3.5   |      |  |   | 3.4   |  
|                                                 
|                                                 
|                                                 
|                                                 
|Actuarial gain                                    |  |      |      |      |  |   | 3.9   |  
|                                                 
|                                                 
|                                                 
|                                                 
|Sale of machine tools segment                     |  |      |      |      |  |   | 6.1   |  
|                                                 
|                                                 
|                                                 
|                                                 
|Change in discount rate                           |  |      | 2.0   |      |  |   | (1.0  | )
|                                                  |  |      |       |      |  |   |       |  
|Balance at end of year                            |  | $    | (25.9 | )    |  | $ | (29.3 | )
|                                                  |  |      |       |      |  |   |       |  
|                                                 

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

|                                              |                                    |      |       |       |   |   |       |       |  
|--------------------------------------------- | ---------------------------------- | ---- | ----- | ----- | - | - | ----- | ----- | -
|                                             
|                                             
|                                             
|Accrued Postretirement Health Care Benefits  
|                                             
|                                             
|(In millions)                                 |                                    | 1999 |       | 1998 
|                                             
|                                             
|Accumulated postretirement benefit obligation |                                    |      |       |       |   |   |       |      
|                                             
|                                             
|                                             
|                                             
|                                              | Retirees                           |      | $     | (20.2 | ) |   | $     | (22.9 | )
|                                             
|                                             
|                                             
|                                             
|                                              | Fully eligible active participants |      |       | (3.7  | ) |   |       | (2.3  | )
|                                             
|                                             
|                                             
|                                             
|                                              | Other active participants          |      |       | (2.0  | ) |   |       | (4.1  | )
|                                              |                                    |      |       |       |   |   |       |      
|                                              |                                    |      | (25.9 | )     |   |   | (29.3 | )    
|                                             
|                                             
|                                             
|                                             
|Unrecognized net gain                         |                                    |      | (9.5  | )     |   |   | (8.3  | )    
|                                              |                                    |      |       |       |   |   |       |      
|Accrued postretirement health care benefits   |                                    | $    | (35.4 | )     |   | $ | (37.6 | )    
|                                              |                                    |      |       |       |   |   |       |      




The discount rates used in calculating the
accumulated postretirement benefit obligation were 7.75% for 1999
 and

38



---



Notes to Consolidated Financial Statements


6.75% for 1998. For 2000, the assumed rate of
increase in health care costs used to calculate the accumulated
postretirement benefit obligation is 7.7%. This rate is assumed
to decrease to varying degrees annually to 5.0% for years after
2005. Because the dollar amount of the companys
contributions for most employees is frozen, a one percent change
in each year in relation to the above assumptions would not
significantly change the accumulated postretirement benefit
obligation or the total cost of the plan.

Income Taxes

Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The significant components of the
companys deferred tax assets and liabilities as of year-end
 1999 and 1998 are as follows:


|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |      |       |       | 
|------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | ------------------------------ | ----------------------------------------------- | ---- | ----- | ---- | ---- | ---- | ----- | ----- | 
|                                                 
|                                                 
|                                                 
|Components of Deferred Tax Assets and Liabilities
|                                                 
|                                                 
|(In millions)                                     |                                                                                                          | 1999                           |                                                 | 1998
|                                                 
|                                                 
|Deferred tax assets                               |                                                                                                          |                                |                                                 |      |       |      |      |     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Net operating loss and tax credit carryforwards                                                          |                                | $                                               | 52.5 |       |      | $    | 58.9 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued postretirement health care benefits                                                              |                                |                                                 | 12.1 |       |      |      | 12.6 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Inventories, principally due to obsolescence reserves and
	additional costs inventoried for tax purposes |                                |                                                 | 6.2  |       |      |      | 6.4  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued employee benefits other than pensions and retiree health
	care benefits                          |                                |                                                 | 11.4 |       |      |      | 12.3 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued pension cost                                                                                     |                                |                                                 | 10.5 |       |      |      | 9.6  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued warranty cost                                                                                    |                                |                                                 | 1.0  |       |      |      | 1.0  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued taxes                                                                                            |                                |                                                 | 5.0  |       |      |      | 4.3  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accounts receivable, principally due to allowances for doubtful
	accounts                                |                                |                                                 | 2.8  |       |      |      | 3.0  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accrued liabilities and other                                                                            |                                |                                                 | 32.6 |       |      |      | 30.8 |      
|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |     
|                                                  |                                                                                                          | Total deferred tax assets      |                                                 |      | 134.1 |      |      |      | 138.9 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |                                                                                                          | Less valuation allowances      |                                                 |      | (35.3 | )    |      |      | (28.2 | )    
|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |     
|                                                  |                                                                                                          |                                | Deferred tax assets net of valuation allowances |      |       | 98.8 |      |      |       | 110.7 | 
|Deferred tax liabilities                          |                                                                                                          |                                |                                                 |      |       |      |      |     
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Property, plant and equipment, principally due to differences in
	depreciation methods                   |                                |                                                 | 22.9 |       |      |      | 23.0 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Accounts receivable and inventories                                                                      |                                |                                                 | 13.4 |       |      |      | 13.9 |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Goodwill                                                                                                 |                                |                                                 | 10.8 |       |      |      | 6.7  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Prepaid pension costs                                                                                    |                                |                                                 | 5.3  |       |      |      | 3.5  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Undistributed earnings of non-U.S. subsidiaries                                                          |                                |                                                 |     |       |      |      | 1.2  |      
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  | Other                                                                                                    |                                |                                                 | 5.5  |       |      |      | 14.4 |      
|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |     
|                                                  |                                                                                                          | Total deferred tax liabilities |                                                 |      | 57.9  |      |      |      | 62.7  |      
|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |     
|Net deferred tax assets                           |                                                                                                          | $                              | 40.9                                            |      |       | $    | 48.0 |     
|                                                  |                                                                                                          |                                |                                                 |      |       |      |      |     




Valuation allowances related to Widias
preacquisition net operating loss carryforwards were applied to
reduce goodwill arising from the acquisition as the related tax
benefits were realized. During 1998 and 1997, reversals of
valuation allowances applied to reduce goodwill totaled $3.1
million and $5.7 million, respectively.

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

|                                                        |  |      |      |      |  |      |       |  |  |   |      | 
|------------------------------------------------------- |  | ---- | ---- | ---- |  | ---- | ----- |  |  | - | ---- | 
|                                                       
|                                                       
|                                                        |  |     
|Earnings from Continuing Operations Before Income Taxes |  |     
|                                                       
|                                                       
|(In millions)                                           |  | 1999 |      | 1998 |  | 1997
|                                                       
|                                                       
|United States                                           |  | $    | 61.9 |      |  | $    | 65.3  |  |  | $ | 54.1 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Non-U.S                                                 |  |      | 37.0 |      |  |      | 41.9  |  |  |   | 36.3 | 
|                                                        |  |      |      |      |  |      |       |  |  |   |      | 
|                                                        |  | $    | 98.9 |      |  | $    | 107.2 |  |  | $ | 90.4 | 
|                                                        |  |      |      |      |  |      |       |  |  |   |      | 




As presented in the above table, earnings from
U.S. operations in 1999 includes restructuring costs of $5.2
million. Earnings from non-U.S. operations in 1999 includes
restructuring costs of $11.0 million and the gain in the sale of
the Companys European extrusion systems business of $13.1
million.

39



---



Notes to Consolidated Financial Statements


|                           |                 |      |      |      |   |      |      |      |   |   |       |       |  
|-------------------------- | --------------- | ---- | ---- | ---- | - | ---- | ---- | ---- | - | - | ----- | ----- | -
|                          
|                          
|                          
|Provision for Income Taxes
|                          
|                          
|(In millions)              |                 | 1999 |      | 1998 |   | 1997
|                          
|                          
|Current provision          |                 |      |      |      |   |      |      |      |   |   |       |      
|                          
|                          
|                          
|                          
|                           | United States   |      | $    | 2.0  |   |      | $    | 18.2 |   |   | $     | 12.0  |  
|                          
|                          
|                          
|                          
|                           | State and local |      |      | 2.3  |   |      |      | 4.3  |   |   |       | 4.7   |  
|                          
|                          
|                          
|                          
|                           | Non-U.S         |      |      | 12.0 |   |      |      | 11.9 |   |   |       | 14.8  |  
|                           |                 |      |      |      |   |      |      |      |   |   |       |      
|                           |                 |      | 16.3 |      |   |      | 34.4 |      |   |   | 31.5  |      
|                          
|Deferred provision         |                 |      |      |      |   |      |      |      |   |   |       |      
|                          
|                          
|                          
|                          
|                           | United States   |      |      | 10.6 |   |      |      | .8   |   |   |       | (13.7 | )
|                          
|                          
|                          
|                          
|                           | Non-U.S         |      |      | (0.5 | ) |      |      | (7.1 | ) |   |       | (.8   | )
|                           |                 |      |      |      |   |      |      |      |   |   |       |      
|                           |                 |      | 10.1 |      |   |      | (6.3 | )    |   |   | (14.5 | )    
|                           |                 |      |      |      |   |      |      |      |   |   |       |      
|                           |                 | $    | 26.4 |      |   | $    | 28.1 |      |   | $ | 17.0  |      
|                           |                 |      |      |      |   |      |      |      |   |   |       |      




|                                                                 |  |      |      |      |  |      |      |   |  |   |       |  
|---------------------------------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  | - | ----- | -
|                                                                
|                                                                
|                                                                
|Components of the Provision                                     
|for Deferred Income Taxes                                       
|                                                                
|                                                                
|(In millions)                                                    |  | 1999 |      | 1998 |  | 1997
|                                                                
|                                                                
|Change in valuation allowances                                   |  | $    | (1.7 | )    |  | $    | (7.1 | ) |  | $ | (26.7 | )
|                                                                
|                                                                
|                                                                
|                                                                
|Change in deferred taxes related to operating loss carryforwards |  |      | 13.2 |      |  |      | (1.3 | ) |  |   | 10.5  |  
|                                                                
|                                                                
|                                                                
|                                                                
|Depreciation and amortization                                    |  |      | 4.0  |      |  |      | 6.7  |   |  |   | 2.0   |  
|                                                                
|                                                                
|                                                                
|                                                                
|Inventories and accounts receivable                              |  |      | (0.5 | )    |  |      | 3.3  |   |  |   | (1.3  | )
|                                                                
|                                                                
|                                                                
|                                                                
|Accrued pension and other employee costs                         |  |      | 0.5  |      |  |      | (3.6 | ) |  |   | .9    |  
|                                                                
|                                                                
|                                                                
|                                                                
|Other                                                            |  |      | (5.4 | )    |  |      | (4.3 | ) |  |   | .1    |  
|                                                                 |  |      |      |      |  |      |      |   |  |   |       |  
|                                                                 |  | $    | 10.1 |      |  | $    | (6.3 | ) |  | $ | (14.5 | )
|                                                                 |  |      |      |      |  |      |      |   |  |   |       |  




|                                     |                                                        |      |      |      |   |      |      |       |   |  |      |       |  
|------------------------------------ | ------------------------------------------------------ | ---- | ---- | ---- | - | ---- | ---- | ----- | - |  | ---- | ----- | -
|                                    
|                                    
|                                    
|Reconciliation of the U.S. Statutory
|Rate to the Tax Provision Rate      
|                                    
|                                    
|                                     |                                                        | 1999 |      | 1998 |   | 1997
|                                    
|                                    
|U.S. statutory tax rate              |                                                        |      | 35.0 | %    |   |      | 35.0 | %     |   |  | 35.0 | %    
|Increase (decrease) resulting from   |                                                        |      |      |      |   |      |      |       |   |  |      |      
|                                    
|                                    
|                                    
|                                    
|                                     | Tax benefits from net reversal of valuation allowances |      |      | (1.2 | ) |      |      | (10.1 | ) |  |      | (24.1 | )
|                                    
|                                    
|                                    
|                                    
|                                     | Losses without current tax benefits                    |      |      | 1.7  |   |      |      | 2.3   |   |  |      | 9.9   |  
|                                    
|                                    
|                                    
|                                    
|                                     | Adjustment of tax reserves                             |      |      | (7.1 | ) |      |      |      |   |  |      |      |  
|                                    
|                                    
|                                    
|                                    
|                                     | Statutory tax rate changes                             |      |      | 5.3  |   |      |      |      |   |  |      |      |  
|                                    
|                                    
|                                    
|                                    
|                                     | U.S. federal income tax credits                        |      |      | (3.0 | ) |      |      | (2.6  | ) |  |      | (3.2  | )
|                                    
|                                    
|                                    
|                                    
|                                     | Effect of operations outside the U.S                   |      |      | (4.2 | ) |      |      | (1.3  | ) |  |      | (4.0  | )
|                                    
|                                    
|                                    
|                                    
|                                     | State and local income taxes, net of federal benefit   |      |      | 1.5  |   |      |      | 2.6   |   |  |      | 3.2   |  
|                                    
|                                    
|                                    
|                                    
|                                     | Other                                                  |      |      | (1.3 | ) |      |      | .3    |   |  |      | 2.0   |  
|                                     |                                                        |      |      |      |   |      |      |       |   |  |      |      
|                                     |                                                        |      | 26.7 | %    |   |      | 26.2 | %     |   |  | 18.8 | %    
|                                     |                                                        |      |      |      |   |      |      |       |   |  |      |      




At year-end 1999, certain of the companys
non-U.S. subsidiaries had net operating loss carryforwards
aggregating approximately $146 million, substantially all of
which have no expiration dates.

Undistributed earnings of foreign subsidiaries
which are intended to be indefinitely reinvested aggregated $106
million at the end of 1999.

Income taxes of $3.0 million, $32.2 million and
$25.2 million were paid in 1999, 1998 and 1997, respectively.

Earnings Per Common Share

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


|                                              |  |      |      |      |  |      |      |   |  |   |      |  
|--------------------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  | - | ---- | -
|                                             
|                                             
|                                             
|Earnings Available to Common Shareholders    
|                                             
|                                             
|(In millions)                                 |  | 1999 |      | 1998 |  | 1997
|                                             
|                                             
|Net earnings                                  |  | $    | 70.1 |      |  | $    | 41.5 |   |  | $ | 80.6 |  
|                                             
|                                             
|                                             
|                                             
|Less dividends on Preferred shares            |  |      | (.2  | )    |  |      | (.2  | ) |  |   | (.2  | )
|                                              |  |      |      |      |  |      |      |   |  |   |      |  
|Net earnings available to common shareholders |  | $    | 69.9 |      |  | $    | 41.3 |   |  | $ | 80.4 |  
|                                              |  |      |      |      |  |      |      |   |  |   |      |  




40



---



Notes to Consolidated Financial Statements


|                                                       |  |      |        |      |  |      |        |  |  |  |        | 
|------------------------------------------------------ |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                      
|                                                      
|                                                      
|Reconciliation of Shares                              
|                                                      
|                                                      
|(In thousands)                                         |  | 1999 |        | 1998 |  | 1997
|                                                      
|                                                      
|Weighted-average common shares outstanding             |  |      | 36,847 |      |  |      | 38,875 |  |  |  | 39,583 | 
|                                                      
|                                                      
|                                                      
|                                                      
|Effect of dilutive stock options and restricted shares |  |      | 202    |      |  |      | 366    |  |  |  | 373    | 
|                                                       |  |      |        |      |  |      |        |  |  |  |        | 
|Weighted-average common shares assuming dilution       |  |      | 37,049 |      |  |      | 39,241 |  |  |  | 39,956 | 
|                                                       |  |      |        |      |  |      |        |  |  |  |        | 




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

Receivables

Under the terms of the companys receivables
purchase agreement, the company sells on an ongoing basis and
without recourse an undivided percentage ownership interest in
designated pools of accounts receivable. To maintain the balance
in the designated pools of accounts receivable sold, the company
is obligated to sell undivided percentage interests in new
receivables as existing receivables are collected. The agreement
permits the sale of up to $75.0 million of undivided interests in
 accounts receivable through August, 2001.


At December 31, 1999, December 31, 1998
and December 27, 1997, the undivided interest in the
companys gross accounts receivable that had been sold to
the purchasers aggregated $75.0 million, $63.1 million and $75.0
million, respectively. Increases and decreases in the amount sold
 are reported as operating cash flows in the Consolidated
Statements of Cash Flows. Costs related to the sales are included
 in other costs and expenses-net in the Consolidated Statements
of Earnings.

Inventories

Inventories amounting to $99.5 million in 1999 and
 $89.6 million in 1998 are stated at LIFO cost. If stated at FIFO
 cost, such inventories would be greater by approximately $17.4
million in 1999 and $17.0 million in 1998.


As presented in the Consolidated Balance Sheets,
inventories are net of reserves for obsolescence of $37.6 million
 and $37.3 million in 1999 and 1998, respectively.

Property, Plant and Equipment

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




---

Property, Plant and Equipment  Net





|                              |  |      |        |      |  |   |        |  
|----------------------------- |  | ---- | ------ | ---- |  | - | ------ | -
|(In millions)                 |  | 1999 |        | 1998
|                             
|                             
|Land                          |  | $    | 14.8   |      |  | $ | 16.3   |  
|                             
|                             
|                             
|                             
|Buildings                     |  |      | 144.6  |      |  |   | 153.9  |  
|                             
|                             
|                             
|                             
|Machinery and equipment       |  |      | 430.1  |      |  |   | 435.0  |  
|                              |  |      |        |      |  |   |        |  
|                              |  |      | 589.5  |      |  |   | 605.2  |  
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |      | (266.3 | )    |  |   | (254.3 | )
|                              |  |      |        |      |  |   |        |  
|                              |  | $    | 323.2  |      |  | $ | 350.9  |  
|                              |  |      |        |      |  |   |        |  
|                             

Liabilities

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




---

Accrued and Other Current Liabilities





|                                               |  |      |       |      |  |   |       |  
|---------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | -
|(In millions)                                  |  | 1999 |       | 1998
|                                              
|                                              
|Accrued salaries, wages and other compensation |  | $    | 53.6  |      |  | $ | 49.1  |  
|                                              
|                                              
|                                              
|                                              
|Accrued and deferred income taxes              |  |      | 16.1  |      |  |   | (.5   | )
|                                              
|                                              
|                                              
|                                              
|Other accrued expenses                         |  |      | 103.0 |      |  |   | 130.2 |  
|                                               |  |      |       |      |  |   |       |  
|                                               |  | $    | 172.7 |      |  | $ | 178.8 |  
|                                               |  |      |       |      |  |   |       |  
|                                              



---

Long-Term Accrued Liabilities





|                                            |  |      |       |      |  |   |       | 
|------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|(In millions)                               |  | 1999 |       | 1998
|                                           
|                                           
|Accrued pensions and other compensation     |  | $    | 69.1  |      |  | $ | 74.9  | 
|                                           
|                                           
|                                           
|                                           
|Accrued postretirement health care benefits |  |      | 38.9  |      |  |   | 40.6  | 
|                                           
|                                           
|                                           
|                                           
|Accrued and deferred income taxes           |  |      | 27.5  |      |  |   | 26.6  | 
|                                           
|                                           
|                                           
|                                           
|Minority shareholders interests            |  |      | 22.2  |      |  |   | 19.9  | 
|                                           
|                                           
|                                           
|                                           
|Other                                       |  |      | 33.1  |      |  |   | 31.9  | 
|                                            |  |      |       |      |  |   |       | 
|                                            |  | $    | 190.8 |      |  | $ | 193.9 | 
|                                            |  |      |       |      |  |   |       | 
|                                           

41



---



Notes to Consolidated Financial Statements


Long-Term Debt

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




---

Long-Term Debt





|                          |  |      |        |      |  |   |       |  
|------------------------- |  | ---- | ------ | ---- |  | - | ----- | -
|(In millions)             |  | 1999 |        | 1998
|                         
|                         
|7 7/8% Notes due 2000     |  | $    | 100.0  |      |  | $ | 100.0 |  
|                         
|                         
|                         
|                         
|8 3/8% Notes due 2004     |  |      | 115.0  |      |  |   | 115.0 |  
|                         
|                         
|                         
|                         
|Revolving credit facility |  |      | 156.9  |      |  |   | 84.8  |  
|                         
|                         
|                         
|                         
|Other                     |  |      | 33.2   |      |  |   | 43.7  |  
|                          |  |      |        |      |  |   |       |  
|                          |  |      | 405.1  |      |  |   | 343.5 |  
|                         
|                         
|                         
|                         
|Less current maturities   |  |      | (107.0 | )    |  |   | (7.8  | )
|                          |  |      |        |      |  |   |       |  
|                          |  | $    | 298.1  |      |  | $ | 335.7 |  
|                          |  |      |        |      |  |   |       |  
|                         

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

Except for the 8 3/8% Notes due 2004, the
carrying amount of the companys long-term debt approximates
 fair value, which is determined using discounted cash flow
analysis based on the companys incremental borrowing rates
for similar types of financing arrangements. At year-end 1999,
the fair value of the 8 3/8% Notes due 2004 was $112.7
million. This amount is based on recent trade prices through
registered securities brokers.

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

Outstanding borrowings under the companys
revolving credit facility of $100.0 million and DM 110
million ($56.9 million) at December 31, 1999 and $10.0
million and DM 125 million ($74.8 million) at
December 31, 1998 are included in long-term debt based on
the expectation that these borrowings will remain outstanding for
 more than one year. These borrowings are at variable interest
rates which had a weighted average of 6.7% at year-end 1999.

Interest paid was $38.1 million in 1999, $31.9
million in 1998 and $29.1 million in 1997.

Maturities of long-term debt for the five years
after 1999 are:



---

Maturities of Long-Term Debt





|              |  |   |       | 
|------------- |  | - | ----- | 
|(In millions) |  |  
|             
|             
|2000          |  | $ | 107.0 | 
|             
|             
|             
|             
|2001          |  |   | 9.8   | 
|             
|             
|             
|             
|2002          |  |   | 161.9 | 
|             
|             
|             
|             
|2003          |  |   | 1.1   | 
|             
|             
|             
|             
|2004          |  |   | 116.2 | 
|             

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



---

Rental Payments





|              |  |   |      | 
|------------- |  | - | ---- | 
|(In millions) |  |  
|             
|             
|2000          |  | $ | 20.6 | 
|             
|             
|             
|             
|2001          |  |   | 15.3 | 
|             
|             
|             
|             
|2002          |  |   | 11.4 | 
|             
|             
|             
|             
|2003          |  |   | 9.3  | 
|             
|             
|             
|             
|2004          |  |   | 8.0  | 
|             
|             
|             
|             
|After 2004    |  |   | 41.0 | 
|             

Rent expense for continuing operations was $22.3
million, $17.8 million and $19.6 million in 1999, 1998 and 1997,
respectively.

Lines of Credit

At year-end 1999, the company had lines of credit
with various U.S. and non-U.S. banks of approximately $563
million, including a $375 million committed revolving credit
facility. These credit facilities support letters of credit and
leases in addition to providing borrowings under varying terms.
Under the provisions of the revolving credit facility, the
companys additional borrowing capacity totaled
approximately $284 million at December 31, 1999.


The weighted-average interest rate on borrowings
under lines of credit outstanding as of year-end was 6.6% and
6.4% for 1999 and 1998, respectively.

42



---



Notes to Consolidated Financial Statements


Shareholders Equity

In October, 1998, the company announced its
intention to repurchase up to two million of its common shares on
 the open market, of which 1,239,700 were repurchased through
December 31, 1998. The remaining 760,300 shares were
repurchased in the first quarter of 1999. For all of 1999, the
company repurchased a total of 960,300 treasury shares at a cost
of $16.3 million. During 1999, 948 treasury shares were reissued.
 The company repurchased a total of 2,079,600 treasury shares at
a cost of $43.1 million in 1998. Additional shares totaling
103,960 in 1999 and 50,330 in 1998 were purchased with respect to
 current exercises of stock options and restricted stock grants
in lieu of the issuance of authorized but unissued shares or
treasury shares.


In February, 2000, the company announced its
intention to repurchase up to four million additional common
shares (see Subsequent Event).



---

Shareholders Equity  Preferred
 and Common Shares





|                                                                                                                                     |  |      |      |      |  |  |      | 
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---- | ---- |  |  | ---- | 
|(In millions, except share                                                                                                           |  |      |      |     
|and per-share amounts)                                                                                                               |  | 1999 |      | 1998
|                                                                                                                                    
|                                                                                                                                    
|4% Cumulative Preferred shares authorized, issued and
	outstanding, 60,000 shares at $100 par value, redeemable at $105
	a share     |  |      | $6.0 |      |  |  | $6.0 | 
|                                                                                                                                    
|                                                                                                                                    
|                                                                                                                                    
|                                                                                                                                    
|Common shares, $1 par value, authorized 50,000,000 shares, issued
	 and outstanding, 1999: 36,807,968 shares,1998: 37,806,374 shares |  |      | 36.8 |      |  |  | 37.8 | 
|                                                                                                                                    

As presented in the previous table, common shares
outstanding are net of treasury shares of 3,035,187 in 1999 and
2,075,835 in 1998.

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

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

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

Comprehensive Income

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


Changes in cumulative foreign currency translation
 adjustments are as follows:



---

Cumulative Foreign Currency Translation
Adjustments


________________________________________________________________________________


|                                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|-------------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | -
|(In millions)                                                        |  | 1999 |       | 1998 |  | 1997
|                                                                    
|                                                                    
|Balance at beginning of year                                         |  | $    | (14.4 | )    |  | $    | (35.0 | ) |  | $ | (9.6  | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Effect of exchange rate fluctuations                                 |  |      | (21.5 | )    |  |      | 3.5   |   |  |   | (25.4 | )
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Reclassification adjustments for items included in net
	earnings (a) |  |      | .5    |      |  |      | 17.1  |   |  |   |      |  
|                                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|                                                                     |  | $    | (35.4 | )    |  | $    | (14.4 | ) |  | $ | (35.0 | )
|                                                                     |  |      |       |      |  |      |       |   |  |   |       |  
|                                                                    



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

Contingencies

The company is involved in remedial investigations
 and actions at various locations, including former plant
facilities, and EPA Superfund sites where the company and other


43



---



Notes to Consolidated Financial Statements


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

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

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

Foreign Exchange Contracts

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


At December 31, 1999, the company had
outstanding forward contracts totaling $18.7 million, which
generally mature in periods of six months or less. These
contracts require the company and its subsidiaries to exchange
currencies at the maturity dates at exchange rates agreed upon at
 inception. Due to the short-term nature of these contracts,
their fair values approximate their contract values as of
December 31, 1999.

Stock-Based Compensation

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


As originally adopted, the 1997 Plan provided for
grants of up to 2,000,000 common shares. However, in February,
2000, the companys Board of Directors approved an amendment
 to the plan which, subject to shareholder approval, would
provide for 2,400,000 additional grants.

Non-qualified and incentive stock options
outstanding under the 1997 Plan are granted at market value, vest
 in increments over a five year period, and expire ten years
subsequent to the award. Of the 3,750,279 stock options
outstanding at year-end 1999, 279,000 are incentive stock
options.

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



---

Stock Option Activity





|                             |           |        |           |          |   |        |      
|---------------------------- | --------- | ------ | --------- | -------- | - | ------ | -----
|                             |           |        |           | Weighted
|                             |           |        |           | Average 
|                             |           |        |           | Exercise
|                             |           | Shares |           | Price   
|                            
|                            
|Outstanding at year-end 1996 |           |        | 2,706,569 |          |   | $20.70
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 568,600  |   |        | 23.25
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (94,485  | ) |        | 17.64
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (117,072 | ) |        | 24.28
|                             |           |        |           |          |   |       
|Outstanding at year-end 1997 |           |        | 3,063,612 |          |   | 21.13 
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 633,700  |   |        | 27.35
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (259,303 | ) |        | 20.13
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (28,606  | ) |        | 23.82
|                             |           |        |           |          |   |       
|Outstanding at year-end 1998 |           |        | 3,409,403 |          |   | 22.34 
|                            
|                            
|                            
|                            
|                             | Granted   |        |           | 455,500  |   |        | 19.67
|                            
|                            
|                            
|                            
|                             | Exercised |        |           | (8,440   | ) |        | 15.21
|                            
|                            
|                            
|                            
|                             | Cancelled |        |           | (106,184 | ) |        | 22.78
|                             |           |        |           |          |   |       
|Outstanding at year-end 1999 |           |        | 3,750,279 |          |   | 22.02 
|                             |           |        |           |          |   |       
|                            



---

Exercisable Stock Options at Year-End





|     |  |         |           | 
|---- |  | ------- | --------- | 
|     |  | Stock  
|     |  | Options
|    
|    
|1997 |  |         | 1,245,931 | 
|    
|    
|    
|    
|1998 |  |         | 1,433,759 | 
|    
|    
|    
|    
|1999 |  |         | 1,871,467 | 






---

Shares Available for Future Grant at Year-end





|     |  |        |           | 
|---- |  | ------ | --------- | 
|     |  | Shares
|    
|    
|1997 |  |        | 1,306,959 | 
|    
|    
|    
|    
|1998 |  |        | 599,057   | 
|    
|    
|    
|    
|1999 |  |        | 141,552   | 




44



---



Notes to Consolidated Financial Statements


The following tables summarize information about
stock options outstanding at December 31, 1999.



---

Components of Outstanding Stock Options





|            |  |             |           |           |  |          |     |  |  |  |        | 
|----------- |  | ----------- | --------- | --------- |  | -------- | --- |  |  |  | ------ | 
|            |  |             |           | Average   |  | Weighted
|Range of    |  |             |           | Remaining |  | Average 
|Exercise    |  | Number      |           | Contract  |  | Exercise
|Prices      |  | Outstanding |           | Life      |  | Price   
|           
|           
|$8.50-19.66 |  |             | 716,354   |           |  |          | 2.2 |  |  |  | $14.56 | 
|20.00-27.91 |  |             | 3,033,925 |           |  |          | 6.6 |  |  |  | 23.78  | 
|            |  |             |           |           |  |          |     |  |  |  |        | 
|8.50-27.91  |  |             | 3,750,279 |           |  |          | 5.8 |  |  |  | 22.02  | 
|            |  |             |           |           |  |          |     |  |  |  |        | 
|            |  |             |           |           |  |          |     |  |  |  |        | 
|           



---

Components of Exercisable Stock Options





|            |  |             |           |          |  |   |       | 
|----------- |  | ----------- | --------- | -------- |  | - | ----- | 
|            |  |             |           | Weighted
|Range of    |  |             |           | Average 
|Exercise    |  | Number      |           | Exercise
|Prices      |  | Exercisable |           | Price   
|           
|           
|$8.50-17.75 |  |             | 629,354   |          |  | $ | 14.13 | 
|20.00-25.75 |  |             | 1,242,113 |          |  |   | 23.09 | 
|            |  |             |           |          |  |   |       | 
|8.50-25.75  |  |             | 1,871,467 |          |  |   | 20.07 | 
|            |  |             |           |          |  |   |       | 
|            |  |             |           |          |  |   |       | 
|           

Because the company accounts for stock-based
compensation in accordance with Accounting Principles Board
Opinion No. 25 and because stock options outstanding under
the 1997 Plan and prior plans have exercise prices equal to the
market price of the companys common shares at the grant
dates, no compensation expense is recognized. Pro forma earnings
amounts prepared under the assumption that the stock options
granted in years 1995 through 1999 had been accounted for based
on their fair value as determined under Statement of Financial
Accounting Standards No. 123, Accounting for
Stock-Based Compensation, are presented in the following
table.



---

Pro Forma Earnings





|                                        |         |      |      |      |  |      |      |     |  |   |      |      | 
|--------------------------------------- | ------- | ---- | ---- | ---- |  | ---- | ---- | --- |  | - | ---- | ---- | 
|(In millions, except per-share amounts) |         | 1999 |      | 1998 |  | 1997
|                                       
|                                       
|Net earnings                            |         | $    | 67.1 |      |  | $    | 38.1 |     |  | $ | 77.5 |     
|                                        |         |      |      |      |  |      |      |     |  |   |      |     
|Net earnings per common share           |         |      |      |      |  |      |      |     |  |   |      |     
|                                       
|                                       
|                                       
|                                       
|                                        | Basic   |      | $    | 1.81 |  |      | $    | .97 |  |   | $    | 1.95 | 
|                                        |         |      |      |      |  |      |      |     |  |   |      |     
|                                        | Diluted |      | $    | 1.81 |  |      | $    | .96 |  |   | $    | 1.93 | 
|                                        |         |      |      |      |  |      |      |     |  |   |      |     
|                                       

The weighted-average fair value of stock options
granted during 1999, 1998 and 1997 was $6.02, $8.38 and $7.51,
respectively. The fair values of the options were calculated as
of the grant dates using the Black-Scholes option pricing model
and the following assumptions:



---

Fair Value Assumptions





|                                      |  |      |          |      |  |      |          |   |  |  |          |  
|------------------------------------- |  | ---- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|                                      |  | 1999 |          | 1998 |  | 1997
|                                     
|                                     
|Dividend yield                        |  |      | 2.40     | %    |  |      | 1.76     | % |  |  | 2.06     | %
|                                     
|                                     
|                                     
|                                     
|Expected volatility                   |  |      | 35-41    | %    |  |      | 32- 39   | % |  |  | 31- 41   | %
|                                     
|                                     
|                                     
|                                     
|Risk free interest rate at grant date |  |      | 4.9- 5.6 | %    |  |      | 5.4- 5.6 | % |  |  | 5.9- 6.3 | %
|                                     
|                                     
|                                     
|                                     
|Expected life in years                |  |      | 2-7      |      |  |      | 2-7      |   |  |  | 2-7      |  
|                                     

Under the 1997 Plan, performance awards are
granted in the form of restricted stock awards which vest based
on the achievement of specified earnings objectives over a three
year period. The 1997 Plan also permits the granting of other
restricted stock awards, which also vest three years from the
date of grant. During the restriction period, restricted stock
awards entitle the holder to all the rights of a holder of common
 shares, including dividend and voting rights. Unvested shares
are restricted as to disposition and subject to forfeiture under
certain circumstances. The amount of compensation expense
recognized for restricted stock, including performance awards,
was $4.6 million and $5.0 million in 1998 and 1997, respectively.
 In 1999, reversals of prior years accruals for performance
 awards resulted in a net benefit from restricted stock of $5.8
million. Restricted stock award activity is as follows:



---

Restricted Stock Activity





|                                               |  |      |        |      |  |      |        |  |  |   |         | 
|---------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------- | 
|                                               |  | 1999 |        | 1998 |  | 1997
|                                              
|                                              
|Restricted stock awarded                       |  |      | 81,974 |      |  |      | 92,194 |  |  |   | 281,190 | 
|                                               |  |      |        |      |  |      |        |  |  |   |         | 
|Weighted-average market value on date of grant |  | $    | 20.09  |      |  | $    | 27.02  |  |  | $ | 22.99   | 
|                                               |  |      |        |      |  |      |        |  |  |   |         | 
|                                              

Restricted shares granted as performance awards
subject to contingent vesting totaled 68,174 in 1999, 52,694 in
1998 and 205,705 in 1997. Outstanding restricted shares subject
to contingent vesting totaled 267,808, 216,840 and 205,075 at
year-end 1999, 1998 and 1997, respectively. The amount
outstanding at year-end 1999 includes 153,488 shares that were
cancelled in February, 2000, because the basic earnings per
common share objective for 1999 was not attained.

45



---



Notes to Consolidated Financial Statements


Cancellations of restricted stock, including
shares cancelled to pay employee withholding taxes at maturity,
totaled 38,262 in 1999, 50,595 in 1998 and 6,758 in 1997.

Issuances of shares related to performance awards
earned under a prior plan and to deferred directors fees
totaled 12,754 in 1999, 10,819 in 1998 and 10,210 in 1997.

Organization

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


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

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

|                          |  |      |         |      |  |      |         |  |  |   |         | 
|------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                         
|                         
|                         
|Sales by Segment         
|                         
|                         
|(In millions)             |  | 1999 |         | 1998 |  | 1997
|                         
|                         
|Plastics technologies     |  | $    | 904.2   |      |  | $    | 796.4   |  |  | $ | 735.7   | 
|                         
|                         
|                         
|                         
|Metalworking technologies |  |      | 720.5   |      |  |      | 718.3   |  |  |   | 703.0   | 
|                          |  |      |         |      |  |      |         |  |  |   |         | 
|Total sales               |  | $    | 1,624.7 |      |  | $    | 1,514.7 |  |  | $ | 1,438.7 | 
|                          |  |      |         |      |  |      |         |  |  |   |         | 
|                         

|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |       |  
|--------------------------------------------------------------------------------------------- | ----------------------------------- | ---- | ------- | ----- | - | ---- | ------- | ----- | - | - | ------- | ----- | -
|                                                                                             
|                                                                                             
|                                                                                             
|Operating Information by Segment                                                             
|                                                                                             
|                                                                                             
|(In millions)                                                                                 |                                     | 1999 |         | 1998  |   | 1997
|                                                                                             
|                                                                                             
|Operating earnings                                                                            |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Plastics technologies               |      | $       | 89.3  |   |      | $       | 80.3  |   |   | $       | 59.7  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Metalworking technologies           |      |         | 72.8  |   |      |         | 82.2  |   |   |         | 81.2  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Restructuring costs (a)             |      |         | (16.2 | ) |      |         |      |   |   |         |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Gain on divestiture of business (b) |      |         | 13.1  |   |      |         |      |   |   |         |      |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Corporate expenses                  |      |         | (16.5 | ) |      |         | (18.9 | ) |   |         | (17.2 | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Other unallocated expenses (c)      |      |         | (5.4  | ) |      |         | (5.7  | ) |   |         | (5.8  | )
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|Operating earnings                                                                            |                                     |      | 137.1   |       |   |      | 137.9   |       |   |   | 117.9   |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Interest expense-net                                                                          |                                     |      | (38.2   | )     |   |      | (30.7   | )     |   |   | (27.5   | )    
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|Earnings from continuing operations before income taxes and
	minority shareholders interests |                                     | $    | 98.9    |       |   | $    | 107.2   |       |   | $ | 90.4    |      
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|Segment assets (d)                                                                            |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Plastics technologies               |      | $       | 850.8 |   |      | $       | 882.8 |   |   | $       | 587.2 |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Metalworking technologies           |      |         | 552.8 |   |      |         | 547.2 |   |   |         | 476.8 |  
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                              |                                     |      | 1,403.6 |       |   |      | 1,430.0 |       |   |   | 1,064.0 |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued machine tools segment  |      |         |      |   |      |         |      |   |   |         | 246.6 |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Cash and cash equivalents           |      |         | 81.3  |   |      |         | 48.9  |   |   |         | 25.7  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Receivables sold                    |      |         | (75.0 | ) |      |         | (63.1 | ) |   |         | (75.0 | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Deferred income taxes               |      |         | 52.4  |   |      |         | 55.0  |   |   |         | 54.4  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Unallocated corporate and other (e) |      |         | 74.4  |   |      |         | 86.3  |   |   |         | 76.8  |  
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|Total assets                                                                                  |                                     | $    | 1,536.7 |       |   | $    | 1,557.1 |       |   | $ | 1,392.5 |      
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|Capital expenditures                                                                          |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Plastics technologies               |      | $       | 18.9  |   |      | $       | 29.6  |   |   | $       | 26.0  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Metalworking technologies           |      |         | 26.7  |   |      |         | 38.8  |   |   |         | 33.9  |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Unallocated corporate               |      |         | 1.7   |   |      |         | 2.4   |   |   |         | 2.0   |  
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                              |                                     |      | 47.3    |       |   |      | 70.8    |       |   |   | 61.9    |      
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Discontinued machine tools segment  |      |         |      |   |      |         | 10.6  |   |   |         | 17.6  |  
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|Total capital expenditures                                                                    |                                     | $    | 47.3    |       |   | $    | 81.4    |       |   | $ | 79.5    |      
|                                                                                              |                                     |      |         |       |   |      |         |       |   |   |         |      
|                                                                                             
|See notes (a)-(e) on page 47.                                                                

46



---



Notes to Consolidated Financial Statements


|                                    |                                    |      |      |      |  |      |      |      |  |   |      |      | 
|----------------------------------- | ---------------------------------- | ---- | ---- | ---- |  | ---- | ---- | ---- |  | - | ---- | ---- | 
|                                   
|                                   
|                                   
|Operating Information by Segment   
|                                   
|                                   
|(In millions)                       |                                    | 1999 |      | 1998 |  | 1997
|                                   
|                                   
|Depreciation and amortization       |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                   
|                                   
|                                   
|                                   
|                                    | Plastics technologies              |      | $    | 32.8 |  |      | $    | 26.6 |  |   | $    | 21.9 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Metalworking technologies          |      |      | 24.9 |  |      |      | 23.3 |  |   |      | 23.0 | 
|                                   
|                                   
|                                   
|                                   
|                                    | Unallocated corporate              |      |      | .6   |  |      |      | 1.5  |  |   |      | 2.9  | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                    |                                    |      | 58.3 |      |  |      | 51.4 |      |  |   | 47.8 |     
|                                   
|                                   
|                                   
|                                   
|                                    | Discontinued machine tools segment |      |      |     |  |      |      | 6.0  |  |   |      | 5.9  | 
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|Total depreciation and amortization |                                    | $    | 58.3 |      |  | $    | 57.4 |      |  | $ | 53.7 |     
|                                    |                                    |      |      |      |  |      |      |      |  |   |      |     
|                                   



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

|                        |                         |                      |         |         |       |      |         |       |       |   |         |       |       | 
|----------------------- | ----------------------- | -------------------- | ------- | ------- | ----- | ---- | ------- | ----- | ----- | - | ------- | ----- | ----- | 
|                       
|                       
|                       
|Geographic Information 
|                       
|                       
|(In millions)           |                         | 1999                 |         | 1998    |       | 1997
|                       
|                       
|Sales (a)               |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States           |                      | $       | 1,002.9 |       |      | $       | 912.7 |       |   | $       | 845.3 |      
|                        | Non-U.S. operations     |                      |         |         |       |      |         |       |       |   |         |       |      
|                       
|                       
|                       
|                       
|                        |                         | Germany              |         |         | 234.5 |      |         |       | 235.6 |   |         |       | 219.5 | 
|                       
|                       
|                       
|                       
|                        |                         | Other western Europe |         |         | 252.2 |      |         |       | 252.2 |   |         |       | 248.2 | 
|                       
|                       
|                       
|                       
|                        |                         | Asia                 |         |         | 83.3  |      |         |       | 74.5  |   |         |       | 87.1  | 
|                       
|                       
|                       
|                       
|                        |                         | Other                |         |         | 51.8  |      |         |       | 39.7  |   |         |       | 38.6  | 
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|Total sales             |                         | $                    | 1,624.7 |         |       | $    | 1,514.7 |       |       | $ | 1,438.7 |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       
|Noncurrent assets       |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       
|                       
|                       
|                       
|                        | United States           |                      | $       | 579.3   |       |      | $       | 542.3 |       |   | $       | 377.7 |      
|                        | Non-U.S. operations     |                      |         |         |       |      |         |       |       |   |         |       |      
|                       
|                       
|                       
|                       
|                        |                         | Germany              |         |         | 87.2  |      |         |       | 108.6 |   |         |       | 80.7  | 
|                       
|                       
|                       
|                       
|                        |                         | Other western Europe |         |         | 101.1 |      |         |       | 117.9 |   |         |       | 78.9  | 
|                       
|                       
|                       
|                       
|                        |                         | Asia                 |         |         | 20.3  |      |         |       | 18.4  |   |         |       | 17.8  | 
|                       
|                       
|                       
|                       
|                        |                         | Other                |         |         | 6.2   |      |         |       | 7.5   |   |         |       | 6.1   | 
|                       
|                       
|                       
|                       
|                        | Discontinued operations |                      |         |        |       |      |         |      |       |   |         | 64.4  |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|Total noncurrent assets |                         | $                    | 794.1   |         |       | $    | 794.7   |       |       | $ | 625.6   |      
|                        |                         |                      |         |         |       |      |         |       |       |   |         |      
|                       



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

Sales of U.S. operations include export sales of
$153.8 million in 1999, $136.3 million in 1998 and $113.1 million
 in 1997.

Total sales of the companys U.S. and
non-U.S. operations to unaffiliated customers outside the U.S.
were $720.1 million, $679.6 million and $684.2 million in 1999,
1998 and 1997, respectively.

Subsequent Event

On February 4, 2000, the companys Board
 of Directors approved a share repurchase program authorizing the
 repurchase of up to four million shares, or approximately 11% of
 the companys outstanding common shares. The company plans
to repurchase these shares from time to time on the open market
beginning in the first quarter of 2000.


47



---



Notes to Consolidated Financial Statements


Report of Independent Auditors

Board of Directors



We have audited the accompanying Consolidated
Balance Sheets of Milacron Inc. and subsidiaries as of
December 31, 1999 and 1998, and the related Consolidated
Statements of Earnings, Comprehensive Income and
Shareholders Equity, and Cash Flows for each of the three
years in the period ended December 31, 1999. These financial
 statements are the responsibility of the companys
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Milacron Inc. and subsidiaries
 at December 31, 1999 and 1998, and the consolidated results
 of their operations and their cash flows for each of the three
years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material
respects the information set forth therein.

Supplementary Financial Information

|                                             |                  |         |       |       |     |       |       |       |     |   |       |      |       |   |       |      |     | 
|-------------------------------------------- | ---------------- | ------- | ----- | ----- | --- | ----- | ----- | ----- | --- | - | ----- | ---- | ----- | - | ----- | ---- | --- | 
|                                            
|                                            
|                                            
|Operating Results by Quarter (Unaudited)    
|                                            
|                                            
|                                            
|(In millions, except per-share amounts) 1999
|                                            
|                                            
|                                             |                  | Qtr 1   |       | Qtr 2 |     | Qtr 3 |       | Qtr 4
|                                            
|                                            
|Sales                                        |                  | $       | 392.0 |       |     | $     | 401.0 |       |     | $ | 393.0 |      |       | $ | 438.7 |     
|                                            
|                                            
|                                            
|                                            
|Manufacturing margins                        |                  |         | 103.6 |       |     |       | 102.3 |       |     |   | 102.5 |      |       |   | 114.7 |     
|                                            
|                                            
|                                            
|                                            
|                                             | Percent of sales |         |       | 26.4  | %   |       |       | 25.5  | %   |   |       | 26.1 | %     |   |       | 26.1 | %  
|                                            
|                                            
|                                            
|                                            
|Net earnings                                 |                  |         | 15.1  |       |     |       | 15.3  |       |     |   | 17.4  |      |       |   | 22.3  | (a) 
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |       |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .40 |       |       |       | .42 |   |       |      | .47   |   |       |      | .61 | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .40 |       |       |       | .41 |   |       |      | .47   |   |       |      | .61 | 
|                                            
|                                            
|                                            
|                                            
|                                            
|1998                                        
|                                            
|Sales                                        |                  | $       | 356.5 |       |     | $     | 370.5 |       |     | $ | 352.1 |      |       | $ | 435.6 |     
|                                            
|                                            
|                                            
|                                            
|Manufacturing margins                        |                  |         | 96.6  |       |     |       | 103.7 |       |     |   | 99.9  |      |       |   | 122.2 |     
|                                            
|                                            
|                                            
|                                            
|                                             | Percent of sales |         |       | 27.1  | %   |       |       | 28.0  | %   |   |       | 28.4 | %     |   |       | 28.1 | %  
|                                            
|                                            
|                                            
|                                            
|Earnings from continuing operations          |                  |         | 15.0  |       |     |       | 18.3  |       |     |   | 18.5  |      |       |   | 23.6  |     
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |       |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .38 |       |       |       | .47 |   |       |      | .47   |   |       |      | .62 | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .37 |       |       |       | .45 |   |       |      | .47   |   |       |      | .62 | 
|                                            
|                                            
|                                            
|                                            
|Discontinued operations                      |                  |         | 2.6   |       |     |       | 2.6   |       |     |   | (39.1 | )(b) |       |   |      |     
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |       |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .07 |       |       |       | .06 |   |       |      | (1.00 | ) |       |      |    | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .07 |       |       |       | .07 |   |       |      | (1.00 | ) |       |      |    | 
|                                            
|                                            
|                                            
|                                            
|Net earnings                                 |                  |         | 17.6  |       |     |       | 20.9  |       |     |   | (20.6 | )    |       |   | 23.6  |     
|                                             | Per common share |         |       |       |     |       |       |       |     |   |       |      |       |   |       |      |    
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Basic   |       |       | .45 |       |       |       | .53 |   |       |      | (.53  | ) |       |      | .62 | 
|                                            
|                                            
|                                            
|                                            
|                                             |                  | Diluted |       |       | .44 |       |       |       | .52 |   |       |      | (.53  | ) |       |      | .62 | 
|                                            



|    |                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Includes a gain of $13.1 million ($10.1 million
	after tax) on the sale of the companys European extrusion
	systems business and restructuring costs of $16.2 million ($10.9
	million after tax).
|(b) | Includes a loss of $45.9 million ($35.2 million
	after tax) on the sale of the discontinued machine tools segment.                                                                                



| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP

Cincinnati, Ohio

February 4, 2000


48



---





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

Not applicable.



PART III




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

The information required by Item 10 is
(i) incorporated herein by reference to the Election
of Directors section of the companys proxy statement
dated March 24, 2000 and (ii) included in Part I
on page 16 of this Form 10-K.



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

The Components of Compensation section
 of the companys proxy statement dated March 24, 2000
is incorporated herein by reference.



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

The Principal Holders of Voting
Securities section of the companys proxy statement
dated March 24, 2000 is incorporated herein by reference.



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

The paragraph captioned Stock Loan
Programs of the companys proxy statement dated
March 24, 2000 is incorporated herein by reference.



PART IV




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

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

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

|                                                                                                |  |      |    | 
|----------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                |  | Page
|                                                                                                |  |     
|Consolidated Statements of Earnings  1999, 1998 and
	1997                                      |  |      | 28 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Balance Sheets  1999 and 1998                                                     |  |      | 29 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Statements of Comprehensive Income and
	Shareholders Equity  1999, 1998 and 1997 |  |      | 30 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Consolidated Statements of Cash Flows  1999, 1998 and
	1997                                    |  |      | 31 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Notes to Consolidated Financial Statements                                                      |  |      | 32 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Report of Independent Auditors                                                                  |  |      | 48 | 
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Supplementary Financial Information                                                             |  |      | 48 | 

The following consolidated financial statement
schedule of Milacron Inc. and subsidiaries is included in
Item 14(d) for the years ended 1999, 1998 and 1997:

|                                                              |  |      |    | 
|------------------------------------------------------------- |  | ---- | -- | 
|                                                              |  | Page
|                                                              |  |     
|Schedule II  Valuation and Qualifying Accounts
	and Reserves |  |      | 52 | 

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

49



---



Item 14 (a) (3)  List of Exhibits



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



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

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



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

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



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



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

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



| |     |                       
| | --- | ----------------------
| | 4.2 | 7  7/8% Notes due 2000

|  |                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------
| | Incorporated by reference to the companys
	Registration Statement on Form S-4 dated July 21, 1995
	(File No. 33-60081).



| |     |                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.3 | Milacron Inc. hereby agrees to furnish to the
	Securities and Exchange Commission, upon its request, the
	instruments with respect to long-term debt for securities
	authorized thereunder which do not exceed 10% of the
	registrants total consolidated assets.

9.  Voting Trust Agreement 
not applicable.

10.  Material Contracts:



| |      |                                       
| | ---- | --------------------------------------
| | 10.1 | Milacron 1987 Long-Term Incentive Plan

|  |                                                                                          
|- | -----------------------------------------------------------------------------------------
| | Incorporated herein by reference to the
	companys Proxy Statement dated March  27, 1987.



| |      |                                       
| | ---- | --------------------------------------
| | 10.2 | Milacron 1991 Long-Term Incentive Plan

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



| |      |                                       
| | ---- | --------------------------------------
| | 10.3 | Milacron 1994 Long-Term Incentive Plan

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



| |      |                                                   
| | ---- | --------------------------------------------------
| | 10.4 | Milacron 1997 Long-Term Incentive Plan, as amended

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



| |      |                                                   
| | ---- | --------------------------------------------------
| | 10.5 | Milacron 1996 Short-Term Management Incentive Plan

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



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

|  |                
|- | ---------------
| | Filed herewith.



| |      |                                                  
| | ---- | -------------------------------------------------
| | 10.7 | Milacron Supplemental Retirement Plan, as amended

|  |                
|- | ---------------
| | Filed herewith.



| |      |                                                                            
| | ---- | ---------------------------------------------------------------------------
| | 10.8 | Milacron Inc. Plan for the Deferral of
	Directors Compensation, as amended

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



| |      |                                                                      
| | ---- | ---------------------------------------------------------------------
| | 10.9 | Milacron Inc. Retirement Plan for Non-Employee
	Directors, as amended

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



| |       |                                                             
| | ----- | ------------------------------------------------------------
| | 10.10 | Milacron Supplemental Executive Retirement Plan,
	as amended

|  |                
|- | ---------------
| | Filed herewith.



| |       |                                                                                                                                                                                                                           
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.11 | Amended and Restated Revolving Credit Agreement
	dated as of November 30, 1998 among Milacron Inc., Cincinnati
	Milacron Kunststoffmaschinen Europe GmbH, the lenders listed
	therein and Bankers Trust Company, as agent.



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

50



---





| |       |                                                
| | ----- | -----------------------------------------------
| | 10.12 | Milacron Compensation Deferral Plan, as amended

|  |                
|- | ---------------
| | Filed herewith.



| |       |                                                                                                                                      
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------
| | 10.13 | Rights Agreement dated as of February 5,
	1999, between Milacron Inc. and Chase Mellon Shareholder
	Services, L.L.C., as Rights Agent

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



| |       |                                                                                                                                                                      
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.14 | Purchase and Sale Agreement between UNOVA, Inc.,
	UNOVA Industrial Automation Systems, Inc., UNOVA U.K. Limited and
	 Cincinnati Milacron Inc. dated August 20, 1998.

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



| |       |                                                                                                                                         
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------
| | 10.15 | Purchase and Sale Agreement between Johnson
	Controls, Inc., Hoover Universal, Inc. and Cincinnati Milacron
	Inc., dated August 3, 1998.

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



| |       |                                                                                                                                                                                                                                                        
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.16 | Amendment Number One to the Amended and Restated
	Revolving Credit Agreement dated as of November 30, 1998
	among Milacron Inc., Cincinnati Milacron Kunststoffmaschinen
	Europe GmbH, the lenders listed therein and Bankers Trust
	Company, as agent.

|  |               
|- | --------------
| | Filed herewith



| |       |                                              
| | ----- | ---------------------------------------------
| | 10.17 | Milacron Supplemental Executive Pension Plan.

|  |               
|- | --------------
| | Filed herewith



| |       |                                                                                                               
| | ----- | --------------------------------------------------------------------------------------------------------------
| | 10.18 | Milacron Compensation Deferral Plan Trust
	Agreement by and between Milacron Inc. and Reliance Trust
	Company.

|  |                
|- | ---------------
| | Filed herewith.



| |       |                                                                                                                 
| | ----- | ----------------------------------------------------------------------------------------------------------------
| | 10.19 | Milacron Supplemental Retirement Plan Trust
	Agreement by and between Milacron Inc. and Reliance Trust
	Company.

|  |                
|- | ---------------
| | Filed herewith.

11.  Statement Regarding Computation of
Per-Share Earnings

12.  Statement Regarding Computation of
Ratios  not applicable

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

16.  Letter regarding Change in
Certifying Accountant  not applicable

18.  Letter regarding Change in
Accounting Principles  not applicable

21.  Subsidiaries of the Registrant



|    |                                                                          
|--- | -------------------------------------------------------------------------
|22. | Published Report Regarding Matters Submitted to
	Vote of Security Holders

|  |                                                                                  
|- | ---------------------------------------------------------------------------------
| | Incorporated by reference to the companys
	Proxy Statement dated March 26, 1999.

23.  Consent of Experts and Counsel

24.  Power of Attorney  not
applicable

27.  Financial Data Schedule

99.  Additional Exhibits  not
 applicable

Item 14(b)  Reports on Form 8-K



| |   |                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | A Current Report on Form 8-K, Item 5,
	dated December 13, 1999, was filed regarding certain
	efficiency initiatives with charges to be absorbed primarily in
	the fourth quarter of 1999 and the first half of 2000.

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

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

51



---



Milacron Inc. and Subsidiaries







|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |         | 
|--------------- | ---------------------------------------- | ---------- |  | ---------- |  | ---------- |  | ---------- |  | --------- | ----- | ------ | --- |  | ----- | ------- | --- |  |  | ------- | 
|                |                                          |            |  |            |  |            |  |           
|Col. A          |                                          | Col. B     |  | Col. C     |  | Col. D     |  | Col. E    
|               
|               
|                |                                          |            |  |           
|                |                                          | Additions  |  |           
|                |                                          |            |  |           
|                |                                          | Balance at |  | Charged to |  |            |  |            |  | Balance  
|                |                                          | Beginning  |  | Cost and   |  | Other      |  | Deductions |  | at End   
|Description     |                                          | of Period  |  | Expenses   |  |  Describe |  |  Describe |  | of Period
|               
|               
|Year ended 1999 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $12,083    |  |            |  | $ 5,021    |  |           |       | $   46 | (a) |  |       | $ 2,618 | (b) |  |  | $12,103 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 534   | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 1,895 | (d)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and consolidation reserves |            |  | $   521    |  |            |  | $14,137    |  |           |       | $5,722 | (e) |  |       | $ 1,852 | (b) |  |  | $17,836 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 692   | (c)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $37,350    |  |            |  | $ 9,920    |  |           |       | $ 271  | (a) |  |       | $ 6,791 | (b) |  |  | $37,645 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 2,512 | (c)     |     |  |  |        
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 593   | (d)     |     |  |  |        
|               
|Year ended 1998 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $13,004    |  |            |  | $ 5,757    |  |           |       | $1,341 | (a) |  |       | $ 4,639 | (b) |  |  | $12,083 | 
|                |                                          |            |  |            |  |            |  |            |  |           | 199   | (c)    |     |  | 3,579 | (d)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and integration reserves   |            |  | $   933    |  |            |  | $         |  |           |       | $     |     |  |       | $   412 | (b) |  |  | $   521 | 
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $41,657    |  |            |  | $10,074    |  |           |       | $1,093 | (a) |  |       | $10,137 | (b) |  |  | $37,350 | 
|                |                                          |            |  |            |  |            |  |            |  |           | 1,771 | (c)    |     |  | 7,108 | (d)     |     |  |  |        
|               
|Year ended 1997 |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  |       |         |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for doubtful accounts          |            |  | $13,715    |  |            |  | $ 5,528    |  |           |       | $ 200  | (a) |  |       | $ 5,624 | (b) |  |  | $13,004 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 815   | (c)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Restructuring and integration reserves   |            |  | $ 2,324    |  |            |  | $         |  |           |       | $     |     |  |       | $ 1,266 | (b) |  |  | $   933 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 125   | (c)     |     |  |  |        
|               
|               
|               
|               
|               
|                | Allowance for inventory obsolescence     |            |  | $45,649    |  |            |  | $12,636    |  |           |       | $     |     |  |       | $13,223 | (b) |  |  | $41,657 | 
|                |                                          |            |  |            |  |            |  |            |  |           |       |        |     |  | 3,405 | (c)     |     |  |  |        
|               

|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(a) | Consists of reserves of subsidiaries purchased
	during the year.                
|(b) | Represents amounts charged against the reserves
	during the year.               
|(c) | Represents foreign currency translation adjustment
	 during the year.           
|(d) | Consists of reserves of business sold during the
	year.                         
|(e) | Reserves established in connection with allocation
	 of Uniloy acquisition cost.

52



---





Signatures


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



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



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

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



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

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



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

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



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

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

Date: March 7, 2000

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

|                                                                  |  |                                                                                                                                               
|----------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|/s/ Neil A. ArmstrongNeil A. Armstrong; March 7, 2000
	(Director) |  | /s/ Darryl F. Allen
	-----------------------------------------------------------
	Darryl F. Allen; March 7, 2000
	(Director)                  
|/s/ Harry A. HammerlyHarry A. Hammerly; March 7, 2000
	(Director) |  | /s/ Barbara Hackman Franklin
	-----------------------------------------------------------
	Barbara Hackman Franklin; March 7, 2000
	(Director)
|/s/ David L. BurnerDavid L. Burner; March 7, 2000
	(Director)     |  |                                                                                                                                               

53



---



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

|               |  |                                                                                                                                                                                                                                                         |  |                 
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|               |  |                                                                                                                                                                                                                                                         |  | Page            
|               |  |                                                                                                                                                                                                                                                         |  |                 
|Exhibit 10.6   |  | Milacron Supplemental Pension Plan, as amended                                                                                                                                                                                                          |  | Bound Separately
|Exhibit  10.7  |  | Milacron Supplemental Retirement Plan, as amended                                                                                                                                                                                                       |  | Bound Separately
|Exhibit  10.10 |  | Milacron Supplemental Executive Retirement Plan, as amended                                                                                                                                                                                             |  | Bound separately
|Exhibit  10.12 |  | Milacron Compensation Deferral Plan, as amended                                                                                                                                                                                                         |  | Bound Separately
|Exhibit  10.16 |  | Amendment Number One to the Amended and Restated revolving Credit
	 Agreement dated as of November 30,1998 among Milacron Inc.,
	 Cincinnati Milacron Kunststoffmaschinen Europe GmbH, the lenders
	 listed therein and Bankers Trust Company, as agent |  | Bound Separately
|Exhibit  10.17 |  | Milacron Supplemental Executive Pension Plan                                                                                                                                                                                                            |  | Bound Separately
|Exhibit  10.18 |  | Milacron Compensation Deferral Plan Trust Agreement by and
	between Milacron Inc. and Reliance Trust Company                                                                                                                                            |  | Bound Separately
|Exhibit  10.19 |  | Milacron Supplemental Retirement Plan Trust Agreement by and
	between Milacron Inc. and Reliance Trust Company                                                                                                                                          |  | Bound Separately
|Exhibit 11     |  | Computation of Per-Share Earnings                                                                                                                                                                                                                       |  | Bound Separately
|Exhibit 21     |  | Subsidiaries of the Registrant                                                                                                                                                                                                                          |  | Bound Separately
|Exhibit 23     |  | Consent of Experts and Counsel                                                                                                                                                                                                                          |  | Bound Separately
|Exhibit 27     |  | Financial Data Schedule                                                                                                                                                                                                                                 |  | Bound Separately

54