We believe this management’s discussion and analysis contains forward-looking statements. See the last section for certain risks and uncertainties.

SIGNIFICANT EVENTS

Net income increased $156.3 million from $169.6 million in 1999 to $325.9 million in 2000. Income from continuing operations, excluding special items, increased to $317.5 million, or $2.97 a diluted share in 2000 as compared to $305.9 million, or $2.75 a diluted share in 1999.

EBITDA, as defined under Liquidity and Capital Resources herein, increased $54.7 million from $752.8 million in 1999 to $807.5 million in 2000. Operating cash flow decreased $13.3 million from $243.3 million in 1999 to $230.0 million in 2000.

Aerospace and Engineered Industrial Products operating income margins increased to 16.1 percent and 17.7 percent in 2000 as compared to 15.4 percent and 16.8 percent in 1999.

The Company recorded $45.6 million ($29.5 million after tax) and $232.1 million ($172.8 million after tax) of merger-related and consolidation costs in 2000 and 1999, respectively.

The Company decided to divest its Performance Materials Segment during 2000. Accordingly, the results of operations, net assets and cash flows of Performance Materials have been reflected as a discontinued operation for all periods presented. Unless otherwise noted herein within MD&A, disclosures pertain to the Company’s continuing operations.

The Company repurchased approximately 9.3 million shares of its common stock (approximately $300 million) during 2000 in accordance with a share repurchase program approved by its Board of Directors.

The Company reduced its effective tax rate from continuing operations to approximately 34 percent during 2000.