CONSOLIDATED BALANCE SHEETS Donaldson Company, Inc. and Subsidiaries (Thousands of dollars, except share amounts) At July 31, 2001 2000 ASSETS Current Assets Cash and cash equivalents $ 36,136 $ 32,017 Accounts receivable, less allowance of $6,309 and $4,380 230,046 202,361 Inventories Raw materials 50,426 45,064 Work in process 21,209 20,171 Finished products  40,999 54,128 Total Inventories 112,634 119,363 Deferred income taxes 12,746 18,411 Prepaids and other current assets 15,665 11,195 Total Current Assets 407,227 383,347 Property, Plant and Equipment, at cost Land  6,890 7,432 Buildings  117,029  119,203 Machinery and equipment 345,073 333,310 Construction in progress 22,603 9,756 491,595 469,701 Less accumulated depreciation  (283,937) (265,156) 207,658 204,545 Deferred Income Taxes – 408 Intangible Assets 61,658 63,885 Other Assets 30,287 25,340 $ 706,830 $ 677,525 LIABILITIES & SHAREHOLDERS’ EQUITY Current Liabilities Short-term borrowings $ 59,393 $ 85,034 Current maturities of long-term debt 23 279 Trade accounts payable 100,287 90,188 Accrued employee compensation and related taxes 29,945 29,759 Accrued liabilities 17,597 27,974 Other current liabilities 10,034 10,356 Total Current Liabilities 217,279 243,590 Long-term Debt  99,259 92,645 Deferred Income Taxes 9,189 – Other Long-term Liabilities 62,010 61,125 Commitments and Contingencies (Note J) Shareholders’ Equity  Preferred stock, $1.00 par value, 1,000,000 shares authorized, none issued – – Common stock, $5.00 par value, 80,000,000 shares authorized, 49,655,954 shares issued in 2001 and 2000  248,280 248,280 Additional paid-in capital – 2,967 Retained earnings  203,499 142,176 Accumulated other comprehensive loss  (24,235) (10,523) Treasury stock – 5,273,121 and 4,998,342 shares in 2001 and 2000, at cost (108,451) (102,735) Total Shareholders’ Equity  319,093 280,165 $ 706,830 $ 677,525 17 The accompanying notes are an integral part of these consolidated financial statements.