ELEVEN-YEAR COMPARISON OF RESULTS Donaldson Company, Inc. and Subsidiaries Amounts are adjusted for all stock splits and reflect adoption of SFAS 128. Operating income is gross margin less selling, general and administrative, and research and development expense. Return on investment is net earnings divided by average long-term debt plus average shareholders’ equity. Long-term capitalization ratio is long-term debt divided by long-term debt plus shareholders’ equity. $^{(1)}$Excludes the cumulative effect of an accounting change of $2,206, or $.08 per share, in 1994. 8 (Thousands of dollars, except per share amounts) 2001 2000 1999 1998 OPERATING RESULTS Net sales $1,137,015 $1,092,294 $944,139 $940,351 Gross margin $ 341,734 327,521 275,681 263,262 Gross margin percentage 30.1% 30.0 % 29.2 % 28.0 % Operating income $ 112,108 105,594 88,390 86,799 Operating income percentage 9.9% 9.7 % 9.4 % 9.2 % Interest expense $ 11,608 9,880 6,993 4,671 Earnings before income taxes $ 104,928 100,333 89,210 86,441 Income taxes $ 29,380 30,100 26,763 29,390 Effective income tax rate 28.0% 30.0 % 30.0 % 34.0 % Net earnings $ 75,548 70,233 62,447 57,051 Return on sales 6.6% 6.4 % 6.6 % 6.1 % Return on average shareholders’ equity 25.2% 25.9 % 24.1 % 22.8 % Return on investment 19.1% 19.4 % 19.0 % 20.5 % FINANCIAL POSITION Total assets $ 706,830 677,525 542,246 512,987 Current assets $ 407,227 383,347 326,388 300,817 Current liabilities $ 217,279 243,590 142,055 165,068 Working capital $ 189,948 139,757 184,333 135,749 Current ratio 1.9 1.6 2.3 1.8 Current debt $ 59,416 85,313 20,696 45,896 Long-term debt $ 99,259 92,645 86,691 51,553 Total debt $ 158,675 177,958 107,387 97,449 Shareholders’ equity $ 319,093 280,165 262,763 255,671 Long-term capitalization ratio 23.7% 24.9 % 24.8 % 16.8 % Property, plant and equipment, net $ 207,658 204,545 182,180 178,867 Net expenditures on property, plant and equipment $ 38,924 36,417 29,539 54,705 Depreciation and amortization $ 38,577 34,326 27,686 25,272 SHAREHOLDER INFORMATION Net earnings per share – assuming dilution $ 1.66 1.51 1.31 1.14 Dividends paid per share $ .295 .27 .23 .19 Shareholders’ equity per share $ 7.19 6.27 5.69 5.28 Shares outstanding (000s) 44,383 44,658 46,197 48,382 Common stock price range, per share High $ 33.05 24.81 25.88 27.19 Low $ 19.13 19.13 14.44 18.56