activities. Additionally, foreign currency positions are  partially offsetting and are netted against one another  to reduce exposure. Some products made in the United States are sold abroad, primarily in Canada. As a result, sales of such products are affected by the value of the U.S. dollar rela- tive to other currencies. Any long-term strengthening of the U.S. dollar could depress these sales. Also, competitive conditions in the company’s markets may limit its ability to increase product pricing in the face of adverse currency movements. Interest Our exposure to market risks for changes  in interest rates relates primarily to our short-term  investments, short-term borrowings and interest rate  swap agreement. We have no earnings or cash flow expo- sure due to market risks on our long-term debt obligations as a result of the fixed-rate nature of the debt. However, interest rate changes would affect the fair market value of the debt. At July 31, 2001, the fair value of the company’s long-term debt approximates market. Market risk is esti- mated as the potential decrease in fair value resulting from a hypothetical one-half percent increase in interest rates and amounts to approximately $3.2 million. On June 6, 2001, the company entered into an interest rate swap agreement effectively converting a portion of  the company’s interest rate exposure from a fixed rate to  a variable rate basis to hedge against the risk of higher borrowing costs in a declining interest rate environment. The company does not enter into interest rate swap con- tracts for speculative or trading purposes; as the differen- tial to be paid or received on the interest rate swap agree- ment is accrued and recognized as an adjustment to interest expense as interest rates change. The interest  rate swap agreement has an aggregate notional amount  of $27.0 million maturing on July 15, 2008. The variable  rate is based on the current six-month London Interbank Offered Rates (“LIBOR”). This transaction resulted in a decrease to interest expense of $45,000 for the year ended July 31, 2001. Forward-Looking Statements The company desires to take advantage of the “safe har- bor” provisions of the Private Securities Litigation Reform Act of 1995 and is making this cautionary statement in connection with such safe harbor legislation. This Annual Report to Shareholders, any Form 10-K, Form 10-Q or Form 8-K of the company or any other written or oral statements made by or on behalf of the company may include forward-looking statements which reflect the com- pany’s current views with respect to future events and financial performance but involve uncertainties that could significantly impact results. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements” within the mean- ing of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this Annual Report are “forward-looking statements,” and are based on man- agement’s current expectations of the company’s near-term results, based on current information available pertaining to the company. The company wishes to caution investors that any  forward-looking statements made by or on behalf of the company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to: risks associated with chang- ing world economic and political factors, the company’s international operations, interest and currency rate fluctu- ations, commodity prices, highly competitive markets, changes in capital spending levels by customers, changes in product demand and changes in the geographic and product mix of sales, integration of acquisitions and acquisition opportunities, ongoing plant and product line rationalization projects, ongoing information technology improvements, research and development expenditures, government laws and regulations, including diesel emis- sions controls. For a more detailed explanation of the fore- going and other risks, see exhibit 99 to our current Annual Report on Form 10-K, which is filed with the Securities and Exchange Commission. The company wishes to caution investors that other factors may in the future prove to be important in affecting the company’s results of operations. New factors emerge from time to time and it is not possi- ble for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of fac- tors, may cause actual results to differ materially from those contained in any forward-looking statements. Investors are further cautioned not to place undue reliance on such forward-looking statements as they speak only to the company’s views as of the date the statement is made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 15