Fellow Shareholders 2000 was a distinctly different year from the first to the second half. In the first half of the year, we posted profit after taxes of $103 million and earned $2.70 per share; in the second half, profit after taxes was $8 million and earnings per share fell to 21 cents, excluding a pre-tax charge of $160 million in the fourth quarter. The erosion in profit was due to a sudden and pronounced downturn in a number of markets, reflecting the overall uncertainty of todayGLYPH<213>s economy. In past years, this kind of downturn would have meant large losses for the Company. However, we broke even in the fourth quarter on an EBIT* basis. We are a much different company than we were even a year ago, and are now seeing the benefits of the diversification and cost reduction strategies we have pursued. The businesses and markets which account for over 80 percent of our revenues are profitable and growing, and we are working to ensure that the remaining 20 percent will be profitable in the future. Let me review our businesses with you.  Heavy-duty engine shipments in North America fell 39 percent from the first to the second half of the year. In the fourth quarter, shipments of our midrange engine to DaimlerChrysler were 25,000 units, down from an average of 31,000 units for the first three quarters of the year, as DaimlerChrysler cut production of its Dodge Ram pickup truck. In North America, shipments of medium-duty truck engines declined 24 percent from the first to the second half of the year. During that same period, shipments of engines to the North American construction market declined 28 percent, and sales of engines to the recreational vehicle market were down 18 percent. The decline in the heavy-duty engine business also affected exhaust systems sales in our Filtration Business, which fell 13 percent from the first to the second half.  Filtration and Other Business  (18 percent of revenue, 49 percent  of EBIT*) remained solidly profitable, despite being affected by a depressed heavy-duty engine market. We are gaining market share as original equipment manufacturers (OEMs) respond favorably to the natural synergy among our engine, filtration, and exhaust products.  Power Generation (21 percent of revenue, 41 percent of EBIT*) has moved from a break-even business just three years ago to one that was able to nearly double its profits over 1999. We project 10 to 15 percent growth in Power Generation over the next few years, fueled by rising global demand for power from ready sources. The energy issues in California highlight even more the need for reliable power and full service support.  Business Overview * Earnings Before Interest and Taxes (EBIT), excluding special charges. 2$^{■}$ 4000 5000 6000 7000 $8000 Million 2000 1999 1998 Sales 