Cautionary Statement *Gross profit represents net sales less cost of goods sold as reported in our statements of consolidated earnings. This annual report contains forward-looking statements, including financial projections, our plans and objectives for future operations, expectations of future economic performance, and various other assumptions relating to the future. While such statements reflect our current expectations, all such statements involve risks and uncertainties. Actual results could differ materially from projections or any other forward-looking statement, and we have no obligation to update our forward-looking statements. Important factors that could cause results to differ materially from those projected or otherwise stated include the following: unanticipated global or regional economic developments, particularly in, but not limited to, Asia, Europe, and the United States; political risks, military actions, or trade embargoes affecting customers’ markets, including the possibility of a war in Iraq; other changes in business cycles of particular industries served by our company, primarily OEMs of aircraft engines, both commercial and military, and industrial engines, turbines, and other power equipment, particularly in power generation, transportation, and process industries markets; fluctuations in currency exchange rates of U.S. and foreign countries, primarily those located in Europe and Asia; fluctuations in interest rates, primarily LIBOR, which affect the cost of borrowings; timing and acceptance of new products and product enhancements, including, but not limited to, products that integrate energy control technologies of recently-acquired companies; competitor actions that adversely impact our orders or pricing, including, but not limited to, aftermarket sales; reliability of customer forecasts of their sales volumes and purchase requirements; adverse changes in the business acquisition climate; effects of any business acquisitions or divestitures; changes in U.S. and other country laws and regulations involving acquisitions, the environment, and taxes; relative success of quality and productivity initiatives, such as the Six Sigma initiative and supplier designation levels with key customers; and unusual or extraordinary events or developments involving litigation or other potential liabilities. 46 (Unaudited) 2002 Fiscal Quarters 2001 Fiscal Quarters (In thousands except per share data) First Second Third Fourth First Second Third Fourth Net sales $180,653 $174,864 $171,888 $152,586 $150,730 $170,176 $182,508 $175,377 Gross profit* 39,285 38,570 38,246 24,760 37,329 41,591 44,806 44,038 Reported earnings before cumulative effect of accounting change 13,719 13,623 14,611 3,217 10,908 12,672 13,728 15,760 Goodwill-related amortization, net of income taxes — — — — 681 694 698 802 Adjusted earnings before cumulative effect of accounting change $ 13,719 $ 13,623 $ 14,611 $  3,217 $ 11,589 $ 13,366 $ 14,426 $ 16,562 Basic per share amounts: Reported earnings before cumulative effect of accounting change $ 1.21 $ 1.20 $ 1.29 $ 0.28 $ 0.96 $ 1.12 $ 1.21 $ 1.39 Goodwill-related amortization, net of income taxes — — — — 0.06 0.06 0.06 0.07 Adjusted earnings before cumulative effect of accounting change $ 1.21 $ 1.20 $ 1.29 $ 0.28 $ 1.02 $ 1.18 $ 1.27 $ 1.46 Diluted per share amounts: Reported earnings before cumulative effect of accounting change $ 1.19 $ 1.18 $ 1.26 $ 0.28 $ 0.95 $ 1.10 $ 1.18 $ 1.36 Goodwill-related amortization, net of income taxes — — — — 0.06 0.06 0.06 0.07 Adjusted earnings before cumulative effect of accounting change $ 1.19 $ 1.18 $ 1.26 $ 0.28 $ 1.01 $ 1.16 $ 1.24 $ 1.43 Cash dividends per share  $ 0.2325  $ 0.2325 $ 0.2325 $ 0.2325 $ 0.2325 $ 0.2325 $ 0.2325  $ 0.2325 Common stock price per share High  60.10  72.77  74.65  60.22  49.00  57.73  91.00  86.85 Low 46.50 53.50 54.40 44.85 35.75 40.00 49.00 42.06 Close 58.25 68.80 59.12 47.40 44.75 51.38 84.35 48.45 Selected Quarterly Financial Data