 Sales by Segment 2000 Sales $6.6 Billion Engine Business  61% Power Generation  Business  21%  Filtration  Business   and Other  18% The GLYPH<210>OtherGLYPH<211> in this category refers to our 16 company-owned distributors across the globe, which represent strategic growth opportunities for Cummins. This year, we added three new distributors, two in Latin America and one in South Africa. As a group, we expect them to continue to grow by 10 percent each year over the next several years.  -  Also included in this category is our turbocharger business, Holset. It grew 26 percent in sales and doubled in profits over the year. Holset continues to play a critical role in our emissions technology research and development. -  Together, these two businesses provide the best return on assets  of all of our businesses.  -  The Engine Business (61 percent  of revenue, 10 percent of EBIT*) posted operating earnings of $24 million for the full year, reflecting strong segments in the group: High-horsepower engine sales for mining, rail equipment and govern- ment applications are 18 percent higher than a year ago, and growing. -  Despite the recent slump in the light- duty automotive business, our 13-year relationship with DaimlerChrysler has never been better. DaimlerChrysler acknowledges that Cummins is one of its best suppliers. We have also con- tinued to improve our performance in quality and in reducing costs. -  Although down in the second half, shipments to construction, agriculture and marine markets were still four percent higher than a year ago. -  Shipments of heavy-duty and medium- duty truck engines in international markets increased 18 percent. -  This brings us to the heavy-duty truck engine market in North America, which fell 39 percent in 2000. The Engine Business worked diligently throughout the year to mitigate the effects of the downturn in that market by consoli- dating facilities, reducing its workforce, and continuing to reduce costs. -  2001 and Beyond  As I write this letter, weGLYPH<213>ve had only a few weeks to view our performance for 2001. We expect the first quarter of 2001 to be worse than the fourth quarter of 2000. The truck market will likely be down another 20 percent, and other consumer markets are also softening. To address this immediate issue, we will continue to reduce our costs through streamlining and con- solidating production and reducing our workforce.  3 0 100 200 300   $400 Million 2000 1999 1998 Earnings Before  Interest & Tax* *Excludes special charges