A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T Dear Fellow Shareholders: 2004 was a year of record performance. The Company achieved new records for sales, EPS and cash  fl  ow. Sales grew 23% to $1.5 billion  and EPS grew 44% to $1.82 (excluding the 2003 one-time expense for early extinguishment of debt). The  fourth quarter of 2004 represented the twelfth consecutive increase in quarterly EPS. This performance  was far ahead of the industry. Net income as a percentage of sales reached 11%; a level of pro fi  tability,  again, far better than the industry. In addition, we maintained our strong  fi  scal discipline generating the  highest level of free cash  fl  ow in the Company’s history; a cash  fl  ow that is vital to insuring the  fl  exibility  to reinvest in the many opportunities we see. In addition to the outstanding  fi  nancial performance, the Company achieved a number of important  milestones in 2004. These include: 4 ♦ The achievement of an upgrade in credit rating re fl  ecting our strong  fi  nancial condition; ♦ The successful transition to a broader shareholder base as KKR phased out their investment; ♦ Inclusion in the S&P 400 Mid Cap Index; ♦ The second stock split in four years; ♦ Initiation of a 5 million share stock repurchase program; and  ♦  The declaration, effective in 2005, of the  fi  rst cash dividends in the Company’s history. 