In 2000, a leading independent market research company surveyed 2,000 fleets in North America for brand preference. Fleetguard ranked highest among industry competitors for air, coolant, fuel and lube filtration. The Filtration Business is well positioned for increased growth and profitability as well as consistent year-over-year performance. Its balanced approach in filtration, exhaust and related sub- sidiaries provides customers with an unmatched range of product and service solutions. Our diversification — across technologies, products, markets and geographies — is a source of strength that points to a bright future.  In 2000, our Kuss subsidiary achieved high level recognition in the Ohio Quality Excellence Award. The launch of Six Sigma was a key focus area for the Filtration Business in 2000, with annualized savings from current projects likely to reach $4.5 million. In response to a slowing economy, we have implemented several cost reduction initiatives focused on direct and indirect material cost reductions, manufacturing and distribution facility consolidations and workforce reductions.  The synergies from the combination of Nelson, Fleetguard and Cummins have provided us with unique market oppor- tunities for products that contribute to a cleaner environment. For example, we are applying filtration to exhaust systems in aftertreatment solutions that remove soot from diesel exhaust to meet increasingly stringent emissions standards. In addition, our new high efficiency closed crankcase ventilation systems significantly reduce oil aerosol emissions to the atmosphere.  We also lead the industry in innovative technologies that meet end user needs for extended service life and reduced waste. Our new centrifugal filtration system with the patented ConeStaC“ inner element offers longer service intervals and an incinerable plastic filter element. Our next generation air intake system — Openflow“ — provides longer air filter life while using less component material. CumminsGLYPH<213> 16 international distributors allow us to interface with our end user customers worldwide. Total retail sales exceeded plan for the year. Asian and South American outlets in particular achieved superior results. The Holset turbocharger business continued profitable growth. Holset was first  to market with heavy-duty variable geometry turbochargers, power turbines and titanium compressors for ultra-high pressure ratio applications. The development of new products was focused on improving engine perform- ance to meet higher environmental emission standards. 9 2000 Sales $1.2 Billion Rick Mills Vice President President, Filtration & Fleetguard, Inc. Filtration 69% Holset 9% Company- Owned Distributors 22% Distributors and Holset Earnings Before  Interest & Tax* 2000 1999 1998 0 25 $125 Million 100 75 50 *Excludes special charges