In 2002, we made excellent progress toward our goal to become a premier diversified industrial enterprise. We stayed on course, and as a result, successfully navigated through rough economic waters.

We outgrew our end markets by approximately $300 million, increased our operating earnings per share by 33 percent, generated an all-time record of $900 million of cash flow from operations and reduced debt by $352 million. This solid performance was made possible by the implementation of a far less capital-intensive business model, and the $130 million of savings realized from the difficult, comprehensive restructuring activities undertaken in 2001 and 2002.

At the same time, we continued tuning our business portfolio, selling our Navy Controls business and adding the Boston Weatherhead business from Dana Corporation and the aerospace circuit breaker line from Mechanical Products Inc. These two acquisitions broaden our offerings as a full-service supplier to the fluid power industry.

We also purchased the remaining 40 percent ownership interest in the Jining Eaton Hydraulics Company, Ltd. (JEHYCO) joint venture in China, further strengthening our competitive position in the Asia-Pacific region.