Despite a challenging economic climate, Carlisle achieved record sales in 2001 by developing new products, increasing our market share in existing business lines and making strategic acquisitions that strengthened our existing market positions or facilitated entry into new markets. We continue to maintain the operational flexibility that allows us to respond efficiently to market trends and changing customer needs.

Many new products premiered during the year: Carlisle Tire & Wheel began to manufacture steel belted radial tires that are used in many towable trailer applications. Trail King, long known for its strong market share in platform trailers, is positioned to take on the bulk material trailers market with its new end dump, side dump, bottom dump and live-bottom trailers. Carlisle

FoodService developed the Promethean line of meal delivery products, extending our marketing presence into the healthcare industry. Carlisle Industrial Brake & Friction added trailer-mounted hydraulic and electric controllers to their HYDRASTAR™ family of trailer brake products; innovative products that provide ease of installation and operation while maintaining an optimum level of braking performance.

We completed six acquisitions during the year adding new capabilities and market breadth to selected units. The previously discussed acquisition of the Dayco Industrial Power Transmission business increased our product offering of rubber-based commercial products. Carlisle Process Systems increased sales 42% through the acquisition of European-based Scheffers, Wincanton and Stork Friesland, solidifying Carlisle’s position as the global leader in cheese-making and milk powder systems. The acquisition of Connecting Devices, Inc. added to Tensolite’s ability to serve the commercial communications and defense electronics markets. SynTec’s acquisition of EcoStar has enabled it to move into the residential roofing market.

Our growth is fueled by free cash flow. Cash flow from operations reached a record $223 million in 2001. We used this cash to fund acquisitions, modernize our facilities and reward our shareowners through dividends. We seek to maximize free cash flow by embracing technologies that help us better understand our customers’ needs and provide the products and services they require, while at the same time reducing our investment in equipment and inventory. We are also working closely with our suppliers and customers to ensure that our cash flow is optimized at an effective cost.

Our focus on growth fueled by a strong balance sheet and free cash flow will enable us to strengthen our existing businesses and exploit strategic value-enhancing acquisition opportunities that are aligned with our long-term objectives. In developing strategies to deal with a difficult market environment, we have established a company-wide focus on free cash flow that will guarantee Carlisle’s continued growth.