Carlisle Companies, Incorporated
 TO  OUR  SHAREOWNERS

Dear Shareowner:

Carlisle started the year 2000 strong, with record sales and earnings for the first three quarters. However, in the fourth quarter, some of our major markets softened significantly, as they did for the majority of other industrial US companies. This softening resulted in financial performance below our targets. Nonetheless, we finished 2000 with record sales of nearly $1.8 billion and earnings of $96.2 million. Though we are pleased to achieve these milestones in a weakening economy, we remain dedicated to improving our performance by a relentless focus on customer satisfaction and cost reductions. Our balance sheet is strong, our operating principles are sound, our strategy is clear and our future is promising.

We expect Carlisle to perform well under all market conditions. Our commitment to growth in niche markets by bringing value enhancing products to our customers will continue to produce success as we face the near term economic slowdown. While this environment brings new challenges, it also provides new opportunities. In a slower economic environment we can increase our market shares by using existing manufacturing resources to better meet the demands of both present and new customers. Our decentralized management structure allows operating management to respond quickly to changing customer needs. Our ongoing dedication to reducing costs provide the latitude to move rapidly as our markets change. Our presence in many repair and replacement parts markets dampens the effect of a softer economy. Our long-held principles provide the foundation for our future success.

Carlisle has the financial resources to take advantage of opportunities to expand into new markets, which will be more available in a slower economic environment. We possess the experience and capability to take advantage of these opportunities. We have not reduced our targets; we expect to meet our long-term goals.

Our year 2000 is a mixed picture. We struggled with reduced demand in some markets, especially in the fourth quarter, yet we enjoyed increased demand in other markets. We made a number of acquisitions that will enhance future results. The following are some highlights:

  • Carlisle Tire & Wheel had another record year in 2000, making major advancements in its product offerings, manufacturing efficiencies and replacement parts distribution. Carlisle Tire & Wheel acquired Titan International's Consumer Tire and Wheel Division in 2000. As we integrate this acquisition, it will strengthen our ATV and commercial lawn and garden product offerings. Additionally, major expansions at two offshore plants in China and Trinidad will provide the capacity for future growth.

  • One of our outstanding performing companies in 2000 was Tensolite. As Tensolite meets and exceeds customer needs, our aerospace wire is receiving broader acceptance in large commercial aircraft and regional and business jet markets. TuffliteTM is becoming the aerospace wire of choice. Tensolite's high performance cable assemblies and interconnect systems, along with its radio frequency microwave technology, are rapidly growing in the wireless communication and test equipment markets and with data processing equipment manufacturers. Tensolite's revenues and earnings growth in 2000 exceeded our targets. Carlisle will invest further in this exciting technology.

  • Carlisle Process Systems, Carlisle's cheese manufacturing equipment unit, had an excellent year. It continues its quest to build a global presence with four acquisitions - Zimmer, Process Controls Engineering, Bontech and Damrow. Each of these companies enhances Carlisle Process Systems' technical capabilities and global market coverage. These acquisitions helped achieve record earnings for Carlisle Process Systems in 2000. This business is well positioned for 2001.

  • Carlisle Life Sciences made significant progress by bringing on new products, broadening their market exposure and accelerating both sales and earnings. Carlisle's expertise in the isolation and containment systems used in food processing, dairy, pharmaceutical and biotechnical material handling, is becoming known worldwide.

Management: In February 2001, Richmond D. McKinnish was appointed Chief Executive Officer in addition to his position as President. In his twenty six years with Carlisle, Rick has led two of Carlisle's most successful business units and is well respected within Carlisle for his action oriented, lean cost and customer focused style. The entire Carlisle organization shares Stephen Munn's and Dennis Hall's utmost confidence in Rick's abilities to lead Carlisle.

Stephen P. Munn will remain as Chairman of the Board and Dennis Hall, currently Vice Chairman and Chief Financial Officer, will stay with the company for approximately one year to assist with transition issues, after which he will retire from the company. The Board of Directors' leadership in the management transition ensures that Carlisle will be as successful in the future as it has been in the past.

With the economy slowing for the first time in ten years and Carlisle's executive management transition, the year 2000 was indeed a year of change. However, what will not change is Carlisle's commitment to excellence, to our long-term goals, to growth and to the shareowners. Carlisle remains committed to continuing its past history of providing value to our investors.

For the Board of Directors,

Munn, McKinnish, and Hall


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