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Loss: The only component of accumulated other comprehensive loss is cumulative translation adjustments. Deferred taxes have not been provided for the translation adjustments in accordance with SFAS No. 109, “Accounting for Income Taxes.” 

Derivative Instruments: SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” establishes accounting and reporting standards requiring that certain derivative instruments be recorded in the balance sheet as either an asset or liability measured at its fair value. The Company currently does not hold any such derivative instruments. 

## REVOLVING CREDIT FACILITY 

The Company has a $50 million unsecured, revolving credit facility (the “Credit Facility”), of which $30 million expires October 31, 2001, and $20 million expires October 31, 2003. Interest on borrowings under the Credit Facility are at varying rates based, at the Company’s option, on the London Interbank Offering Rate, the Federal Funds Rate, or the bank’s prime rate. There were no outstanding borrowings at July 1, 2001, or July 2, 2000. There were no borrowings under the credit facility during the years ended July 1, 2001, and July 2, 2000. 

The Credit Facility contains various restrictive covenants that require the Company to maintain minimum levels for certain financial ratios, including tangible net worth, ratio of indebtedness to tangible net worth and fixed charge coverage. 

## COMMITMENTS AND CONTINGENCIES 

In 1995, the Company recorded a provision of $3.0 million for estimated costs to remediate a site at the Company’s Milwaukee facility that was contaminated by a solvent spill, which occurred in 1985. The Company continues to monitor and evaluate the site and minimal activity has taken place since the provision was recorded in 1995. The ultimate resolution of this matter is still unknown. However, management believes, based upon findings-to-date and known environmental regulations, that the environmental reserve at July 1, 2001, is adequate to cover any future developments. 

## INCOME TAXES 

The provision for income taxes consists of the following (thousands of dollars): 

<img src='content_image/72570.jpg'>

## Accumulated Other Comprehensive 

A reconciliation of the U.S. statutory tax rates to the effective tax rates follows: 

<img src='content_image/72572.jpg'>

The components of deferred tax assets and (liabilities) are as follows (thousands of dollars): 

<img src='content_image/72571.jpg'>

Foreign income before the provision for income taxes was not significant for each of the years indicated. 

## RETIREMENT PLANS AND POSTRETIREMENT COSTS 

The Company has a noncontributory defined benefit pension plan covering substantially all U.S. associates. Benefits are based on years of service and final average compensation. The Company's policy is to fund at least the minimum actuarially computed annual contribution required under the Employee Retirement Income Security Act of 1974 (ERISA). Plan assets consist primarily of listed equity and fixed income securities. The Company recognizes the expected cost of retiree health care benefits for substantially all U.S. associates during the years that the associates render service. Effective June 1, 2001, any new U.S. associates hired after the above date are no longer eligible for postretirement plan benefits. The postretirement health care plan is unfunded. 

