So, when we put the picture together, we’re expecting ’03 results of $760 million in sales, a 6% increase over ’02, and net earnings of $42.4 million, or $2.75 per share, a 10% increase on a per-share basis. We think that each of our quarters will experience the same 10% EPS increase that we expect for the entire year.

We’re delighted to be able to report that our military aircraft business continues to improve. Sales growth, coupled with impressive margins, supports our plan for double-digit growth in earnings per share, even during this period when commercial aircraft sales are on the decline, when the space business is slower than we’d like, and while we’re operating in a relatively very weak industrial economy. Over the years, we’ve repeatedly emphasized the importance of the diversity of our product lines. We carry our high-performance actuation technology into a number of different end markets, and it’s extremely rare that all of them are in trouble at the same time. I think the experience of fiscal ’02 and the projections for ’03 are a dramatic reflection of the strength in that diversity.

I now turn you over to Bob Banta who will discuss cash flows and our projections for debt reduction.

R.R. Banta, CFO

First, some details about the EBITDA numbers Bob gave you. Depreciation and amortization was $25.6 million and capital expenditures $27.3 million for all of ’02.

Total debt, net of cash balances of $16.0 million was $300.5 million at September 30. That’s down $20.7 million from our third quarter level and down by $58.5 million from the end of ’01. During the year, net cash proceeds from our equity offering of $39 million less $11.4 million in cash acquisitions in ’02 means that $31 million of debt reduction came from operations in the year.

Before we update our outlook for debt reduction in ’03, let ‘s go over the status of Moog’s various defined benefit pension plans at the end of ’02.

Moog has defined benefit plans in six countries. Our total projected benefit obligations (PBO’s) are estimated to be $264 million. These benefit plans had $150 million in dedicated assets. So, we’re underfunded by $114 million compared to an underfunded status of $78 million at the end of ‘01. This change resulted in an after-tax minimum liability adjustment to our shareholder’s equity of $21 million during ’02.

However, in the year, strong net earnings of $38 million, favorable currency translations and our equity offering provided significant increases to shareholders’ equity. Our shareholders’ equity increased by $64 million in ‘02 in spite of the negative pension adjustment. So, with debt down by $59 million and net equity up by $64 million, our long-term debt to cap ratio was 49% compared to 59% when we started the year.

Our cash planning and debt reduction for ’03 assumes that we’ll continue with strong cash flows from earnings, increase our cash outlays for pensions from the $7 million we paid in in ’02 to about $17 million and still be able to reduce debt by about $20 million in ’03. This debt paydown like ’02 will be more noticeable in the later quarters of the year, particularly as we have high interest payments to make in our first quarter.

We’re using an ROA assumption of 8.5% going forward which compares closely to what we’ve achieved over the last decade. Increased pension expense estimates by our actuaries using FAS 87 models have been built into our estimates of $2.75 per share for ’03.