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SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

MILACRON INC.

Securities Registered Pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [X]         No  [   ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [   ]

     The aggregate market value of voting stock held by non-affiliates of the registrant is $460,172,944 at February 28, 2000.*

     *Voting stock held by officers, directors and principal holders is not included in the computation. The company, however, has not made a determination that such individuals are “affiliates” within the meaning of Rule 405 under the Securities Act of 1933.

     Number of shares of Common Stock, $1.00 par value, outstanding as of February 28, 2000:  36,194,275

Documents Incorporated by Reference:

Milacron Inc.

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General

     Incorporated in Delaware in 1983, we are the successor to a business first established in 1884. Throughout most of our history, our primary business was machine tools. Since the early 1990’s, however, two other segments, plastics technologies and metalworking technologies, have grown much more rapidly. In late 1998, therefore, we sold our legacy machine tools business, which at the time accounted for less than one-fourth of our sales, in order to concentrate our resources on our more profitable businesses.

     In our plastics technologies business, we manufacture and sell machines, systems, mold bases, tooling, parts and services for the three primary methods of processing plastic: injection molding, blow molding and extrusion. All of our machines are computer controlled and many are sold with proprietary advanced application software. In our metalworking technologies business, we produce and sell a wide variety of consumable products for metalworking, including high-speed steel and carbide cutting tools, tool holding systems, synthetic and oil-based fluids and grinding wheels, as well as carbide wear parts and industrial magnets.

     From 1992 to 1999, our consolidated sales from continuing operations have grown at a compound annual rate of 22%, from $410 million to over $1.6 billion. We have achieved this growth through strategic acquisitions, internally developed new products and expanded distribution channels. In 1999, 56% of our sales came from plastics technologies and 44% from our metalworking technologies segment. Approximately 34% of our sales consisted of capital goods — all plastics machinery — while durable and consumable goods accounted for most of the remainder.

     Milacron sells products and provides services to industrial customers throughout the world. Sales to customers outside the U.S. increased from $206 million in 1993, representing 31% of total sales, to $720 million in 1999, or 44% of total sales. We have been successful in penetrating international markets through acquisitions, expanded distribution, increased exports, and license and joint venture agreements. We believe our current geographic sales balance helps compensate for varying economic cycles around the world and that our increased presence outside the U.S. reduces our dependence upon the U.S. economy. (See “Presence Outside the U.S.” in Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations)

Strategic Acquisitions and Divestitures

     In our plastics technologies segment, we acquired FM Maschinenbau GmbH (Ferromatik), an injection molding machine business, from Kloeckner-Werke AG in 1993; The Fairchild Corporation’s D-M-E business (D-M-E) in 1996; and the Uniloy plastics machinery division of Johnson Controls, Inc. in 1998.

     Ferromatik is one of Europe’s leading manufacturers of plastics injection molding machines. Ferromatik’s market coverage expanded our plastics processing technology base and product line and enabled us to achieve our objective of establishing a plastics machinery manufacturing and distribution base in Germany to serve Europe and other markets.

     D-M-E is the largest U.S. producer of mold bases, components and supplies for the plastic injection moldmaking industry. D-M-E serves customers throughout much of the world with ten manufacturing facilities, plus several international joint venture operations. We believe D-M-E will continue to enhance our plastics technologies business because it provides the mold bases, supplies and components used in the mold apparatus inside an injection molding machine. D-M-E is the U.S. market leader with a well-established reputation for high quality.

     On September 30, 1998, we acquired the assets of Uniloy for approximately $204 million, including post-closing adjustments. Uniloy, which is known for its Uniloy brand of equipment, as well as various other brands, is one of the world’s leading providers of blow molding machines, as well as structural foam systems, aftermarket parts, services and molds for blow molding. As discussed below, in the third quarter of 1999, we implemented a plan to consolidate Uniloy’s European operations in a new headquarters near Milan, Italy.

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     In 1998 and 1999, Milacron made five smaller acquisitions in the plastics technologies segment. In February, 1998, we acquired Wear Technology, with annual sales of approximately $10 million, which serves the aftermarket for new and rebuilt screws for PVC (poly vinyl chloride) extrusion systems. Also in February, 1998, we acquired Northern Supply, a regional catalog distribution company with annual sales of approximately $5 million, offering supplies to plastics processors for injection molding, blow molding and extrusion. In May, 1998, we acquired Autojectors, Inc., a leading U.S. producer of vertical insert injection molding machinery widely used to make medical, electrical and automotive components. With annual sales of approximately $20 million, Autojectors has operated through two manufacturing facilities near Fort Wayne, Indiana, one of which was closed late in 1999 to improve operating efficiency. In September, 1998, we acquired Master Unit Die Products, Inc., the leading North American manufacturer of quick-change mold bases for the plastics industry. Master Unit Die Products has annual sales of approximately $10 million.

     In July, 1999, we acquired Nickerson Machinery Inc., Pliers International Inc., and Plastic Moulding Supplies Ltd. (collectively, Nickerson). With annual sales of $7 million as of the acquisition date, Nickerson sells supplies and equipment for plastic processing through two catalog distribution centers in the U.S. and one in the U.K. The operation in the U.K. also manufactures and refurbishes screws and barrels for small injection molding machines.

     In the last seven years, Milacron has also made various strategic acquisitions in its metalworking technologies segment: GTE Valenite Corporation (Valenite); Krupp Widia GmbH (Widia); Talbot Holdings, Ltd. (Talbot); Minnesota Twist Drill; Data Flute CNC, Inc.; and Werkzeugfabrik GmbH Königsee (Werkö), all of which manufacture and sell metalcutting and metalworking tools. We believe that Milacron is now the second-largest North American and third-largest worldwide producer of carbide metalcutting tool systems.

     Valenite was acquired in February, 1993. With principal operations in North America, it is a leading producer of consumable industrial metalcutting tools. Widia was acquired in February, 1995. It is one of the world’s leading producers of industrial metalcutting products. Widia’s strong presence in Europe and India complements Valenite’s strengths in the North American and Japanese markets. Widia also enhanced our technological base, diversified our product line and expanded our worldwide sales and distribution network. In 1995, Milacron implemented an integration plan to achieve certain synergies between Valenite and Widia worldwide. In 1998, we began managing the Valenite and Widia carbide insert and steel insert holder businesses on a global basis and with a new brand name, WidiaValenite. The benefits of common tooling brands include reduced design, manufacturing and marketing costs, higher inventory turnover, improved capacity utilization, and simultaneous product introductions around the world.

     We acquired Talbot in July, 1995, a major supplier of round high-speed steel taps and end mills. These cutting tools, which are not produced by either Valenite or Widia, are sold through independent distributors and a direct sales force. The Talbot acquisition enabled us to increase our product coverage from approximately 40% to 65% of the types of cutting tools consumed by the world market.

     In September, 1997, we acquired Minnesota Twist Drill, Inc., a manufacturer of standard high-speed steel drills which are sold mainly through private branding. Also, in June, 1997, we acquired Data Flute CNC, Inc., a manufacturer of high-performance solid carbide end mills. Both businesses, with sales of approximately $10 million each, have been integrated with Talbot.

     On December 30, 1998, we acquired Werkö, a manufacturer of high-speed steel drills and taps. Located in eastern Germany, Werkö has annual sales of approximately $25 million. We believe it is the third largest European producer of high-speed steel drills.

     In 1999, we acquired two additional businesses that have metalworking fluids as their primary products, thereby complementing our metalcutting tools and abrasives product offerings. In August, we acquired Producto Chemical, Inc. (Producto), which manufactures process cleaners, washers, corrosion inhibitors and specialty products for metalworking. Producto has annual sales approaching $5 million. In September, we acquired Oak International, Inc. (Oak), a supplier of lubricants and process cleaners used in metalforming and metalworking. Oak has two manufacturing plants in the U.S. and one in the U.K. and has annual sales approaching $12 million.

     Also in 1999, we acquired the respected Micro Carbide product line, which extended by 50% our capabilities and product offerings in the carbide round tool market. Micro Carbide tools, now produced at our Data Flute CNC facility, add carbide reamers, step drills and miniature tools to our product mix.

     In addition to our 1998 machine tool divestiture, in December, 1995 we sold our Electronic Systems Division (ESD). Milacron continues to develop and maintain our own applications software. The decision to sell ESD was made to redeploy assets to more strategic businesses.

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     Additionally, we sold our European plastics extrusion machinery business in December, 1999. Headquartered in Vienna, Austria, the business had sales to unaffiliated customers of approximately $62 million in 1999, principally to markets in Europe, Asia and South America. The business was sold to redeploy assets to more strategic businesses. We will continue to operate our North American extrusion machinery business, which is headquartered in southwest Ohio and serves markets in the U.S., Canada and Central America.

Cost Cutting and Efficiency Initiatives

     In December, 1999, we implemented a second plan to improve operating efficiency and reduce costs at additional businesses. The actions contemplated by the plan involve both segments’ operations in North America and Europe. The plan involves the closure of four smaller manufacturing facilities, the operations of which will be transferred to other locations, and the elimination of approximately 300 manufacturing and administrative positions worldwide. The total cost of the plan, which is expected to be completed by the end of 2000, will be approximately $21 million. Completion of the plan is expected to result in annual pretax cost savings of more than $20 million which will phase in during 2000 and be fully realized in 2001.

     The above actions are in addition to the cost reduction actions in prior years that are discussed above. We also reduced total selling and administrative expense from 17.9% of sales in 1998 to 16.8% in 1999.

Product Development and Capital Expenditures

     To enhance our research and development effort, we have maintained a major program for product development, process improvement and modernization. This program is named “Wolfpack” because of its emphasis on teamwork and fierce competitiveness. The objectives of Wolfpack are to design and produce new products at world-competitive levels of quality, performance, efficiency and cost. Substantially all of Milacron’s current plastics technologies machine designs have been developed using the Wolfpack methodology.

Plastics Technologies Business

     One of our strengths in the plastics machinery business is that we offer complete lines of machines for three major plastics processing technologies: injection molding and systems for extrusion and blow molding. Another strength is our presence in the durable goods market with the production of mold bases, standard components and supplies for the moldmaking industry. Milacron also sells specialty auxiliary equipment for plastics processing and rebuilds and retrofits older injection molding equipment manufactured by Milacron or others.

     We distribute most of our plastics machinery products through a combination of a direct sales force and independent agents who are geographically spread throughout our key markets. We sell our mold bases, supplies and components through a direct distribution network in the U.S. and Europe and through a large network of joint venture sales and service offices in Asia.

     Our plastics technologies businesses sell products primarily in North America and Europe. Approximately 15% of the group’s 1999 sales were to customers located in the eleven European countries which are participating in a new

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Plastics Technologies Industry

     Custom molders, which produce a wide variety of components for many industries, are a major group of plastics technologies customers. Other customer categories include the packaging, construction, consumer goods, automotive, electrical and medical supplies industries. Among the factors that affect the plastics technologies market are the health of the consumer economy, residential and commercial construction, automotive production and the introduction of new models in the automotive industry. Because of intense competition from international plastics technologies producers, currency exchange rates also have a significant impact. Fluctuations in the prices of petrochemical feed stocks for resin and the subsequent supply of resin may affect the businesses of our customers and, in turn, the markets for our products.

     Environmental concerns about plastics could slow the growth of the plastics technologies market. However, some plastics raw material suppliers, machinery makers and processors are developing methods of recycling to address environmental issues. We believe that environmental concerns have not had any discernible negative effect on the market to date. Nevertheless, Milacron, through its membership in the Society of Plastics Industry (an industry trade association) and this association’s affiliate, the American Plastics Council, is working with other leading companies within the plastics industry to address the role of plastics in the environment.

Milacron’s Plastics Technologies Business

     Injection Molding (Ferromatik Milacron). We believe Milacron is the largest U.S. producer of injection molding machines. Injection molding is the most common and versatile method of processing plastic, and it is used to make a wide variety of parts and products ranging from housewares and consumer goods to medical supplies and industrial components. Milacron manufactures many types of injection molding machines, almost all of which were developed using Wolfpack principles. Our injection molding machine line includes machines powered conventionally (with hydraulics) as well as ones that are driven by servo motors (fully electric). Product standardization (which facilitates part commonality) and the modernization of our manufacturing facilities and methods, as well as increased volumes, have enabled us to achieve significant economies of scale for the production of injection molding machines. We believe these factors have enabled Milacron to become the lowest-cost U.S. producer of these machines.

     In November, 1993, Milacron acquired Ferromatik, one of Europe’s leading producers of injection molding machines. Ferromatik is recognized for its high-end technology, including multi-color machines, multi-component systems and other specialty applications. The acquisition included the Ferromatik lines of hydraulic and electric injection molding machines and a modern manufacturing facility in Malterdingen, Germany, as well as Ferromatik’s marketing, sales and service network. This acquisition expanded our plastics processing technology base and product line and enabled us to achieve our objective of establishing a plastics machinery manufacturing and distribution base in Germany to serve Europe and other markets. Ferromatik has provided a complementary fit with Milacron’s other injection molding machine businesses.

     Shortly after the acquisition, we completed a restructuring of Ferromatik designed to derive synergies between Ferromatik and other Milacron operations and to improve Ferromatik’s operations through the implementation of manufacturing techniques and methods used in our U.S.

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     In May, 1995, Milacron announced the formation of a joint venture, Cincinnati Milacron Ltd. (CML), with a group of individuals experienced in the building of plastics machinery in Ahmedabad, India. This operation builds injection molding machines for domestic and world markets. In 1995, CML completed the implementation of its product introductions and opened sales offices in major cities of India. In 1998, CML completed construction of a new factory in Ahmedabad to support their operations.

     In 1997, Milacron formed a separate Elektron Technologies business unit to develop all-electric injection molding machines for world markets and to build and sell these machines in North America. Machine designs are also transferred to Ferromatik for manufacture and sale in Europe.

     In 1998, we opened a new manufacturing area for Elektron Technologies at our facilities in Cincinnati, Ohio. In connection with our program to reduce costs and increase operating efficiency, this business is being relocated to our principal U.S. plastics machinery plant near Cincinnati early in 2000.

     The Elektron Technologies business is charged with promoting our leading-edge technology in all-electric injection molding, which, when compared to hydraulic machines, provides lower cost of operation, better repeatability, and elimination of environmental issues associated with use of hydraulic oils. We believe we are extremely well positioned to lead the industry-wide shift to all-electric technology, which we believe will take place over this decade.

     In May, 1998, Milacron strengthened its market position in vertical insert injection molding machinery by acquiring Autojectors Inc. This Indiana-based operation is one of the largest producers of these machines used to make complex components for the medical, electrical and automotive industries, as well as multi-component items for the sports and leisure industry.

     Autojectors has excellent worldwide brand equity and offers customers a wide range of machines, a high percentage of which are customized for end users. Autojectors machines are sold under its own name as well as under the Milacron name. Autojectors also sells injection molding machines manufactured in India by CML to customers in North America.

     In 2000, the manufacture of Autojectors machines will be relocated to our principal U.S. plastics machinery plant near Cincinnati in connection with our plan to improve operating efficiency and reduce costs. The sales, service and engineering functions will remain at the current Autojectors facility in Indiana.

     Blow Molding Systems (Uniloy Milacron). Milacron is a major global player in blow molding, offering high-volume producers a wide range of plastic blow molding and structural foam and web solutions. Blow molding is the third-largest and fastest-growing segment of the plastics machinery market. Milacron manufactures and sells many types of systems used to make a wide variety of products, including rigid consumer packaging, industrial components, outdoor furniture, appliance parts, refuse and shipping containers, and toys. In September, 1998, Milacron acquired Uniloy, which is one of the largest worldwide producers of blow molding systems, from Johnson Controls, Inc. Uniloy serves three main blow molding markets: HDPE (high density polyethylene) packaging, PET (polyethylene terephthalate) packaging and industrial containers and components. Uniloy currently has a significant market share in HDPE and plans to greatly expand its presence in the PET market during the next few years. Uniloy machines produce containers for milk, juice, water and household chemicals, as well as pharmaceutical and personal care products; industrial components ranging from plastic drums and fuel tanks to plastic pallets; and home items from shutters, screen doors and furniture to dog houses and camping and boating equipment. Also known for aftermarket parts, services, molds and related tooling for blow molding, Uniloy has manufacturing facilities in North America and Europe.

     Uniloy greatly expanded our product offerings with reciprocating, rotary, shuttle, USB and IBS series for blow molding containers of all sizes, shapes and tolerances, as well as structural foam and web series for producing large industrial, construction and leisure parts. Milacron also gained a stronger European presence with the acquisition. As discussed above, in 1999, we implemented a plan to consolidate Uniloy’s European operations in a new facility to improve efficiency and reduce the overall cost structure.

     Consolidation in the dairy industry had a negative effect on Uniloy’s sales of HDPE systems for milk containers, Uniloy’s single largest market, during 1999. We expect the effects of this consolidation to continue through 2000.

     Extrusion Systems (ExtrusionTek Milacron). Milacron’s extrusion systems business consists of the manufacture, sale and distribution of individual extruders — both single-screw and twin-screw — and systems comprised of multiple units which are tooled to extrude a specific product in quantity. Such systems take longer to manufacture than

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     Mold Bases and Components (D-M-E). In January, 1996, Milacron acquired D-M-E, which we believe is the largest U.S. producer of mold bases, standard components and supplies for the moldmaking industry. D-M-E serves customers throughout much of the world with ten manufacturing facilities and several international joint venture operations. Like most of our plastics business, D-M-E serves the largest segment of the market, the injection molding process. D-M-E complements Milacron’s other businesses because it provides the mold bases, supplies and components used in the mold apparatus inside injection molding machines. We believe we are achieving synergies in a number of areas, including manufacturing processes, technology, marketing and distribution.

     In October, 1998, we acquired Master Unit Die Products, which we believe is the leading North American maker of quick-change insert mold bases for the plastics industry. These mold bases help OEM and custom molders achieve quicker production changeovers and lower labor and tooling costs for multiple mold programs. Master Unit Die has three frame and insert unit product lines, a quick-change adapter frame for standard mold bases, and a complete line of related components and accessories.

     In early 1998, Milacron acquired Northern Supply, a regional catalog distribution company. Northern Supply’s business is complementary to the catalog business of D-M-E and is being managed by D-M-E.

     In 1999, we acquired Nickerson, which also sells supplies and equipment for processing plastic through its catalog distribution centers in the U.S. and U.K. Nickerson also manufactures nozzles and screw tips in the U.S. and manufactures and refurbishes screws and barrels for small injection molding machines in the U.K. The addition of Nickerson strengthens Milacron’s aftermarket product offerings worldwide and expands our distribution channels in North America and Europe.

     Specialty Equipment. Milacron also sells a variety of specialty equipment used in the processing of plastics products, including peripheral auxiliary equipment such as material management systems, heat exchangers and product handling systems, all of which are manufactured by third parties to Milacron’s specifications. We also rebuild and retrofit older types of injection molding equipment manufactured by Milacron and others, refitting them with new controls and software.

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Production Facilities

(a)	The Berlin, Germany, Greenville, Michigan and McPherson, Kansas plants are leased from unrelated third parties.
(b)	These facilities will be closed in 2000 in connection with the consolidation of Uniloy’s European manufacturing and assembly operations.
(c)	This facility will be closed in 2000 in connection with our plan to improve operating efficiency and reduce costs.

Sales, Marketing and Customer Service

     Milacron’s service and parts organization, ServTek, provides a steady, dependable revenue stream and continues to grow worldwide. At ServTek, we supplement our own service technicians with a network of independent providers to provide 24-hour response and service across North and South America as well as in a growing number of European countries. Demonstrating our commitment to complete customer satisfaction, we will launch in June, 2000 an e-commerce website for around-the-clock service.

Competition

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Metalworking Technologies Business

     Our metalworking technologies businesses sell products primarily in North America, Europe and Asia. Approximately 27% of the segment’s 1999 sales were to customers located in the eleven European countries which are participating in a new common currency, the euro. To date, the introduction of the euro has not caused any material changes in our competitive position in the industry or the operation of the business. While the future impact of the euro is uncertain, management recognizes that we, along with our competitors, could experience adverse price realization over the longer term as a result of single currency pricing in those countries.

Metalworking Technologies Industry

Milacron’s Metalworking Technologies Business

     Valenite manufactures over 55,000 products, including an extensive line of cutting tool inserts in a wide variety of materials and geometries for turning, boring, milling and drilling, and standard and special steel insert holders. Valenite has an excellent market position in the automotive, off-road vehicle and truck industries and has strong market positions in carbide wear parts for metalforming and in products requiring the wear and corrosion-resistant properties of carbide.

     In February, 1995, Milacron acquired Widia, a major European metalcutting tool maker with key production facilities in Germany and other western European countries. Widia also owns a 51% interest in Widia (India) Ltd., an Indian public company. Widia’s product lines include carbide cutting tool inserts and steel insert holders needed for metalcutting operations, carbide wear parts used in forming and stamping metal, and both soft and permanent industrial magnets, used in automotive and other applications. Widia currently manufactures over 45,000 standard and special products.

     In 1995, Milacron initiated a $28 million plan to integrate certain Valenite and Widia operations, primarily in Europe and Japan. This plan involved the closing of two manufacturing plants, the downsizing of another plant, as well as the consolidation of numerous sales, customer service and warehousing operations in Europe and Japan. In total, the execution of the plan resulted in the elimination of over 370 production and administrative positions. In addition, a global management reorganization program began in 1998, as described on page 4.

     In 1998, we took additional steps to reduce staffing levels at Widia, which has resulted in further cost savings. These actions were made possible by plant modernization and improvements in manufacturing processes as well as the installation of integrated computer software at Widia’s European locations. Additional staffing reductions at both Widia and Valenite will result from the completion of our plan to improve operating efficiency and reduce costs that was announced in the fourth quarter of 1999 and which is discussed on page 5.

     In July, 1995, we acquired Talbot, a major supplier of round high-speed steel metalcutting tools. Talbot is the largest U.S. producer of end mills, as well as a leading tap

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     To further broaden our product coverage in the round metalworking tooling business, we made two smaller acquisitions in 1997: Minnesota Twist Drill, Inc., a manufacturer of standard high-speed steel drills in its Chisholm, Minnesota plant, and Data Flute CNC, Inc., a manufacturer of high-performance solid carbide end mills located in Pittsfield, Massachusetts. These acquisitions are highly complementary to our Valenite and Talbot product lines and broaden our already extensive product offerings in the marketplace. In 1998, we initiated a $15 million expansion program, which includes a second plant for Data Flute, a doubling of production capacity at Minnesota Twist Drill, and the expansion of a Talbot facility.

     In December 1998, we acquired Werkö, a German high-speed steel drill and tap producer, in order to enter the European market for round tools. Werkö also gives us a full line of high-speed steel drills in metric sizes and complements our inch-sized line.

     In 1999, we further expanded our product offerings for round metalworking tools by acquiring the Micro Carbide product line, which includes carbide reamers, step drills and miniature tools. Micro Carbide products are being produced at our Data Flute facility in Massachusetts.

     Metalworking Fluids. Metalworking fluids are proprietary chemical compounds and emulsions used as lubricants, coolants and corrosion inhibitors in a wide variety of metalcutting and metalforming operations. Major customers are producers of precision metal components for many industries, including manufacturers of automotive power trains and stamped parts, aerospace engines and bearings, as well as general metalworking shops. Milacron is a full-line supplier, offering water-based fluids (synthetics), water-based oil-bearing fluids (semi-synthetics) and oil-based fluids. Over the last five years, we have expanded our lines of soluble oils, base oils and synthetic fluids. Milacron has marketed these products under the Cimcool brand since the mid-1940s. With the acquisitions of Valenite and Widia, we developed two additional brands of fluids. In 1994, we introduced the Valcool brand, which is designed to work with all metalcutting tools and is being marketed through Valenite’s market channels. In 1996, we introduced the Widacool line of fluids in Europe, which we are selling through Widia’s market channels.

     In 1999, we made two strategic acquisitions to complement our existing metalworking fluids businesses. In August, we acquired Producto Chemicals, a full-line manufacturer of process cleaners, washers, corrosion inhibitors and specialty products for metalworking. Producto’s cleaners expand our product offerings and are being marketed through Milacron’s sales and distribution channels. In September, we acquired Oak International, a supplier of metalforming lubricants and process cleaners. The acquisitions of Producto and Oak fit our strategy of being the leading global supplier of consumable products for metalworking and significantly expand the markets we serve.

     Precision Grinding Wheels. Grinding wheels are rotating tools made of granular abrasive materials bonded together with vitreous or resin materials. They are used primarily by manufacturers in the metalworking industry. We believe that Milacron is the second-largest U.S. producer of grinding wheels. Major customers include manufacturers of automotive power trains, aerospace engines and bearings, as well as general metalworking machine shops. Milacron designs and manufactures a wide variety of precision abrasive grinding wheels, including resin-bonded, vitrified, cubic boron nitride (CBN), diamond and synthetic ceramic abrasive types.

     We believe, based on tests in our laboratories as well as in customer plants, that Milacron’s proprietary formulae, our modern production equipment and our techniques for manufacturing precision grinding wheels give us advantages in terms of product quality, lower production costs and faster deliveries. We believe that Milacron has also benefited from technologies common to both grinding wheels and metalcutting fluids. We have lowered our production costs, in part, by finishing some of our wheels on CNC (computer numeric control) machines designed and built by our former machine tools business.

     Carbide Wear Parts. Carbide wear parts represent various components made from sintered tungsten carbide having physical properties of extreme hardness and excellent wear and corrosion resistence. Valenite and Widia manufacture three types of carbide wear parts: tooling components for metalforming, carbide rod for use in round tools, and metalforming and general wear parts to resist frictional wear and chemical activity.

     Industrial Magnets. Widia is a leader in injection molded plastic bonded magnets. Widia manufactures permanent industrial magnets and magnetic circuits for automotive, electrical and other industrial applications, as well as soft magnets for the telecommunications and construction industries.

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Production Facilities

(a)	The Altenburg, Germany plant; Corby, England plant; Grenada, Mississippi plant; Livonia, Michigan plant; Gainesville, Texas plant; Königsee, Germany plant; Nogales, Mexico plant; Sinsheim, Germany plant; Valley View, Ohio plant; and three plants in Detroit, Michigan (metro area) are leased from unrelated third parties.

Sales, Marketing and Customer Service

     At the beginning of 1999, we launched MILPRO.com, a business-to-business commercial website for the metalworking industry offering customers more than 50,000 tools, fluids and abrasives. Our MILPRO initiative originally had as its primary focus the more than 100,000 small metalworking jobs shops in the U.S. However, we believe that electronic commerce has the potential to become a significant source of revenue from customers of all sizes — large and small — within three to five years.

Competition

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Patents

Employees

Backlog

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Segment Information

Financial data for the past three years for the company’s business segments are shown in the following tables.

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(a)	$6.7 million relates to the plastics technologies segment and $9.5 million relates to the metalworking technologies segment.
(b)	Relates to the plastics technologies segment.
(c)	Includes financing costs related to the sale of accounts receivable.
(d)	Segment assets consist principally of accounts receivable, inventories, goodwill and property, plant and equipment which are considered controllable assets for management reporting purposes.
(e)	Consists principally of corporate assets, nonconsolidated investments, certain intangible assets, cash surrender value of company-owned life insurance, prepaid expenses and deferred charges.

Geographic Information

     Sales of U.S. operations include export sales of $153.8 million in 1999, $136.3 million in 1998 and $113.1 million in 1997.

     Total sales of the company’s U.S. and non-U.S. operations to unaffiliated customers outside the U.S. were $720.1 million, $679.6 million and $684.2 million in 1999, 1998 and 1997, respectively.

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Executive Officers of the Registrant

The following information is included in accordance with the provisions for Part III, Item 10:

  Parenthetical figure below name of individual indicates age at most recent birthday prior to December 31, 1999.

  There are no family relationships among the executive officers of the Registrant.

  Officers of the company are elected each year by the Board of Directors.

(a)	James R. Christie succeeds Alan L. Shaffer, who resigned from the company in February, 2000.
(b)	William J. Gruber’s title was changed in February, 2000.
(c)	Hugh C. O’Donnell succeeds Wayne F. Taylor, who retired from the company in 1999.

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     The remaining information required by Item 2 is included in Part I on pages 9 and 12 of this Form 10-K.

Item 4.	Submission of Matters to a Vote of Security Holders

Item 5.	Market for the Registrant’s

     The following table shows the price range of the common shares for 1998 and 1999, as reported by the New York Stock Exchange. Cash dividends of $.12 per common share and $1.00 per Preferred share were paid in each quarter of 1998 and 1999.

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Results of Operations

Discontinued Operations

Acquisitions

     In August, 1999, we acquired Producto Chemical, Inc. (Producto), which manufactures process cleaners, washers, corrosion inhibitors and specialty products for metalworking. Producto had annual sales approaching $5 million as of the acquisition date.

     In September, 1999, we acquired Oak International, Inc. (Oak), a supplier of lubricants and process cleaners used in metalforming and metalworking. Oak has three manufacturing plants, including two in the U.S. and one in the U.K., and had annual sales approaching $12 million as of the acquisition date.

     In September, 1999, we acquired the Micro Carbide product line, which includes solid carbide reamers, step drills and miniature tools. These products are being produced by Data Flute CNC, which we acquired in 1997 and which also manufactures round solid-carbide metalworking tools.

     Of the businesses acquired in 1999, Nickerson is included in the plastics technologies segment while Producto, Oak and Micro Carbide are included in the metalworking technologies segment.

     In February, 1998, we acquired Wear Technology and Northern Supply. Wear Technology is a McPherson, Kansas company with annual sales of approximately $10 million as of the acquisition date which primarily serves the aftermarket for new and rebuilt twin screws for extrusion systems. Northern Supply, with annual sales of approximately $5 million, offers supplies to plastics processors for injection molding, blow molding and extrusion through distribution centers in Minneapolis, Minnesota and Charlotte, North Carolina.

     In May, 1998, we acquired Autojectors, Inc., a leading U.S. producer of vertical insert injection molding machinery widely used to make medical, electrical and automotive components. With annual sales of approximately $20 million as of the acquisition date, Autojectors has operated through two manufacturing facilities near Fort Wayne, Indiana. One of these plants was closed late in 1999 in connection with our recently announced program to improve operating efficiency (see Restructuring Costs).

     Effective September 30, 1998, we acquired Master Unit Die Products, Inc., a leading North American manufacturer of quick-change mold bases for the plastics industry. Master Unit Die Products had annual sales of approximately $10 million as of the acquisition date.

     Also on September 30, 1998, we acquired the assets of Uniloy, the plastics machinery division of Johnson Controls, Inc., for approximately $204 million. Uniloy, which is known for its Uniloy brand of equipment, as well as various other brands, had sales of more than $190 million for its fiscal year ending on September 30, 1998, and is one of the world’s leading providers of blow molding machines, as well as structural foam systems, aftermarket parts, services and molds for blow molding.

     On December 30, 1998, we acquired Werkzeugfabrik GmbH Königsee (Werkö), a manufacturer of high-speed steel drills and taps. Located in eastern Germany, Werkö had annual sales of approximately $25 million as of the acquisition date.

     With the exception of Werkö, all of the businesses purchased in 1998 are included in the plastics technologies segment from the respective dates of acquisition. Werkö is included in the metalworking technologies segment.

     In 1997, we acquired two businesses: Data Flute CNC in June and Minnesota Twist Drill in September. Both businesses are included in the metalworking technologies segment and had annual sales of approximately $10 million as of the respective acquisition dates.

     All of the acquisitions discussed above were financed through available cash and bank borrowings and have been accounted for under the purchase method of accounting.

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Presence Outside the U.S.

     Between December 31, 1998 and December 31, 1999, the euro weakened against the dollar by approximately 14%. This resulted in a $21 million reduction in consolidated shareholders’ equity due to unfavorable foreign translation adjustments.

     If the euro should weaken further against the dollar in future periods, we will once again experience a negative effect in translating our non-U.S. new orders, sales, and possibly, net earnings when compared to historical results.

1999 Compared to 1998

New Orders and Backlog

     Orders for plastics technologies products increased by $99 million, or 12%, to $897 million due to the effects of the 1998 and 1999 acquisitions which contributed an incremental $117 million in relation to 1998. Without the acquisitions and currency effects, the segment’s new orders were essentially flat. Orders for extrusion systems increased, particularly in the U.S., while orders for injection molding machines decreased worldwide for much of the year due to lower industrial production levels, higher resin prices and unfavorable currency effects. However, business levels began to improve in the fourth quarter.

     In the metalworking technologies segment, new orders were $712 million in 1999, which is essentially flat in relation to $714 million in 1998. Acquisitions contributed an incremental $31 million of orders while currency effects reduced orders by $12 million in relation to 1998. Orders for Widia metalcutting tools in Europe and grinding wheels in North America decreased. Orders for round tools increased due to the Werkö acquisition but were penalized by reduced demand in the U.S. due to softness in the aerospace market.

     Consolidated U.S. export orders were $149 million in 1999 representing a 10% increase from $135 million in 1998. Uniloy more than accounted for the increase as export orders for injection molding machines decreased.

     The company’s backlog of unfilled orders totaled $243 million at December 31, 1999. This compares to $247 million at December 31, 1998 and $196 million at December 27, 1997.

Sales

     In the plastics technologies segment, sales were $904 million, representing a $108 million, or 14%, increase in relation to 1998. The 1998 and 1999 acquisitions more than accounted for the increase in sales. Sales of injection molding machines decreased worldwide due in part to the aforementioned softness in worldwide markets, while sales of extrusion systems increased. Consolidation in the dairy industry had a negative effect on the sales of certain Uniloy products, a trend that we expect to continue through 2000.

     Sales of the metalworking technologies segment were $721 million compared to $718 million in 1998. Acquisitions contributed $28 million of incremental sales in 1999, while currency effects reduced reported sales by $14 million. Excluding these effects, sales decreased by $11 million, or 2%, due principally to reduced shipments of Widia products in Europe and round metalworking tools in North America.

     Consolidated export sales were $154 million in 1999 compared to $136 million in 1998. Uniloy more than accounted for the increase.

     Sales of both segments to non-U.S. markets totaled $720 million, an increase in 1999 of $41 million. In 1999 and 1998, products manufactured outside the U.S. approximated 40% and 41% of sales, respectively, while products sold outside the U.S. approximated 44% of sales in 1999 and 45% of sales in 1998.

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Margins, Costs and Expenses

     Total selling and administrative expense was essentially unchanged in amount in relation to 1998 but decreased significantly as a percentage of sales. Selling expense decreased in amount by $3 million despite higher sales volume due to aggressive cost reduction efforts. Administrative expense increased due to the inclusion of Uniloy and the other 1998 acquisitions but decreased as a percentage of sales.

     Other expense-net decreased from $12.9 million in 1998 to 10.0 million in 1999. The 1999 amount includes higher goodwill amortization expense due principally to the Uniloy acquisition. The net decrease resulted principally from the absence of severance expenses totaling approximately $6.7 million related to approximately 185 employees at Widia and at our extrusion machinery facility in Austria in 1998. These actions were made to adjust staffing levels to current sales projections and as a result of plant modernization and process improvements.

     Interest expense-net, including amortization of debt issuance costs, increased in 1999 due primarily to higher average debt levels to finance working capital requirements, acquisitions and the repurchase of common shares in early 1999 and late 1998.

Restructuring Costs

     In September, we announced a formal plan to consolidate Uniloy’s European blow molding operations in a new manufacturing facility located near Milan, Italy. At the time Uniloy was acquired, we recognized the need for improved efficiency within Uniloy’s European operations and immediately thereafter began to evaluate various options for the purpose of identifying the optimal long-term solution. Through that process, it was determined that three manufacturing plants located in Florence and Milan, Italy and Berlin, Germany would be closed and that the manufacturing and assembly operations at those plants would be consolidated into a more modern plant in Italy or transferred to another plant located in the Czech Republic. In the second quarter of 1999, we began to develop a detailed plan for the plant closures and consolidation, which was formally approved by management in August, 1999, and publicly announced in September, 1999.

     The total cost of the plan, which was implemented in the fourth quarter of 1999 and which is scheduled to be completed by September 30, 2000, is expected to be $6.7 million. Of this amount, $5.7 million is included in a reserve established in the allocation of the Uniloy acquisition cost. The remaining $1.0 million is being charged to expense as the related costs are incurred, including $.2 million in the fourth quarter of 1999. Charges against the $5.7 million reserve during the fourth quarter were $.7 million. Foreign currency exchange rate fluctuations since the acquisition date have had the effect of reducing the reserve by $.7 million.

     The total cash cost of the consolidation will be approximately $4 million, which is net of the expected proceeds from the sale of two facilities in Italy. The consolidation will not adversely affect future sales revenue and is expected to result in annual pretax cost savings of approximately $3 million, which will begin to phase-in during the first half of 2000.

     In December, we implemented a second plan to improve operating efficiency and reduce costs at additional businesses. The actions contemplated by the plan involve both segments’ operations in North America and Europe. The plan involves the closure of four smaller manufacturing facilities, the operations of which will be transferred to other locations, and the elimination of approximately 300 manufacturing and administrative positions worldwide. The total cost of implementing the plan is expected to be $20.8 million, including $16.0 million in 1999 and $4.8 million in 2000. Of the 1999 amount, $14.1 million is included in a reserve for employee termination benefits and facility exit costs that was recorded in the fourth quarter. Charges against this reserve through the end of the year totaled $.9 million. The total cost of the plan also includes 1999 charges of $1.7 million for supplemental early retirement benefits for certain employees that will be funded through pension plans and $5.0 million for additional costs that are being charged to expense as incurred. Of the latter amount, $.2 million was incurred in the fourth quarter of 1999.

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     The total cash cost of the plan, including capital expenditures of $2.5 million, is expected to be approximately $17.7 million, most of which will be expended in 2000. Completion of the plan is expected to result in annual pretax cost savings of more than $20 million, which will gradually phase-in during 2000 and be fully realized in 2001.

     As presented in the Consolidated Statement of Earnings for 1999, the line captioned “Restructuring costs” includes the following components:

     The status of the reserves for the two initiatives discussed above is summarized in the following table.

Divestiture of Business

Earnings From Continuing Operations Before Income Taxes and Minority Shareholders’ Interests

Income Taxes

     Milacron entered both 1999 and 1998 with sizable net operating loss (NOL) carryforwards in certain non-U.S. jurisdictions, along with valuation allowances against the NOL carryforwards and other deferred tax assets. We review valuation allowances periodically based on the relative amount of positive and negative evidence available at the time. This is done for the purpose of reaching conclusions regarding the future realization of deferred tax assets. Valuation allowances are then adjusted accordingly. The resulting decreases or increases in valuation allowances serve to favorably or unfavorably affect our effective tax rate.

     Our effective tax rate for 1999 was 27% compared to 26% in 1998. The rate for 1999 is lower than the U.S. federal statutory rate principally due to the adjustment of income tax reserves to more accurately reflect actual expected liabilities. These benefits were partially offset by the downward adjustment of the carrying value of our net deferred tax assets in Germany to a lower rate. Net adjustments of valuation allowances based on the process described above did not materially affect the 1999 effective tax rate but was the principal reason that the 1998 effective rate was less than the statutory rate.

     The effective tax rate for 2000 is expected to increase to within a range of approximately 30-33%. However, the tax rate will ultimately be contingent on the mix of earnings between tax jurisdictions and other factors that cannot be predicted with certainty at this time.

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Earnings from Continuing Operations

Discontinued Operations

Net Earnings

1998 Compared to 1997

New Orders and Backlog

     U.S. export orders were $135 million in 1998 representing a 34% increase from $101 million in 1997. Uniloy accounted for almost one third of the increase.

     The company’s backlog of unfilled orders totaled $247 million at December 31, 1998. This compares to $196 million at December 27, 1997, and $212 million at December 28, 1996.

Sales

     Export sales were $136 million in 1998 compared to $113 million in 1997. The 1998 amount includes $13 million for Uniloy.

     Sales of both segments to non-U.S. markets, including exports, totaled $680 million, a decrease in 1998 of $4 million. In 1998 and 1997, products manufactured outside the U.S. approximated 41% and 42% of sales, respectively, while products sold outside the U.S. approximated 45% and 48% of sales, respectively.

Margins, Costs and Expenses

     Total selling and administrative expense increased in amount in relation to 1997. However, these expenses decreased modestly in 1998 as a percentage of sales due to increased sales volume.

     Other expense-net, including amortization of goodwill, increased to $12.9 million in 1998 from $9.4 million in 1997. The 1998 amount includes severance expenses totaling approximately $6.7 million relating to approximately 185 employees at Widia, the company’s European cutting tool company, and at the company’s extrusion machinery facility in Austria, which was subsequently sold in 1999. As a result of these and other actions at Widia and in Austria, we achieved annualized pretax savings of approximately $8.0 million, which began to phase-in during the fourth quarter of 1998 for Widia and which phased-in during 1999 in Austria. The 1997 expense included severance expense of approximately $2.0 million relating to Ferromatik, the company’s German injection molding machine subsidiary. Annual cost savings from this and other cost reduction measures at Ferromatik are approximately $3.5 million.

     The severance actions at Widia and in Austria in 1998 and at Ferromatik in 1997 were made to adjust staffing levels based on sales projections and as a result of plant modernization and improvements in manufacturing processes at these locations. In addition, the installation of integrated computer software at Widia’s European operations made additional staffing reductions possible. Most of the positions eliminated were direct manufacturing and factory overhead positions, although some of the terminations occurred in sales support and administrative areas.

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     Interest expense-net, including amortization of debt issuance costs, increased in 1998 due primarily to higher average debt levels associated with acquisitions.

Earnings From Continuing Operations Before Income Taxes and Minority Shareholders’ Interests

Income Taxes

     Milacron entered both years with sizable net operating loss (NOL) carryforwards, along with valuation allowances in certain jurisdictions against the NOL carryforwards and other deferred tax assets. Valuation allowances are evaluated periodically and reversed when it is determined to be more likely than not that the related deferred tax assets will be realized. The reversal of these valuation allowances serves to reduce the effective tax rate. Valuation allowances subject to future reversal were $28 million at year-end 1998, including $13 million related to Werkö.

     The consolidated effective tax rate for 1998 was 26% compared to 19% in 1997, which in both cases is less than the U.S. federal statutory rate. The most significant factor in both years was the reversal of valuation allowances commensurate with our current expectations regarding the realization of net operating loss carryforwards.

Earnings from Continuing Operations

Discontinued Operations

Net Earnings

Year 2000

     Each of Milacron’s business units, as well as our corporate headquarters, was responsible for developing and executing comprehensive plans to minimize and, to the extent possible, eliminate any major business interruptions that could have been caused by the Y2K issue.

     Milacron’s Y2K effort focused primarily on three important elements: 1) I.T. systems; 2) non-I.T. equipment that includes embedded microprocessors; and 3) supplier and infrastructure preparedness.

     Milacron estimates that the incremental cost of major system implementations and remediation projects was approximately $14 million, including $10 million for newer, more-modern systems. These costs did not have a material effect on Milacron’s financial position, results of operations or cash flows.

     As a result of our planning and implementation efforts, we experienced no significant disruptions in mission-critical information technology and non-information technology systems. We are not aware of any material Y2K problems associated with our products or the products and services of third parties. We will, however, continue to monitor our mission-critical computer applications and the ability of our suppliers and vendors to provide uninterrupted service throughout the year 2000 to ensure that any potential Y2K matters that may arise are addressed promptly.

Market Risk

Foreign Currency Exchange Rate Risk

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Interest Rate Risk

Liquidity and Sources of Capital

     Operating activities provided $89 million of cash in 1999, compared with $84 million provided in 1998. The increase in cash provided resulted primarily from steps taken to better align production with demand and to improve inventory management.

     In 1999, investing activities resulted in a $39 million use of cash, due to capital expenditures of $47 million and acquisitions of $47 million, the effects of which were partially offset by the proceeds from the sale of the European extrusion business. In 1998, investing activities used $133 million of cash, including capital expenditures of $81 million and acquisitions of $228 million, including $190 million for Uniloy acquisition. In 1998, cash flows from investing activities benefited by $174 million from the sale of MTG.

     Financing activities used $16 million of cash in 1999, compared with $72 million of cash provided in 1998. Additional borrowings, net of repayments, provided $24 million of cash in 1999, while dividends and common share repurchases used $40 million of cash.

     In 1998, we announced a two million common share repurchase program, of which 1.2 million shares were repurchased through December 31, 1998. The remainder of shares were repurchased in the first quarter of 1999. Including shares repurchased to meet the current needs of management incentive plans and the repurchase of .2 million additional treasury shares in the fourth quarter, Milacron used $22 million of cash for share repurchases in 1999.

     In February, 2000, we announced that Milacron’s Board of Directors had authorized the repurchase up to four million additional common shares on the open market beginning in the first quarter of the year.

     As of December 31, 1999 and 1998, Milacron’s current ratio was 1.3.

     As of December 31, 1999, Milacron had lines of credit with various U.S. and non-U.S. banks of approximately $563 million, including a $375 million committed revolving credit facility. Under the provisions of the facility, our additional borrowing capacity totaled approximately $284 million at December 31, 1999.

     Total debt was $523 million at December 31, 1999, representing an increase of $2 million from December 31, 1998. Total shareholders’ equity was $491 million at December 31, 1999, an increase of $14 million from December 31, 1998. The increase resulted principally from net earnings of $71 million, which more than offset $21 million of unfavorable foreign currency translation adjustments, dividend payments and the effects of the share repurchase program. The ratio of total debt to total capital (debt plus equity) was 52% at December 31, 1999 and 1998. Substantially all of the proceeds from the sale of our European extrusion machinery business were used to repay borrowings under lines of credit early in 2000, which reduced the ratio of total debt to total capital to less than 50%.

     Our $100 million of 7 7/8% Notes are due on May 15, 2000. We are considering various alternatives to fund the repayment, including cash flow from operations, the issuance of long-term debt in the U.S. or European public markets or drawing on lines of credit. We believe that Milacron’s cash flow from operations and its currently available credit lines are sufficient to meet our operating, debt refinancing, share repurchase and capital requirements in 2000.

Outlook

     In the markets we serve, we are counting on only 2% economic growth on a global basis. However, we are introducing a number of new products and services, many of

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Cautionary Statement

•	global and regional economic conditions, consumer spending and industrial production, particularly in segments related to the level of automotive production and spending in the construction industry;
•	fluctuations in currency exchange rates of U.S. and foreign countries, including countries in Europe and Asia where Milacron has several principal manufacturing facilities and where many of our competitors and suppliers are based;
•	fluctuations in domestic and non-U.S. interest rates which affect the cost of borrowing under Milacron’s lines of credit and financing fees related to the sale of domestic accounts receivable;
•	production and pricing levels of important raw materials, including plastic resins, which are a key material used by purchasers of Milacron’s plastics technologies products, steel, cobalt, tungsten and industrial grains used in the production of metalworking products;
•	lower than anticipated levels of plant utilization resulting in production inefficiencies and higher costs, whether related to the delay of new product introductions, improved production processes or equipment, or labor relations issues;
•	any major disruption in production at key customer or supplier facilities;
•	alterations in trade conditions in and between the U.S. and non-U.S. countries where Milacron does business, including export duties, import controls, quotas and other trade barriers;
•	changes in tax, environmental and other laws and regulations in the U.S. and non-U.S. countries where Milacron does business;
•	unanticipated litigation, claims or assessments, including but not limited to claims or problems related to product liability, warranty or environmental issues.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

Item 8.   Financial Statements and Supplementary Data

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Responsibility for Financial Reporting

Financial Statements

Internal Control System

     The company assessed its internal control system as of December 31, 1999 in relation to criteria for effective internal control over the preparation of its published annual and quarterly financial statements described in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the company believes that, as of December 31, 1999, its system of internal control over the preparation of its published annual and quarterly financial statements and over the safeguarding of assets against unauthorized acquisition, use or disposition met those criteria.

February 7, 2000

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Consolidated Statements of Earnings

28

Consolidated Balance Sheets