See accompanying notes to Condensed Consolidated Financial Statements.

3

* Unaudited
** Condensed from audited financial statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

4

MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

See accompanying Notes to Condensed Consolidated Financial Statements.

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     The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with the rules and regulations of the United States Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for a fair presentation of the financial information for the periods indicated, have been included. The results for the three-month and six-month periods ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002.

     The following is a summary of inventories by major category:

     The following is a summary of long-term debt:

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     Basic earnings per share are based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share are based upon the weighted average number of common shares outstanding during the period assuming the issuance of common shares for all dilutive potential common shares outstanding. The following table sets forth the computation of basic and diluted earnings per share:

     The following are the components of comprehensive income:

     The components of accumulated other comprehensive loss, net of related tax, are as follows:

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     Segment information for the three months and six months ended June 30, 2002 and July 1, 2001 was as follows:

     The following is a schedule of amortization expense related to goodwill by segment:

     The carrying amount of goodwill by reportable segment as of June 30, 2002 and December 31, 2001 was as follows:

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     A reconciliation of the totals reported for the operating segments to the applicable line items in the condensed consolidated financial statements is as follows:

     On February 6, 2002, the Company acquired from J.M. Huber Corporation of Edison, New Jersey a facility in Hermalle-sous-Huy, Belgium. The facility is a merchant precipitated calcium carbonate plant, which has the capacity to produce approximately 60,000 tons of PCC annually. The Company acquired this facility to accelerate the development of its European coating PCC program. The purchase price was $10.2 million, which included acquisition costs and assumed liabilities. The terms of the acquisition also provide for additional consideration of $1.0 million to be paid if certain volumes of coating PCC are produced and shipped from this facility for any six consecutive months within five years following the acquisition. There were no amounts of the purchase price assigned to goodwill. The operations of this entity have been included in the Company's financial statements since the date of the acquisition.

     On April 26, 2002, the Company acquired the assets of Thermo Radiometrie Oy and all of the outstanding shares of Thermo Radiometrie K.K. (collectively, Radiometrie). Radiometrie develops and manufactures a refractory lining monitoring system used to measure and monitor ceramic refractory linings of steel converters and ladles. The purchase price was $1.4 million, which included acquisition costs and assumed liabilities. There were no amounts of the purchase price assigned to goodwill. The operations of this entity have been included in the Company's financial statements since the date of the acquisition.

     Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill and other intangible assets with indefinite lives will no longer be amortized, but instead reviewed for impairment at least annually in accordance with the provisions of SFAS No. 142. This statement also required an initial goodwill impairment assessment in the year of adoption. The Company completed the initial impairment analysis. The analysis did not result in an impairment charge.

     The carrying amount of goodwill was $44.7 million and $43.5 million as of June 30, 2002 and December 31, 2001, respectively. The net change in goodwill since January 1, 2002 was primarily attributable to the effects of foreign exchange rates.

     The following table reconciles previously reported net income as if the provisions of SFAS No. 142 had been in effect in 2001:

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     Acquired intangible assets subject to amortization as of June 30, 2002 and December 31, 2001 were as follows:

     The weighted average amortization period for acquired intangible assets subject to amortization is approximately 16 years. Estimated amortization expense is $0.4 million for each of the next five years through 2007.

     The Company accounts for impairment of long-lived assets in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 establishes a uniform accounting model for long-lived assets to be disposed of. This Statement also requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the first quarter of 2002, the Company recorded a write-down of impaired assets of $750,000 for a precipitated calcium carbonate plant at a paper mill that has ceased operations. Such charge is included in cost of goods sold for the first six months.

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The Board of Directors and Shareholders
Minerals Technologies Inc.:

     We have reviewed the condensed consolidated balance sheet of Minerals Technologies Inc. and subsidiary companies as of June 30, 2002 and the related condensed consolidated statements of income and cash flows for the three-month and six-month periods ended June 30, 2002 and July 1, 2001. These financial statements are the responsibility of the company's management.

     We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

     Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

     As discussed in Note 8 to the condensed consolidated financial statements, effective January 1, 2002, the Company adopted the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets."

     We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Minerals Technologies Inc. and subsidiary companies as of December 31, 2001, and the related consolidated statements of income, shareholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 22, 2002, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2001 is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

                                                                                               KPMG LLP

New York, New York
July 18, 2002

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     Net sales in the second quarter of 2002 increased 9.4% to $186.8 million from $170.7 million in the second quarter of 2001.

    Net sales in the Specialty Minerals segment, which includes the Precipitated Calcium Carbonate ("PCC") and Processed Minerals product lines, increased 5.9% in the second quarter of 2002 to $127.7 million from $120.6 million in the prior year.

    Worldwide net sales of PCC, which is used primarily in the manufacturing process of the paper industry, increased 5.8% to $103.3 million from $97.6 million in the second quarter of 2001. Sales volume for PCC used for filling and coating paper increased 7%. This increase was primarily due to the ramp-up of the ten new units of precipitated calcium carbonate capacity that were added in 2001. A unit represents approximately 30,000 tons of annual PCC production. Five of the additional units came from two new satellite plants the Company constructed, one at Great Northern Paper Inc. in Millinocket, Maine, and the other at a paper mill owned by M-real Corporation at Alizay, France. The remaining five units came from expansions at existing satellite PCC plants.

     Net sales of the Specialty PCC product line, used in non-paper applications, declined 5.6% from the prior year. This decline was attributable primarily to continued weak industry conditions and a more competitive environment in the calcium supplement market.

     Net sales of Processed Minerals products increased 6.1% in the second quarter to $24.4 million from $23.0 million in the same period the prior year.

     Net sales in the Refractories segment increased 18.0% to $59.1 million as compared with $50.1 million in the prior year. The increase in sales was the result of two acquisitions in 2001, the refractory business of Martin Marietta Magnesia Specialties, acquired in the second quarter of 2001, and Rijnstaal B.V., a Netherlands-based producer of cored metal wires used mainly in the steel and foundry industries, acquired in the third quarter of 2001.

     Net sales in the United States in the second quarter of 2002 increased approximately 7% as compared with the second quarter of 2001. This increase was primarily due to higher sales in the Refractories segment as a result of the aforementioned acquisitions. Foreign sales increased approximately 13% in the second quarter of 2002 primarily due to increased sales in the Refractories segment, particularly in Europe.

     Cost of goods sold was 75.3% of sales compared with 73.3% in the prior year. An increase in cost of goods sold occurred in both reporting segments. Cost of goods sold for the Specialty Minerals segment increased primarily as a result of development activities for coating-grade PCC associated with the acquisition of a PCC plant in Belgium, costs associated with the start-up of the Company's PCC plant in Alizay, France, and an increase in trial activity related to the production of Synsil^® products. Cost of goods sold for the Refractories segment increased due to 

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changes in the product mix as a result of the acquisitions and increased development costs associated with new products and systems. In addition, steel plant closures in North America continued to have an adverse effect on cost of sales.

     Marketing and administrative costs were approximately 10.4% of sales compared with 11.0% of sales in the prior year. Although the Company's sales and marketing staff increased as a result of the recent acquisitions, these costs were largely offset by the benefits of the prior year's restructuring.

     Income from operations increased 22.1% to $21.0 million, as compared with $17.2 million for the same period last year. Excluding the restructuring charge recorded in the second quarter of 2001, operating income increased 2%. There was no amortization related to goodwill in the second quarter of 2002. Amortization related to goodwill was $0.4 million in the second quarter of 2001. Excluding the prior year's restructuring charge, operating income in the Specialty Minerals segment increased 5.2% to $15.6 million and represented 12.2% of its net sales. The Refractories segment's operating income, excluding the prior year's restructuring charge, decreased 6.6% to $5.4 million and was 9.1% of its net sales.

     Non-operating deductions decreased due to lower interest rates and lower average borrowings.

     Net income increased 35.4% to $14.0 million from $10.3 million in the prior year. Diluted earnings per share were $0.67 in the second quarter of 2002 as compared with $0.52 in the prior year.

     On April 26, 2002, the Company acquired the assets of Thermo Radiometrie Oy and all of the outstanding shares of Thermo Radiometrie K.K. (collectively, "Radiometrie"). The purchase price was $1.4 million, which included acquisition costs and assumed liabilities. Radiometrie develops and manufactures a refractory lining monitoring system used to measure and monitor ceramic refractory linings of steel converters and ladles.

     Several consolidations in the paper industry have taken place in recent years. Such consolidations concentrate purchasing power in the hands of a smaller number of papermakers, enabling them to increase pressure on suppliers. This increased pressure could have an adverse effect on the Company's results of operations in the future. In addition, these consolidations could result in partial or total closure of some paper mills at which the Company operates PCC satellites. In particular, the Company's largest customer, International Paper Company ("IP"), decided during 2000 to reduce production capacity by closing four paper mills at which the Company has satellite PCC plants. These closed mills are located in Mobile, Alabama; Lock Haven, Pennsylvania; Erie, Pennsylvania; and Oswego, New York. Sales to IP represented approximately 11.5% and 11.9% of consolidated net sales for the three-month and six-month periods ended June 30, 2002, respectively. In addition, during 2000 two paper companies filed for bankruptcy protection and closed their paper mills in Plainwell, Michigan and Anderson, California, at which the Company had satellite PCC plants.

     Excluding the aforementioned plants that have been closed, there are two satellite locations at which contracts with host mills have recently expired, although the Company continues to supply PCC at these locations. At one of these locations the Company hopes to reach agreement on a long-term extension of the contract; however, there can be no assurance that these negotiations will be successful. At the other location the customer, IP, has informed the Company that it intends to begin negotiations with alternative suppliers. The Company continues to supply PCC at this location, and expects to continue to do so through 2003. IP has also informed the Company at the end of the second quarter that it will honor all existing satellite contracts; however, it expects to negotiate with other suppliers at other satellite locations as the contracts for those locations expire over the next several years, with the last contract expiring in 2010. That decision by IP increases the risk that some or all of these contracts will not be renewed. The loss of a substantial amount of the Company's sales to IP would have a material effect on the Company's results of operations and projected growth rate; however, because these contracts have various remaining terms, the full impact would not be felt for several years.

     In recognition of this increased risk, the Company has shortened the periods over which existing satellite plants at IP mills are depreciated. The shortened depreciation schedule will reduce diluted earnings per share by approximately $0.04 per share for the second half of 2002, $0.08 per share in 2003, 2004 and 2005, and $0.04 per share in 2006.

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     Net sales in the first half of 2002 increased 9.3% to $365.8 million from $334.7 million in 2001.

     Net sales in the Specialty Minerals segment increased 4.4% in the first half of 2002 to $252.0 million from $241.3 million in the same period in 2001. Worldwide net sales in the PCC product line grew 4.5% to $206.2 million for the first six months of 2002. Net sales in the Processed Minerals product line increased 4.1% to $45.8 million in the first half of 2002 from $44.0 million in the prior year.

     On February 6, 2002, the Company purchased from the J.M. Huber Corporation of Edison, New Jersey a PCC manufacturing facility in Hermalle-sous-Huy, Belgium for approximately $10.2 million. The acquisition of this merchant PCC plant, which has the capacity to produce approximately 60,000 tons of PCC per year, will allow the Company to accelerate its European coating PCC program.

     Net sales in the Refractories segment increased 21.8% to $113.8 million as compared with $93.4 million in the prior year. This increase was attributable to the recent acquisitions in this segment.

     Income from operations increased 15.7% to $42.4 million from $36.7 million in the first half of 2001. Excluding the restructuring charge, operating income increased 5.9% in the first six months of 2002. Income from operations in the Specialty Minerals segment, excluding the prior year's restructuring charge, increased 7.4% to $30.8 million and was 12.2% of its net sales. Income from operations in the Refractories segment, excluding the prior year's restructuring charge, increased 2.2% to $11.6 million and was 10.2% of its net sales.

     Non-operating deductions decreased due to lower net interest expense as a result of decreased borrowings and lower interest rates.

     The Company's effective tax rate for 2002 was approximately 28.5%, compared with 30.0% in the prior year. The change in the effective tax rate reflects differences in the expected geographic mix of profit by country for the year.

     Net income increased 25.2% to $27.5 million from $22.0 million in 2001. Diluted earnings per common share increased 21% to $1.33 compared with $1.10 for the first six months of 2001.

     Cash flows in the first half of 2002 were provided from operations and proceeds from stock option exercises and were applied principally to fund capital expenditures, to fund the aforementioned acquisitions, and to repay short-term debt. Cash provided from operating activities amounted to $54.7 million in the first half of 2002 as compared with $42.6 million in the first half of the prior year. This increase was primarily attributable to higher net income and an increase in non-cash items.

     The Company has available approximately $110 million in uncommitted, short-term bank credit lines, of which $30 million was in use at June 30, 2002. The Company anticipates that capital expenditures, including acquisitions, for all of 2002 will approximate $70 million. The Company expects to meet its financing requirements from internally generated funds, the uncommitted bank credit lines and, where appropriate, project financing of certain satellite plants.