##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q

|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended June 30,
    2002.                                               
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                                 

Commission file number 1-4682

Thomas & Betts Corporation

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Tennessee                                                          |  | 22-1326940                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)
|                                                                  
|8155 T&B Boulevard, Memphis,
    Tennessee                         |  | 38125                                   
|(Address of principal executive
    offices)                       |  | (Zip Code)                              

(901) 252-8000

(Registrants telephone number, including
area code)


Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by
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 þ     No o

Indicate the number of shares outstanding of each
of the issuers classes of common stock, as of the latest
practicable date.

|                             |  |              |            | 
|---------------------------- |  | ------------ | ---------- | 
|                             |  | Outstanding 
|                             |  | Shares      
|                             |  | at August 9,
|Title of Each Class          |  | 2002        
|                             |  |             
|Common Stock, $.10 par value |  |              | 58,298,434 | 



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TABLE OF CONTENTS



|                                                   |                                                                                               |                                                                  |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                     
|                                                   | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                                                   |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 
|                                                   |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                           
|                                                   |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|                                                   |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|                                                   | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|Segment Results                                   
|                                                   | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II. OTHER INFORMATION                        
|                                                   | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                                                   | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                   | ITEM 5. OTHER INFORMATION                                                                    
|                                                   | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|Ex-10.1 2nd Amendment to Credit and Security Agmt 
|EX-10.2 1st Amendment to Receivables Purchase Agmt
|EX-10.3 2nd Amendment to Receivables Purchase Agmt
|EX-12 Computation of Ratio of Earnings            
|EX-99.1 Certification of Chief Executive Officer  
|EX-99.2 Certification of Chief Financial Officer  



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES

TABLE OF CONTENTS

|                              |  |                                                                                           |                                                                                                                              |      |    |   | 
|----------------------------- |  | ----------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------- | ---- | -- | - | 
|                              |  |                                                                                           |                                                                                                                              | Page
|                              |  |                                                                                           |                                                                                                                              |     
|PART I. FINANCIAL INFORMATION |  |                                                                                           |                                                                                                                              |     
|ITEM 1.                       |  | Financial Statements:                                                                     |                                                                                                                              |      |    |  
|                              |  |                                                                                           | Condensed Consolidated Statements of Operations
    for the Quarters and Six Months Ended June 30, 2002 and
    July 1, 2001 |      |    | 2 | 
|                              |  |                                                                                           | Condensed Consolidated Balance Sheets as of
    June 30, 2002 and December 30, 2001                                          |      |    | 3 | 
|                              |  |                                                                                           | Condensed Consolidated Statements of Cash Flows
    for the Six Months Ended June 30, 2002 and July 1, 2001                  |      |    | 4 | 
|                              |  |                                                                                           | Notes to Condensed Consolidated Financial
    Statements                                                                     |      |    | 5 | 
|ITEM 2.                       |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |                                                                                                                              |      | 15 |  
|ITEM 3.                       |  | Quantitative and Qualitative Disclosures About
    Market Risk                            |                                                                                                                              |      | 24 |  
|PART II. OTHER INFORMATION    |  |                                                                                           |                                                                                                                              |     
|ITEM 1.                       |  | Legal Proceedings                                                                         |                                                                                                                              |      | 24 |  
|ITEM 4.                       |  | Submission of Matters to a Vote of Security
    Holders                                   |                                                                                                                              |      | 25 |  
|ITEM 5.                       |  | Other Information                                                                         |                                                                                                                              |      | 25 |  
|ITEM 6.                       |  | Exhibits and Reports on Form 8-K                                                          |                                                                                                                              |      | 25 |  

1



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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1.     FINANCIAL
STATEMENTS

THOMAS & BETTS CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


(In thousands, except per share
data)


(Unaudited)


|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |         |  
|------------------------------------------------------------------------ | ---------------------------------------------------------------------- | ------------- | ------- | ---------------- | - | -------- | ------- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                                         |                                                                        |               |         |                 
|                                                                         |                                                                        | Quarter Ended |         | Six Months Ended
|                                                                         |                                                                        |               |         |                 
|                                                                         |                                                                        | June 30,      |         | July 1,          |   | June 30, |         | July 1,
|                                                                         |                                                                        | 2002          |         | 2001             |   | 2002     |         | 2001   
|                                                                         |                                                                        |               |         |                  |   |          |         |        
|Net sales                                                                |                                                                        | $             | 341,279 |                  |   | $        | 385,444 |         |   | $ | 683,330 |         |   | $ | 782,392 |        
|Cost of sales                                                            |                                                                        |               | 263,780 |                  |   |          | 292,112 |         |   |   | 522,052 |         |   |   | 597,175 |        
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|                                                                         | Gross margin                                                           |               |         | 77,499           |   |          |         | 93,332  |   |   |         | 161,278 |   |   |         | 185,217 |  
|Selling, general and administrative                                      |                                                                        |               | 73,809  |                  |   |          | 88,577  |         |   |   | 146,405 |         |   |   | 181,607 |        
|Provision  restructured operations                                      |                                                                        |               | 361     |                  |   |          |        |         |   |   | 1,626   |         |   |   |        |        
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|                                                                         | Earnings from operations                                               |               |         | 3,329            |   |          |         | 4,755   |   |   |         | 13,247  |   |   |         | 3,610   |  
|Income from unconsolidated companies                                     |                                                                        |               | 398     |                  |   |          | 245     |         |   |   | 1,100   |         |   |   | 3,679   |        
|Interest expense  net                                                   |                                                                        |               | (7,581  | )                |   |          | (10,529 | )       |   |   | (18,480 | )       |   |   | (20,498 | )      
|Other (expense) income  net                                             |                                                                        |               | 1,200   |                  |   |          | (2,246  | )       |   |   | 441     |         |   |   | (1,763  | )      
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|                                                                         | Loss before income taxes                                               |               |         | (2,654           | ) |          |         | (7,775  | ) |   |         | (3,692  | ) |   |         | (14,972 | )
|Income tax provision (benefit)                                           |                                                                        |               | (3,023  | )                |   |          | (2,410  | )       |   |   | 7,586   |         |   |   | (4,641  | )      
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|                                                                         | Net income (loss) before cumulative effect of an
    accounting change |               |         | 369              |   |          |         | (5,365  | ) |   |         | (11,278 | ) |   |         | (10,331 | )
|Cumulative effect of an accounting change                                |                                                                        |               |        |                  |   |          |        |         |   |   | (44,815 | )       |   |   |        |        
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Net earnings (loss)                                                      |                                                                        | $             | 369     |                  |   | $        | (5,365  | )       |   | $ | (56,093 | )       |   | $ | (10,331 | )      
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Basic earnings(loss) per share:                                          |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Net earnings (loss) before cumulative effect of
    an accounting change |                                                                        | $             | 0.01    |                  |   | $        | (0.09   | )       |   | $ | (0.19   | )       |   | $ | (0.18   | )      
|Cumulative effect of an accounting change                                |                                                                        |               |        |                  |   |          |        |         |   |   | (0.77   | )       |   |   |        |        
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Net earnings (loss)                                                      |                                                                        | $             | 0.01    |                  |   | $        | (0.09   | )       |   | $ | (0.96   | )       |   | $ | (0.18   | )      
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Diluted earnings (loss) per share:                                       |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Net earnings (loss) before cumulative effect of
    an accounting change |                                                                        | $             | 0.01    |                  |   | $        | (0.09   | )       |   | $ | (0.19   | )       |   | $ | (0.18   | )      
|Cumulative effect of an accounting change                                |                                                                        |               |        |                  |   |          |        |         |   |   | (0.77   | )       |   |   |        |        
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Net earnings (loss)                                                      |                                                                        | $             | 0.01    |                  |   | $        | (0.09   | )       |   | $ | (0.96   | )       |   | $ | (0.18   | )      
|                                                                         |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|Average shares outstanding:                                              |                                                                        |               |         |                  |   |          |         |         |   |   |         |         |   |   |         |        
|                                                                         | Basic                                                                  |               |         | 58,292           |   |          |         | 58,149  |   |   |         | 58,253  |   |   |         | 58,086  |  
|                                                                         | Diluted                                                                |               |         | 58,459           |   |          |         | 58,149  |   |   |         | 58,253  |   |   |         | 58,086  |  

The accompanying Notes are an integral part of
these Condensed Consolidated Financial Statements.

2



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED BALANCE
SHEETS


(In thousands)


(Unaudited)


|                                           |                                        |                 |           |              |        |   |           |          |         | 
|------------------------------------------ | -------------------------------------- | --------------- | --------- | ------------ | ------ | - | --------- | -------- | ------- | 
|                                           |                                        | June 30,        |           | December 30,
|                                           |                                        | 2002            |           | 2001        
|                                           |                                        |                 |           |             
|ASSETS                                    
|Current Assets                             |                                        |                 |           |              |        |   |           |         
|                                           | Cash and cash equivalents              |                 | $         | 205,574      |        |   | $         | 234,843  |        
|                                           | Marketable securities                  |                 |           | 48,433       |        |   |           | 6,982    |        
|                                           | Receivables  net                      |                 |           | 195,141      |        |   |           | 188,160  |        
|                                           | Inventories:                           |                 |           |              |        |   |           |          |        
|                                           |                                        | Finished goods  |           |              | 92,034 |   |           |          | 103,450 | 
|                                           |                                        | Work-in-process |           |              | 25,188 |   |           |          | 23,839  | 
|                                           |                                        | Raw materials   |           |              | 68,960 |   |           |          | 64,790  | 
|                                           |                                        |                 |           |              |        |   |           |         
|                                           | Total inventories                      |                 |           | 186,182      |        |   |           | 192,079  |        
|                                           |                                        |                 |           |              |        |   |           |         
|                                           | Deferred income taxes                  |                 |           | 72,615       |        |   |           | 79,821   |        
|                                           | Income tax receivables                 |                 |           | 19,127       |        |   |           | 5,779    |        
|                                           | Prepaid expenses                       |                 |           | 11,751       |        |   |           | 13,222   |        
|                                           | Assets held for sale                   |                 |           | 43,416       |        |   |           | 49,417   |        
|                                           |                                        |                 |           |              |        |   |           |         
|Total Current Assets                       |                                        |                 | 782,239   |              |        |   | 770,303   |         
|                                           |                                        |                 |           |              |        |   |           |         
|Property, plant and equipment              |                                        |                 | 694,408   |              |        |   | 690,319   |         
|                                           | Less accumulated depreciation          |                 |           | (394,117     | )      |   |           | (381,239 | )      
|                                           |                                        |                 |           |              |        |   |           |         
|Net property, plant and equipment          |                                        |                 | 300,291   |              |        |   | 309,080   |         
|                                           |                                        |                 |           |              |        |   |           |         
|Goodwill  net                             |                                        |                 | 434,035   |              |        |   | 473,871   |         
|Investments in unconsolidated companies    |                                        |                 | 121,301   |              |        |   | 121,735   |         
|Deferred income taxes                      |                                        |                 | 2,119     |              |        |   | 50,148    |         
|Other assets                               |                                        |                 | 31,044    |              |        |   | 36,473    |         
|                                           |                                        |                 |           |              |        |   |           |         
|Total Assets                               |                                        | $               | 1,671,029 |              |        | $ | 1,761,610 |         
|                                           |                                        |                 |           |              |        |   |           |         
|                                          
|LIABILITIES AND SHAREHOLDERS
    EQUITY  
|Current Liabilities                        |                                        |                 |           |              |        |   |           |         
|                                           | Current maturities of long-term debt   |                 | $         | 110,742      |        |   | $         | 54,002   |        
|                                           | Accounts payable                       |                 |           | 125,451      |        |   |           | 120,688  |        
|                                           | Accrued liabilities                    |                 |           | 127,760      |        |   |           | 176,959  |        
|                                           | Income taxes payable                   |                 |           | 5,629        |        |   |           | 4,060    |        
|                                           |                                        |                 |           |              |        |   |           |         
|Total Current Liabilities                  |                                        |                 | 369,582   |              |        |   | 355,709   |         
|                                           |                                        |                 |           |              |        |   |           |         
|Long-Term Liabilities                      |                                        |                 |           |              |        |   |           |         
|                                           | Long-term debt                         |                 |           | 557,807      |        |   |           | 618,035  |        
|                                           | Other long-term liabilities            |                 |           | 104,364      |        |   |           | 104,581  |        
|Shareholders Equity                       |                                        |                 |           |              |        |   |           |         
|                                           | Common stock                           |                 |           | 5,830        |        |   |           | 5,816    |        
|                                           | Additional paid-in capital             |                 |           | 342,911      |        |   |           | 340,265  |        
|                                           | Retained earnings                      |                 |           | 391,109      |        |   |           | 447,202  |        
|                                           | Unearned compensation-restricted stock |                 |           | (4,073       | )      |   |           | (2,831   | )      
|                                           | Accumulated other comprehensive income |                 |           | (96,501      | )      |   |           | (107,167 | )      
|                                           |                                        |                 |           |              |        |   |           |         
|Total Shareholders Equity                 |                                        |                 | 639,276   |              |        |   | 683,285   |         
|                                           |                                        |                 |           |              |        |   |           |         
|Total Liabilities and Shareholders Equity |                                        | $               | 1,671,029 |              |        | $ | 1,761,610 |         
|                                           |                                        |                 |           |              |        |   |           |         

The accompanying Notes are an integral part of
these Condensed Consolidated Financial Statements.

3



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES






CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


(In thousands)


(Unaudited)


|                                                                 |                                                                       |                                   |         |         |         |   |         |         |         |  
|---------------------------------------------------------------- | --------------------------------------------------------------------- | --------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                                                 |                                                                       |                                  
|                                                                 |                                                                       | Six Months Ended                 
|                                                                 |                                                                       |                                  
|                                                                 |                                                                       | June 30,                          |         | July 1,
|                                                                 |                                                                       | 2002                              |         | 2001   
|                                                                 |                                                                       |                                   |         |        
|Cash Flows from Operating Activities:                            |                                                                       |                                   |         |         |         |   |         |        
|Net loss                                                         |                                                                       | $                                 | (56,093 | )       |         | $ | (10,331 | )      
|                                                                 | Cumulative effect of an accounting change                             |                                   |         | 44,815  |         |   |         |        |        
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Net loss before cumulative effective of an
    accounting change |                                                                       |                                   | (11,278 | )       |         |   | (10,331 | )      
|Adjustments:                                                     |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Depreciation and amortization                                         |                                   |         | 26,269  |         |   |         | 40,923  |        
|                                                                 | Provision  restructured operations                                   |                                   |         | 1,626   |         |   |         |        |        
|                                                                 | Undistributed earnings from unconsolidated
    companies              |                                   |         | (1,100  | )       |   |         | (3,679  | )      
|                                                                 | Mark-to-market adjustment for derivative
    instruments              |                                   |         | (981    | )       |   |         | 1,726   |        
|                                                                 | (Gain) loss on sale of property, plant and
    equipment              |                                   |         | (998    | )       |   |         | 98      |        
|                                                                 | Deferred income taxes                                                 |                                   |         | 55,058  |         |   |         | 37,021  |        
|                                                                 | Changes in operating assets and
    liabilities  net:                |                                   |         |         |         |   |         |         |        
|                                                                 |                                                                       | Receivables                       |         |         | (2,060  | ) |         |         | 58,457  |  
|                                                                 |                                                                       | Inventories                       |         |         | 15,533  |   |         |         | 11,742  |  
|                                                                 |                                                                       | Accounts payable                  |         |         | 2,707   |   |         |         | (17,411 | )
|                                                                 |                                                                       | Accrued liabilities               |         |         | (31,559 | ) |         |         | (28,980 | )
|                                                                 |                                                                       | Accrued litigation                |         |         | (20,000 | ) |         |         |        |  
|                                                                 |                                                                       | Income taxes payable (receivable) |         |         | (11,796 | ) |         |         | (55,886 | )
|                                                                 |                                                                       | Other                             |         |         | 5,060   |   |         |         | (32     | )
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Net cash provided by operating activities                        |                                                                       |                                   | 26,481  |         |         |   | 33,648  |        
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Cash Flows from Investing Activities:                            |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Purchases of property, plant and equipment                            |                                   |         | (11,903 | )       |   |         | (19,319 | )      
|                                                                 | Proceeds from sale of property, plant and
    equipment               |                                   |         | 1,726   |         |   |         |        |        
|                                                                 | Proceeds from divestitures of businesses                              |                                   |         |        |         |   |         | 6,000   |        
|                                                                 | Marketable securities acquired                                        |                                   |         | (43,275 | )       |   |         |        |        
|                                                                 | Proceeds from matured marketable securities                           |                                   |         | 1,976   |         |   |         | 750     |        
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Net cash used in investing activities                            |                                                                       |                                   | (51,476 | )       |         |   | (12,569 | )      
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Cash Flows from Financing Activities:                            |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Decrease in borrowings with original maturities
    less than 90 days |                                   |         |        |         |   |         | (16,347 | )      
|                                                                 | Repayment of long-term debt and other borrowings                      |                                   |         | (7,976  | )       |   |         | (4,142  | )      
|                                                                 | Stock options exercised                                               |                                   |         | 248     |         |   |         |        |        
|                                                                 | Cash dividends paid                                                   |                                   |         |        |         |   |         | (32,484 | )      
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Net cash used in financing activities                            |                                                                       |                                   | (7,728  | )       |         |   | (52,973 | )      
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|Effect of exchange-rate changes on cash                          |                                                                       |                                   | 3,454   |         |         |   | (2,189  | )      
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Net decrease in cash and cash equivalents                             |                                   |         | (29,269 | )       |   |         | (34,083 | )      
|                                                                 | Cash and cash equivalents  beginning
    of period                   |                                   |         | 234,843 |         |   |         | 207,331 |        
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Cash and cash equivalents  end of
    period                         |                                   | $       | 205,574 |         |   | $       | 173,248 |        
|                                                                 |                                                                       |                                   |         |         |         |   |         |        
|                                                                 | Cash payments for interest                                            |                                   | $       | 23,488  |         |   | $       | 24,324  |        
|                                                                 | Cash payments (refunds) for income taxes                              |                                   | $       | (39,400 | )       |   | $       | 14,903  |        

The accompanying Notes are an integral part of
these Condensed Consolidated Financial Statements.

4



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES






NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)


1.     Basis of
Presentation

In the opinion of management, the accompanying
condensed consolidated financial statements contain all
adjustments necessary for the fair presentation of the financial
position as of June 30, 2002 and December 30, 2001 and
the results of operations and cash flows for the periods ended
June 30, 2002 and July 1, 2001.

Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United
States of America (GAAP) have been condensed or omitted. These
condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Corporations Annual Report on
Form 10-K for the fiscal period ended December 30,
2001. The results of operations for the periods ended
June 30, 2002 and July 1, 2001 are not necessarily
indicative of the operating results for the full year.

Certain reclassifications have been made to prior
periods to conform to the current year presentation (See
Note 13).

2.     Recently
Issued Accounting Standards

In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS
No. 141 requires all business combinations initiated after
June 30, 2001 to be accounted for using the purchase
method. SFAS No. 142 establishes new guidelines for
accounting for goodwill and other intangible assets. In
accordance with SFAS No. 142, goodwill and intangible
assets with indefinite lives are not amortized, but must be
tested for impairment at least annually. The impact of adopting
SFAS No. 141 was not material. See Note 5 related to
the adoption of SFAS No. 142.

In July 2001, the FASB issued SFAS No. 143,
Accounting for Asset Retirement Obligations. SFAS
No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in
which it is incurred and a corresponding increase in the
carrying amount of the related long-lived asset. SFAS
No. 143 is effective for fiscal years beginning after
June 15, 2002. The impact of adopting SFAS No. 143 is
not expected to be material.

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 broadens the
presentation of discontinued operations to include more
transactions and eliminates the need to accrue for future
operating losses. Additionally, SFAS No. 144 prohibits the
retroactive classification of assets as held for sale and
requires revisions to the depreciable lives of long-lived assets
to be abandoned. SFAS No. 144 was effective
December 31, 2001 for the Corporation. The impact of
adopting SFAS No. 144 was not material. Prior to the
December 31, 2001 adoption of SFAS No. 144, the
Corporation had assets held for sale, which under the
transitional provisions of that pronouncement, will continue to
be accounted for in accordance with SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. Under provisions of
SFAS No. 144, depreciation on assets held for sale was
discontinued as of December 30, 2001.

In April 2002, the FASB issued SFAS
No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections. The rescission of SFAS No. 4,
Reporting Gains and Losses from Extinguishment of
Debt and SFAS No. 64, Extinguishments of Debt
made to Satisfy Sinking-Fund Requirements eliminates an
exception to general practice relating to the determination of
whether certain items should be classified as extraordinary and
is effective in fiscal years beginning after 2002, with earlier
implementation encouraged. The amendment of SFAS No. 13,
Accounting for Leases affects the accounting by the
lessee for certain lease modifications that have economic
effects similar to sale-leaseback transactions and is effective
for transactions entered into after May 15, 2002. The
rescission of SFAS No. 44, Accounting for Intangible
Assets for Motor Carriers removes a no longer relevant
standard from the authoritative literature. The rescission of
SFAS No. 44 and all other provisions of

5



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


SFAS No. 145 are effective for financial
statements issued on or after May 15, 2002. The impact of
adopting SFAS No. 145 is not expected to be material.

In July 2002, the FASB issued SFAS
No. 146, Accounting for Costs Associated with Exit or
Disposal Activities. SFAS No. 146 requires all
companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. SFAS No. 146 is to
be applied prospectively to exit or disposal activities after
December 31, 2002. The impact of adopting SFAS No. 146
is not expected to be material.

3.     Restricted
Marketable Securities

At June 30, 2002, Marketable Securities
included approximately $20 million of investments which are
pledged to secure letters of credit relating to certain tax
refunds.

4.     Property,
Plant and Equipment

Property, plant and equipment is composed of the
following:

|                              |                          |                |          |              |  |   |          |         | 
|----------------------------- | ------------------------ | -------------- | -------- | ------------ |  | - | -------- | ------- | 
|                              |                          | June 30,       |          | December 30,
|                              |                          | 2002           |          | 2001        
|                              |                          |                |          |             
|                              |                          |               
|                              |                          | (In thousands)
|Property, plant and equipment |                          |                |          |              |  |   |          |        
|                              | Land                     |                | $        | 14,426       |  |   | $        | 14,136  | 
|                              | Buildings                |                |          | 155,679      |  |   |          | 154,367 | 
|                              | Machinery and equipment  |                |          | 512,297      |  |   |          | 503,652 | 
|                              | Construction-in-progress |                |          | 12,006       |  |   |          | 18,164  | 
|                              |                          |                |          |              |  |   |          |        
|                              |                          |                | 694,408  |              |  |   | 690,319  |        
|Less accumulated depreciation |                          |                | (394,117 | )            |  |   | (381,239 | )      
|                              |                          |                |          |              |  |   |          |        
|                              |                          | $              | 300,291  |              |  | $ | 309,080  |        
|                              |                          |                |          |              |  |   |          |        

5.     Goodwill and
Other Intangible Assets

Effective December 31, 2001, the Corporation
adopted SFAS No. 142. SFAS No. 142 requires a
transitional and annual test of goodwill associated with
reporting units for indications of impairment. During the second
quarter 2002, the Corporation completed its transitional
impairment assessment for indications of impairment as of
December 31, 2001. No indications of impairment were noted for
any reporting units within the Corporations segments,
except within the HVAC segment. A second more detailed
impairment assessment involving the implied fair value of
goodwill resulted in a non-cash charge of $44.8 million
associated with the Corporations HVAC segment. As
required, this transitional charge has been recorded as a
cumulative effect of an accounting change in the
Corporations condensed consolidated statement of
operations for the first quarter of 2002. In the future, the
Corporation expects to complete its annual impairment assessment
in the fourth quarter of each year, unless circumstances dictate
more frequent assessments.

6



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


The following SFAS No. 142 disclosures
present the net loss and related per share amounts in the prior
year periods as if amortization of goodwill had not been
recorded. As of June 30, 2002, the Corporation has
$0.9 million of other intangible assets, net of accumulated
amortization, which it continues to amortize.

|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |        |  
|------------------------------------- | --------------------------------- | ------------- | ------ | ------------ | - | ------------ | ------- | ----------- | - | - | ----- | ----- |  | - | ------- | ------ | -
|                                      |                                   |              
|                                      |                                   | Quarter Ended
|                                      |                                   |              
|                                      |                                   | June 30,      |        |             
|                                      |                                   | 2002          |        | July 1, 2001
|(In thousands, except per share data) |                                   |               |        |             
|                                      |                                   |               |        |              |   | Add Back     |         |            
|                                      |                                   |               |        |              |   | Goodwill     |         |            
|                                      |                                   |               |        | As Reported  |   | Amortization |         | As Adjusted
|                                      |                                   |               |        |              |   |              |         |            
|Loss before income taxes              |                                   | $             | (2,654 | )            |   | $            | (7,775  | )           |   | $ | 4,366 |       |  | $ | (3,409  | )     
|                                      | Income tax provision (benefit)    |               |        | (3,023       | ) |              |         | (2,410      | ) |   |       | 24    |  |   |         | (2,386 | )
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|Net earnings (loss)                   |                                   | $             | 369    |              |   | $            | (5,365  | )           |   | $ | 4,342 |       |  | $ | (1,023  | )     
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|Earnings (loss) per common share:     |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Basic                             |               | $      | 0.01         |   |              | $       | (0.09       | ) |   | $     | 0.07  |  |   | $       | (0.02  | )
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Diluted                           |               | $      | 0.01         |   |              | $       | (0.09       | ) |   | $     | 0.07  |  |   | $       | (0.02  | )
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                     
|Segment Earnings (Loss):              |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Electrical                        |               | $      | (771         | ) |              | $       | 3,986       |   |   | $     | 3,437 |  |   | $       | 7,423  |  
|                                      | Steel Structures                  |               |        | 4,925        |   |              |         | 5,126       |   |   |       | 513   |  |   |         | 5,639  |  
|                                      | Communications                    |               |        | (275         | ) |              |         | (2,783      | ) |   |       | 60    |  |   |         | (2,723 | )
|                                      | HVAC                              |               |        | 209          |   |              |         | (1,329      | ) |   |       | 356   |  |   |         | (973   | )
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Total reportable segment earnings |               |        | 4,088        |   |              |         | 5,000       |   |   |       | 4,366 |  |   |         | 9,366  |  
|                                     
|Provision  restructured operations   |                                   |               | (361   | )            |   |              |        |             |   |   |      |       |  |   |        |       
|Interest expense  net                |                                   |               | (7,581 | )            |   |              | (10,529 | )           |   |   |      |       |  |   | (10,529 | )     
|Other (expense) income  net          |                                   |               | 1,200  |              |   |              | (2,246  | )           |   |   |      |       |  |   | (2,246  | )     
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       
|Loss before income taxes              |                                   | $             | (2,654 | )            |   | $            | (7,775  | )           |   | $ | 4,366 |       |  | $ | (3,409  | )     
|                                      |                                   |               |        |              |   |              |         |             |   |   |       |       |  |   |         |       

7



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |        |  
|------------------------------------- | --------------------------------- | ---------------- | ------- | ------------ | - | ------------ | ------- | ----------- | - | - | ----- | ----- |  | - | ------- | ------ | -
|                                      |                                   |                 
|                                      |                                   | Six Months Ended
|                                      |                                   |                 
|                                      |                                   | June 30,         |         |             
|                                      |                                   | 2002             |         | July 1, 2001
|(In thousands, except per share data) |                                   |                  |         |             
|                                      |                                   |                  |         |              |   | Add Back     |         |            
|                                      |                                   |                  |         |              |   | Goodwill     |         |            
|                                      |                                   |                  |         | As Reported  |   | Amortization |         | As Adjusted
|                                      |                                   |                  |         |              |   |              |         |            
|Loss before income taxes              |                                   | $                | (3,692  | )            |   | $            | (14,972 | )           |   | $ | 7,916 |       |  | $ | (7,056  | )     
|                                      | Income tax provision (benefit)    |                  |         | 7,586        |   |              |         | (4,641      | ) |   |       | 47    |  |   |         | (4,594 | )
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|Net loss                              |                                   | $                | (11,278 | )            |   | $            | (10,331 | )           |   | $ | 7,869 |       |  | $ | (2,462  | )     
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|Loss per common share:                |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Basic                             |                  | $       | (0.19        | ) |              | $       | (0.18       | ) |   | $     | 0.14  |  |   | $       | (0.04  | )
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Diluted                           |                  | $       | (0.19        | ) |              | $       | (0.18       | ) |   | $     | 0.14  |  |   | $       | (0.04  | )
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                     
|Segment Earnings (Loss):              |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Electrical                        |                  | $       | 1,906        |   |              | $       | 4,895       |   |   | $     | 6,106 |  |   | $       | 11,001 |  
|                                      | Steel Structures                  |                  |         | 8,833        |   |              |         | 8,668       |   |   |       | 1,026 |  |   |         | 9,694  |  
|                                      | Communications                    |                  |         | 3,812        |   |              |         | (5,922      | ) |   |       | 72    |  |   |         | (5,850 | )
|                                      | HVAC                              |                  |         | 1,422        |   |              |         | (352        | ) |   |       | 712   |  |   |         | 360    |  
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|                                      | Total reportable segment earnings |                  |         | 15,973       |   |              |         | 7,289       |   |   |       | 7,916 |  |   |         | 15,205 |  
|                                     
|Provision  restructured operations   |                                   |                  | (1,626  | )            |   |              |        |             |   |   |      |       |  |   |        |       
|Interest expense  net                |                                   |                  | (18,480 | )            |   |              | (20,498 | )           |   |   |      |       |  |   | (20,498 | )     
|Other (expense) income  net          |                                   |                  | 441     |              |   |              | (1,763  | )           |   |   |      |       |  |   | (1,763  | )     
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       
|Loss before income taxes              |                                   | $                | (3,692  | )            |   | $            | (14,972 | )           |   | $ | 7,916 |       |  | $ | (7,056  | )     
|                                      |                                   |                  |         |              |   |              |         |             |   |   |       |       |  |   |         |       

6.     Restructuring

Late in 2001, the Corporation began planning and
implementing comprehensive initiatives to streamline production,
improve productivity and reduce costs at its United States,
European, and Mexican electrical products manufacturing
facilities.

The manufacturing initiatives have three major
components:



| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | Revising manufacturing processes to improve
    equipment and labor productivity;
|
| |  | Consolidating manufacturing capacity; and                                        
|
| |  | Investing in tooling and training to achieve
    superior levels of productivity.

8



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


Pre-tax charges associated with the project are
expected to total approximately $80 to $85 million. As
indicated below, the Corporation recorded $49.1 million in
pre-tax charges in the fourth quarter of 2001 and
$26.1 million during the six months ended June 30,
2002. The balance of the pre-tax charges is expected to be
recorded over the remainder of 2002. The components of the 2001
and 2002 pre-tax charges related to this program are as follows:

|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------------------------------ | --------------------------------------- | ----------- | ------ | ----------- |  | ----------- | ------ | ------------ |  | ----- | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                             |                                         | 4th Quarter |        | 1st Quarter |  | 2nd Quarter |        | Year to Date |  |      
|                                                             |                                         | 2001        |        | 2002        |  | 2002        |        | 2002         |  | Total
|(In thousands)                                               |                                         |             |        |             |  |             |        |              |  |      
|Certain costs excluded from Electrical segment
    earnings: |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|                                                             | Impairment charges on long-lived assets |             | $      | 30,041      |  |             | $      |             |  |       | $      |       |  |   | $      |       |  |   | $      | 30,041 | 
|                                                             | Provision  restructured operations     |             |        | 11,666      |  |             |        | 1,265        |  |       |        | 361    |  |   |        | 1,626  |  |   |        | 13,292 | 
|                                                             | Cost of sales                           |             |        | 3,047       |  |             |        |             |  |       |        |       |  |   |        |       |  |   |        | 3,047  | 
|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|Total excluded from Electrical segment earnings              |                                         |             | 44,754 |             |  |             | 1,265  |              |  |       | 361    |        |  |   | 1,626  |        |  |   | 46,380 |       
|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|Certain costs reflected in Electrical segment
    earnings:  |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|                                                             | Cost of sales                           |             |        | 4,321       |  |             |        | 11,024       |  |       |        | 13,431 |  |   |        | 24,455 |  |   |        | 28,776 | 
|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|Total reflected in Electrical segment earnings               |                                         |             | 4,321  |             |  |             | 11,024 |              |  |       | 13,431 |        |  |   | 24,455 |        |  |   | 28,776 |       
|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       
|Total manufacturing plan costs                               |                                         | $           | 49,075 |             |  | $           | 12,289 |              |  | $     | 13,792 |        |  | $ | 26,081 |        |  | $ | 75,156 |       
|                                                             |                                         |             |        |             |  |             |        |              |  |       |        |        |  |   |        |        |  |   |        |       

The following table summarizes the 2002 and 2001
restructuring provisions and activity:

|                                     |  |           |        |           |  |          |        |            |  |   |        |   |  |   |       | 
|------------------------------------ |  | --------- | ------ | --------- |  | -------- | ------ | ---------- |  | - | ------ | - |  | - | ----- | 
|                                     |  | Original  |        |           |  |          |        | Balance at
|                                     |  | 2001      |        | 2002      |  | 2002     |        | June 30,  
|                                     |  | Provision |        | Provision |  | Payments |        | 2002      
|(In thousands)                       |  |           |        |           |  |          |        |           
|Severance and employee-related costs |  | $         | 4,856  |           |  | $        | 1,517  |            |  | $ | (3,948 | ) |  | $ | 2,425 | 
|Idle facility charges (recovery)     |  |           | 4,561  |           |  |          | (1,408 | )          |  |   | (707   | ) |  |   | 2,446 | 
|Other facility exit costs            |  |           | 2,249  |           |  |          | 1,517  |            |  |   | (482   | ) |  |   | 3,284 | 
|                                     |  |           |        |           |  |          |        |            |  |   |        |   |  |   |       | 
|                                     |  | $         | 11,666 |           |  | $        | 1,626  |            |  | $ | (5,137 | ) |  | $ | 8,155 | 
|                                     |  |           |        |           |  |          |        |            |  |   |        |   |  |   |       | 

7.     Basic and
Fully Diluted Earnings Per Share

Basic earnings per share are computed by dividing
net earnings (loss) by the weighted-average number of shares of
common stock outstanding during the period. Diluted earnings per
share are computed by dividing net earnings (loss) by the sum of
(1) the weighted-average number of shares of common stock
outstanding during the period and (2) the dilutive effect
of the assumed exercise of stock options using the treasury
stock method. Due to the net losses for the six months of 2002
and the quarter and six-month periods for 2001, the assumed net
exercise of stock options in those periods was excluded, as the
effect would have been anti-dilutive.

9



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


8.     Income
Taxes

In the first quarter 2002, the Corporation
elected to take advantage of recent changes in U.S. tax
laws that allow companies to extend the carryback period for
certain federal net operating losses from two to five years. The
Corporation filed its 2001 and amended prior years federal tax
returns to reflect this decision and carried back and realized
all federal net operating losses that existed as of
December 30, 2001. Accordingly, the Corporation became
eligible to receive cash tax refunds of approximately
$65 million, of which approximately $46 million was
received in April 2002. As of June 30, 2002, the Corporation had
approximately $19 million of remaining income tax refunds,
including interest of approximately $3.3 million, which
were received in late July 2002. In the first quarter of
2002, these events resulted in an $11.0 million net tax
charge to earnings composed of a $22.9 million tax charge
from converting certain foreign tax credits into foreign tax
deductions and an $11.9 million tax benefit from releasing
a federal valuation allowance as of December 30, 2001 on
deferred tax assets associated with minimum pension liabilities.
As a result of these events, long-term deferred income tax
assets as of December 30, 2001, that were classified as a
long-term asset Deferred income taxes in the
accompanying balance sheet as of that date, have been
reclassified to income tax receivables during the first quarter
of 2002.

During the second quarter 2002, the Corporation
recorded a tax benefit of $2.2 million as a result of the
favorable completion of several tax audits and a reduction of
worldwide tax exposures.

Realization of the deferred tax assets is
dependent upon the Corporations ability to generate
sufficient future taxable income and, if necessary, execution of
its tax planning strategies. Management believes that it is
more-likely-than-not that future taxable income and tax planning
strategies, based on tax laws in effect as of June 30,
2002, will be sufficient to realize the recorded deferred tax
assets, net of existing valuation allowances at June 30,
2002. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income and tax
planning strategies in making this assessment. Projected future
taxable income is based on managements forecast of the
operating results of the Corporation, and there can be no
assurance that such results will be achieved. Management
periodically reviews such forecasts in comparison with actual
results and expected trends. Management has identified certain
tax planning strategies that it could utilize to avoid the loss
carryforwards expiring prior to their realization. These tax
planning strategies include primarily sales of non-core assets.
In the event management determines that sufficient future
taxable income, in light of tax planning strategies, may not be
generated to fully realize the net deferred tax assets, the
Corporation will increase valuation allowances by a charge to
income tax expense in the period of such determination.
Additionally, if events change in subsequent periods which
indicate that a previously recorded valuation allowance is no
longer needed, the Corporation will decrease the valuation
allowance by providing an income tax benefit in the period of
such determination.

9.     Comprehensive
Income (Loss)

Total comprehensive income (loss) and its
components are as follows:

|                                         |  |               |        |                  |  |          |        |         |  |   |         |   |  |   |         |  
|---------------------------------------- |  | ------------- | ------ | ---------------- |  | -------- | ------ | ------- |  | - | ------- | - |  | - | ------- | -
|                                         |  |               |        |                 
|                                         |  | Quarter Ended |        | Six Months Ended
|                                         |  |               |        |                 
|                                         |  | June 30,      |        | July 1,          |  | June 30, |        | July 1,
|                                         |  | 2002          |        | 2001             |  | 2002     |        | 2001   
|(In thousands)                           |  |               |        |                  |  |          |        |        
|Net earnings (loss)                      |  | $             | 369    |                  |  | $        | (5,365 | )       |  | $ | (56,093 | ) |  | $ | (10,331 | )
|Foreign currency translation adjustments |  |               | 11,091 |                  |  |          | 7,594  |         |  |   | 10,758  |   |  |   | (6,233  | )
|Unrealized losses on securities          |  |               | (52    | )                |  |          | (54    | )       |  |   | (92     | ) |  |   | (61     | )
|                                         |  |               |        |                  |  |          |        |         |  |   |         |   |  |   |         |  
|Comprehensive income (loss)              |  | $             | 11,408 |                  |  | $        | 2,175  |         |  | $ | (45,427 | ) |  | $ | (16,625 | )
|                                         |  |               |        |                  |  |          |        |         |  |   |         |   |  |   |         |  

10



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


10.     Derivative
Instruments

At times, the Corporation utilizes forward
foreign exchange contracts for the sale or purchase of certain
foreign currencies. In addition, the Corporation is exposed to
risk from fluctuating prices for certain commodities used to
manufacture its products, primarily: copper, zinc and aluminum.
At times, some of that risk is hedged through the use of futures
contracts that fix the price the Corporation will pay for the
commodity. These derivative instruments have not been designated
as hedging instruments and do not qualify for hedge accounting
treatment under the provisions of SFAS No. 133 and SFAS
No. 138.

As of June 30, 2002 and December 30,
2001, the Corporation had outstanding commodities futures
contracts of $5.6 million and $11.5 million,
respectively. The Corporation had no outstanding forward foreign
exchange contracts as of June 30, 2002 and
December 30, 2001. Mark-to-market gains and losses for
commodities futures are recorded in cost of sales. The gain
(loss) impact of commodities futures and foreign exchange
contracts in the statement of operations for the quarter and six
months ended June 30, 2002 and July 1, 2001 was as follows:

|                                   |  |               |    |                  |  |          |        |         |  |   |     |  |  |   |        |  
|---------------------------------- |  | ------------- | -- | ---------------- |  | -------- | ------ | ------- |  | - | --- |  |  | - | ------ | -
|                                   |  |               |    |                 
|                                   |  | Quarter Ended |    | Six Months Ended
|                                   |  |               |    |                 
|                                   |  | June 30,      |    | July 1,          |  | June 30, |        | July 1,
|                                   |  | 2002          |    | 2001             |  | 2002     |        | 2001   
|(In thousands)                     |  |               |    |                  |  |          |        |        
|Commodities futures                |  | $             | 64 |                  |  | $        | (122   | )       |  | $ | 981 |  |  | $ | (876   | )
|Forward foreign exchange contracts |  |               |   |                  |  |          | (1,130 | )       |  |   |    |  |  |   | (850   | )
|                                   |  |               |    |                  |  |          |        |         |  |   |     |  |  |   |        |  
|                                   |  | $             | 64 |                  |  | $        | (1,252 | )       |  | $ | 981 |  |  | $ | (1,726 | )
|                                   |  |               |    |                  |  |          |        |         |  |   |     |  |  |   |        |  

11.     Debt

The Corporations long-term debt at
June 30, 2002 and December 30, 2001 was:

|                         |  |          |         |              |  |   |         | 
|------------------------ |  | -------- | ------- | ------------ |  | - | ------- | 
|                         |  | June 30, |         | December 30,
|                         |  | 2002     |         | 2001        
|(In thousands)           |  |          |         |             
|Notes payable            |  | $        | 605,016 |              |  | $ | 605,110 | 
|Non-U.S. borrowings      |  |          | 54,210  |              |  |   | 49,776  | 
|Industrial revenue bonds |  |          | 7,055   |              |  |   | 11,155  | 
|Other                    |  |          | 2,268   |              |  |   | 5,996   | 
|                         |  |          |         |              |  |   |         | 
|                         |  |          | 668,549 |              |  |   | 672,037 | 
|Less current portion     |  |          | 110,742 |              |  |   | 54,002  | 
|                         |  |          |         |              |  |   |         | 
|Long-term debt           |  | $        | 557,807 |              |  | $ | 618,035 | 
|                         |  |          |         |              |  |   |         | 

12.     Segment
Disclosures

The Corporation has four reportable segments:
Electrical, Steel Structures, Communications and HVAC. The
Electrical segment manufactures and sells a broad package of
electrical connectors, components and accessories consisting
primarily of fasteners, connectors, fittings, metal framing,
boxes and covers for use in industrial, commercial, residential
and utility construction, renovation and maintenance
applications. The Steel Structures segment includes steel
transmission poles and towers used for utility, cellular,
lighting and municipal applications. The Communications segment
produces and sells a package of drop-line hardware, connectors,
fasteners, grounding materials, and various components for use
in cable television, telecommunications and data communications
applications. The HVAC segment includes heating and ventilation
products for commercial and industrial applications.

11



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


The Corporations reportable segments are
based on a combination of product lines and channels to market,
and represent the primary mode used to assess allocation of
resources and performance. Management evaluates each
segments profit or loss performance based on earnings
before interest and taxes; foreign exchange gains and losses;
impairments; restructuring; and certain other charges. The
Corporation has no material inter-segment sales.

|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |         |  
|----------------------------------- | --------------------------------- | ------------- | ------ | ---------------- | - | -------- | ------- | ------- | - | - | ------- | ------- |  | - | ------- | ------- | -
|                                    |                                   |               |        |                 
|                                    |                                   | Quarter Ended |        | Six Months Ended
|                                    |                                   |               |        |                 
|                                    |                                   | June 30,      |        | July 1,          |   | June 30, |         | July 1,
|                                    |                                   | 2002          |        | 2001             |   | 2002     |         | 2001   
|(In thousands)                      |                                   |               |        |                  |   |          |         |        
|Net sales:                          |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|                                    | Electrical                        |               | $      | 265,150          |   |          | $       | 302,040 |   |   | $       | 521,676 |  |   | $       | 611,680 |  
|                                    | Steel Structures                  |               |        | 33,581           |   |          |         | 36,270  |   |   |         | 68,706  |  |   |         | 69,662  |  
|                                    | Communications                    |               |        | 23,358           |   |          |         | 27,579  |   |   |         | 52,695  |  |   |         | 55,919  |  
|                                    | HVAC                              |               |        | 19,190           |   |          |         | 19,555  |   |   |         | 40,253  |  |   |         | 45,131  |  
|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|                                    | Total net sales                   |               | $      | 341,279          |   |          | $       | 385,444 |   |   | $       | 683,330 |  |   | $       | 782,392 |  
|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|Segment earnings (loss):            |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|                                    | Electrical                        |               | $      | (771             | ) |          | $       | 3,986   |   |   | $       | 1,906   |  |   | $       | 4,895   |  
|                                    | Steel Structures                  |               |        | 4,925            |   |          |         | 5,126   |   |   |         | 8,833   |  |   |         | 8,668   |  
|                                    | Communications                    |               |        | (275             | ) |          |         | (2,783  | ) |   |         | 3,812   |  |   |         | (5,922  | )
|                                    | HVAC                              |               |        | 209              |   |          |         | (1,329  | ) |   |         | 1,422   |  |   |         | (352    | )
|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|                                    | Total reportable segment earnings |               |        | 4,088            |   |          |         | 5,000   |   |   |         | 15,973  |  |   |         | 7,289   |  
|                                   
|Provision  restructured operations |                                   |               | (361   | )                |   |          |        |         |   |   | (1,626  | )       |  |   |        |        
|Interest expense  net              |                                   |               | (7,581 | )                |   |          | (10,529 | )       |   |   | (18,480 | )       |  |   | (20,498 | )      
|Other (expense) income  net        |                                   |               | 1,200  |                  |   |          | (2,246  | )       |   |   | 441     |         |  |   | (1,763  | )      
|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        
|Loss before income taxes            |                                   | $             | (2,654 | )                |   | $        | (7,775  | )       |   | $ | (3,692  | )       |  | $ | (14,972 | )      
|                                    |                                   |               |        |                  |   |          |         |         |   |   |         |         |  |   |         |        

As of June 30, 2002, goodwill by reportable
segment was $372.9 million for Electrical,
$60.5 million for Steel Structures and $0.6 million
for Communications.

12



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


13.     Reclassifications

To conform to current year presentation, research
and development costs have been reclassified to cost of sales
and amortization of intangibles has been reclassified to
selling, general and administrative in the prior year condensed
consolidated statement of operations. The table below reflects
these reclassifications.

|                                           |                       |                               |         |             |      |             |         |             |      |            |         |        |      |   |         |        |      |   |           |         |      |  
|------------------------------------------ | --------------------- | ----------------------------- | ------- | ----------- | ---- | ----------- | ------- | ----------- | ---- | ---------- | ------- | ------ | ---- | - | ------- | ------ | ---- | - | --------- | ------- | ---- | -
|                                           |                       |                              
|                                           |                       | 2001                         
|                                           |                       |                              
|                                           |                       | 1st Quarter                   |         | 2nd Quarter |      | 3rd Quarter |         | 4th Quarter |      | Total Year
|                                           |                       |                               |         |             |      |             |         |             |      |           
|                                           |                       |                              
|                                           |                       | (In thousands)               
|Net sales                                  |                       | $                             | 396,948 |             |      | $           | 385,444 |             |      | $          | 373,186 |        |      | $ | 341,913 |        |      | $ | 1,497,491 |        
|Cost of sales                              |                       |                               | 305,063 |             |      |             | 292,112 |             |      |            | 288,738 |        |      |   | 293,851 |        |      |   | 1,179,764 |        
|                                           |                       |                               |         |             |      |             |         |             |      |            |         |        |      |   |         |        |      |   |           |        
|                                           | Gross margin          |                               |         | 91,885      |      |             |         | 93,332      |      |            |         | 84,448 |      |   |         | 48,062 |      |   |           | 317,727 |     
|                                           |                       | Gross margin  % of net sales |         |             | 23.1 | %           |         |             | 24.2 | %          |         |        | 22.6 | % |         |        | 14.1 | % |           |         | 21.2 | %
|Selling, general and administrative (SG&A) |                       |                               | 93,030  |             |      |             | 88,577  |             |      |            | 85,600  |        |      |   | 73,840  |        |      |   | 341,047   |        
|                                           | SG&A  % of net sales |                               |         | 23.4        | %    |             |         | 23.0        | %    |            |         | 22.9   | %    |   |         | 21.6   | %    |   |           | 22.8    | %   
|Impairment charges on long-lived assets    |                       |                               |        |             |      |             |        |             |      |            | 36,637  |        |      |   | 46,644  |        |      |   | 83,281    |        
|Provision  restructured operations        |                       |                               |        |             |      |             |        |             |      |            |        |        |      |   | 11,666  |        |      |   | 11,666    |        
|                                           |                       |                               |         |             |      |             |         |             |      |            |         |        |      |   |         |        |      |   |           |        
|Earnings (loss) from operations            |                       | $                             | (1,145  | )           |      | $           | 4,755   |             |      | $          | (37,789 | )      |      | $ | (84,088 | )      |      | $ | (118,267  | )      
|                                           |                       |                               |         |             |      |             |         |             |      |            |         |        |      |   |         |        |      |   |           |        

14.     Contingencies



| |                       
| | ----------------------
| | Shareholder Litigation

During 2000 certain shareholders of the
Corporation filed five separate class-action suits in the United
States District Court for the Western District of Tennessee
against the Corporation, Clyde R. Moore and Fred R.
Jones. The complaints allege fraud and violations of
Section 10(b) and 20(a) of the Securities Exchange Act of
1934, as amended, and Rule 10b-5 thereunder. The plaintiffs
allege that purchasers of the Corporations common stock
between April 28, 1999 and August 21, 2000, were
damaged when the market value of the stock dropped by nearly 29%
on December 15, 1999, dropped nearly 26% on June 20,
2000 and fell another 8% on August 22, 2000. An unspecified
amount of damages is sought.

On December 12, 2000, the Court issued an
order consolidating all five of the actions into a single
action. The consolidated complaint essentially repeats the
allegations in the earlier complaints. On April 9, 2002,
the U.S. District Court for the Western District of Tennessee
entered an Order granting in part and denying in part the
Corporations Motion to Dismiss in the shareholder class
action lawsuit. The Court dismissed allegations against Clyde
Moore, former chief executive officer, and Fred Jones, former
chief financial officer, for violations of Section 10(b)
and Rule 10b-5 under the Securities Exchange Act of 1934.
The Court also granted KPMGs Motion to Dismiss in a
parallel shareholder class-action lawsuit.

On July 24, 2002, the Court refrained from
establishing a schedule for pre-trial discovery in this case.
The Court instead ordered that the parties enter into formal
mediation proceedings immediately. A formal order controlling
the mediation is expected to be entered within 30 days.

The Corporation intends to contest the litigation
vigorously. At this stage, the Corporation is unable to predict
the outcome of this litigation and its ultimate effect, if any,
on the financial condition of the Corporation. However,
management believes that there are meritorious defenses to the
claims. Mr. Moore and Mr. Jones may be entitled to
indemnification by the Corporation in connection with this
litigation.

13



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##### Table of Contents



THOMAS & BETTS CORPORATION AND
SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




| |                  
| | -----------------
| | SEC Investigation

Soon after issuing the August 21, 2000 press
release announcing substantial charges in the second fiscal
quarter of 2000, the Corporation received an informal request
for information regarding the basis of the charges from the
staff of the Securities and Exchange Commission (the
Commission) Enforcement Division. In response, the
Corporation collected and produced the bulk of the documents
requested and various former and current employees were
interviewed telephonically by the Commissions staff.

On January 4, 2001, the Commission issued a
Formal Order of Investigation and subsequently required the
production of additional documents, conducted interviews and
took the testimony of certain current and former employees.
During the second quarter of 2002, the Corporation certified to
the Commission that it had completed the document production.
Management is unable to express any opinion regarding the future
course of this investigation; however, the Corporation intends
to fully cooperate with the Commission during this process.



| |                    
| | -------------------
| | Other Legal Matters

The Corporation is also involved in legal
proceedings and litigation arising in the ordinary course of
business. In those cases where the Corporation is the defendant,
plaintiffs may seek to recover large and sometimes unspecified
amounts, or other types of relief and some matters may remain
unresolved for several years. Such matters may be subject to
many uncertainties and outcomes are not predictable with
assurance. The Corporation has provided for losses to the extent
probable and estimable; however, additional losses, even though
not anticipated, could be material with respect to financial
position, results of operations or liquidity in any given period.

15.     Leviton
Manufacturing Co., Inc.

Prior to 2002, the Corporation recorded its
investment in Leviton using the equity method. The
Corporations ability to exercise significant influence
effectively ended in January 2002 with the retirement of the
Corporations primary liaison between Levitons
management and the Corporation. In addition, the
Corporations current management does not have a
relationship with Levitons management at this time from
which it could exercise such influence were it so inclined. In
light of these developments, the Corporation determined that it
no longer has the ability to influence the operating and
financial policies of Leviton. Therefore, GAAP requires that the
Corporation adopt the cost method of accounting for this
investment on a prospective basis beginning in the first quarter
of 2002. The Corporation adopted the cost method of accounting
for its investment in Leviton beginning in the first quarter of
2002.

14



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Comparison of Periods in 2002 with Periods in
2001

Consolidated Results

|                                     |  |               |         |                 |  |           |       |          |  |   |         |   |  |  |       |  
|------------------------------------ |  | ------------- | ------- | --------------- |  | --------- | ----- | -------- |  | - | ------- | - |  |  | ----- | -
|                                     |  |              
|                                     |  | Quarter Ended
|                                     |  |              
|                                     |  |               |         |                
|                                     |  | June 30, 2002 |         | July 1, 2001(a)
|                                     |  |               |         |                
|                                     |  | In            |         | % of Net        |  | In        |       | % of Net
|                                     |  | Thousands     |         | Sales           |  | Thousands |       | Sales   
|                                     |  |               |         |                 |  |           |       |         
|Net sales                            |  | $             | 341,279 |                 |  |           | 100.0 |          |  | $ | 385,444 |   |  |  | 100.0 |  
|Gross margin                         |  |               | 77,499  |                 |  |           | 22.7  |          |  |   | 93,332  |   |  |  | 24.2  |  
|Selling, general and administrative  |  |               | 73,809  |                 |  |           | 21.6  |          |  |   | 88,577  |   |  |  | 23.0  |  
|Provision  restructured operations  |  |               | 361     |                 |  |           | 0.1   |          |  |   |        |   |  |  |      |  
|Earnings from operations             |  |               | 3,329   |                 |  |           | 1.0   |          |  |   | 4,755   |   |  |  | 1.2   |  
|Income from unconsolidated companies |  |               | 398     |                 |  |           | 0.1   |          |  |   | 245     |   |  |  | 0.1   |  
|Interest expense  net               |  |               | (7,581  | )               |  |           | (2.2  | )        |  |   | (10,529 | ) |  |  | (2.7  | )

|                                     |  |                  |         |                 |  |           |       |          |  |   |         |   |  |  |       |  
|------------------------------------ |  | ---------------- | ------- | --------------- |  | --------- | ----- | -------- |  | - | ------- | - |  |  | ----- | -
|                                     |  |                 
|                                     |  | Six Months Ended
|                                     |  |                 
|                                     |  |                  |         |                
|                                     |  | June 30, 2002    |         | July 1, 2001(a)
|                                     |  |                  |         |                
|                                     |  | In               |         | % of Net        |  | In        |       | % of Net
|                                     |  | Thousands        |         | Sales           |  | Thousands |       | Sales   
|                                     |  |                  |         |                 |  |           |       |         
|Net sales                            |  | $                | 683,330 |                 |  |           | 100.0 |          |  | $ | 782,392 |   |  |  | 100.0 |  
|Gross margin                         |  |                  | 161,278 |                 |  |           | 23.6  |          |  |   | 185,217 |   |  |  | 23.7  |  
|Selling, general and administrative  |  |                  | 146,405 |                 |  |           | 21.4  |          |  |   | 181,607 |   |  |  | 23.2  |  
|Provision  restructured operations  |  |                  | 1,626   |                 |  |           | 0.2   |          |  |   |        |   |  |  |      |  
|Earnings from operations             |  |                  | 13,247  |                 |  |           | 1.9   |          |  |   | 3,610   |   |  |  | 0.5   |  
|Income from unconsolidated companies |  |                  | 1,100   |                 |  |           | 0.2   |          |  |   | 3,679   |   |  |  | 0.5   |  
|Interest expense  net               |  |                  | (18,480 | )               |  |           | (2.7  | )        |  |   | (20,498 | ) |  |  | (2.6  | )



---



|    |  |                                                                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | To conform to current year presentation, research
    and development costs have been reclassified to cost of sales
    and amortization of intangibles has been reclassified to
    selling, general and administrative in the prior year condensed
    consolidated statement of operations.



| |                                                       
| | ------------------------------------------------------
| | Manufacturing Consolidation and Efficiency
    Program

In December 2001, Thomas & Betts
announced a comprehensive manufacturing consolidation and
efficiency program. The program affects approximately two-thirds
of the Corporations total manufacturing operations,
including all electrical products manufacturing plants in the
United States, Europe and Mexico, and has three primary
components: consolidating manufacturing capacity, improving
processes and investing in tooling and equipment. The program is
progressing on schedule and will be substantially complete by
the end of the third quarter 2002.

Thomas & Betts expects on-going pre-tax
savings of approximately $45 to $50 million annually from
the manufacturing consolidation and efficiency program. Pre-tax
charges associated with the program are expected to total
approximately $80 to $85 million, down slightly from
earlier estimates of $80 to $90 million. As of
June 30, 2002, Thomas & Betts had incurred
$75 million of these charges. The Corporation recorded
$49 million in pre-tax charges in the fourth quarter 2001
and $26 million during the first six months of 2002 of
which $14 million were recorded in the second quarter of
2002. The balance of the pre-tax charges is expected to be
recorded over the remainder of 2002.

15



---



##### Table of Contents





| |          
| | ---------
| | Net Sales

Second quarter 2002 sales were
$341.3 million, down 11.5% compared to the second quarter
2001. Excluding revenues from product lines divested or
discontinued, sales were down 4.7% compared to the year-ago
period. For the six months ended June 30, 2002, the
Corporation reported sales of $683.3 million, down 12.7% on
a year-over-year basis. Excluding divested or discontinued
product lines, sales would have been down 6.8% from the first
half of 2001. The sales decline, excluding divested or
discontinued product lines, was expected and is due mainly to
continued weakness in the Corporations core electrical
markets.



| |             
| | ------------
| | Gross Margin

The gross margin was 22.7% of sales in the second
quarter 2002, compared to 24.2% in the same period last year.
For the first six months of 2002, the Corporations gross
margin as a percent of sales was 23.6% as compared to 23.7% in
the same period last year. Excluding $13.4 million and
$24.4 million for the current quarter and six-month
periods, respectively, in manufacturing plan costs included in
cost of sales, the gross margin would have been 26.6% and 27.2%
of sales, respectively, for the 2002 second quarter and
year-to-date periods.

Several factors contributed to the underlying
improvement in the adjusted gross margin: lower manufacturing
costs resulting from actions taken last year, as well as the
initial benefit of the manufacturing restructuring program now
underway; lower freight expense; and a revised pricing schedule
in the Electrical segment that took effect January 1, 2002.
The Corporations goal is to achieve a gross margin of at
least 30% of sales.



| |         
| | --------
| | Expenses

Selling, general and administrative (SG&A)
expense was $73.8 million, or 21.6% of sales in the quarter
just ended, compared with $88.6 million, or 23.0% of sales,
in the second quarter last year. On a comparable basis if
goodwill amortization had not been reported in the prior year,
SG&A for 2001 would have been $84.2 million, or 21.8%
of sales for the second quarter. For the six-month period just
ended, SG&A was $146.4 million, or 21.4% of sales.
After adjustment of $7.9 million for amortization, SG&A
would have been $173.7 million, or 22.2% of sales for the
six months ended in 2001.

The improvement in SG&A is due to actions
taken over the past several quarters to strategically
restructure the sales organization and realign corporate support
functions commensurate with sales levels. The Corporations
goal is to achieve SG&A expense as a percentage of annual
sales at approximately 20% or less.

During the quarter and six month periods ended
June 30, 2002, the Corporation recorded pre-tax charges of
$13.8 million and $26.1 million, respectively, for the
manufacturing initiatives previously discussed. Of the total
charges recorded, restructure charges totaled $0.4 million
and $1.6 million for the current quarter and year-to-date
periods. The remaining charges for manufacturing initiatives
were included in cost of sales.



| |                         
| | ------------------------
| | Earnings from operations

Earnings from operations were $3.3 million
for the second quarter 2002 compared to $4.8 million in the
same period last year. Excluding $13.8 million in charges
associated with the manufacturing restructuring program,
operating earnings would have been $17.1 million in the
three-month period ended June 30, 2002. When adjusted for
the elimination of goodwill amortization in accordance with
SFAS 142, we would have reported operating earnings of
$9.1 million in the second quarter 2001.

Earnings from operations for the first six months
of 2002 were $13.2 million versus $3.6 million in
operating earnings in the comparable period last year. Excluding
$26.1 million in charges associated with the manufacturing
restructuring program, operating earnings would have been
$39.3 million for the six-month period ended June 30,
2002. Operating earnings for the first half of 2001 would have
been $11.5 million when adjusted for the elimination of
goodwill amortization in accordance with SFAS 142.

16



---



##### Table of Contents





| |                                         
| | ----------------------------------------
| | Income from Unconsolidated
    Companies

Income from unconsolidated companies was
$0.4 million for the second quarter 2002 compared to
$0.2 million for the second quarter of 2001. The
Corporation reported $1.1 million in earnings from
unconsolidated companies in the first six months of 2002,
compared to earnings of $3.7 million in the year-earlier
period. Effective the beginning of fiscal year 2002, the
Corporation changed its method of accounting for its investment
in Leviton Manufacturing Co., Inc. from the equity to the cost
method.



| |                       
| | ----------------------
| | Interest Expense  Net

Net interest expense in the second quarter 2002
was $7.6 million, compared with $10.5 million recorded
a year ago. The 2002 year-to-date net interest expense was
$18.5 million compared to $20.5 million for the same
period in 2001. The decrease in net interest expense for the
quarter and year-to-date 2002 periods is due primarily to
interest income of $3.3 million recorded in the second
quarter 2002 associated with income tax refunds. The
Corporations interest income reflected in interest
expense  net was $4.3 million and
$1.6 million for the second quarter of 2002 and 2001,
respectively, and $5.2 million and $3.9 million for
the year-to-date 2002 and 2001 periods, respectively.



| |             
| | ------------
| | Income Taxes

During the second quarter 2002, the Corporation
recorded a tax benefit of $2.2 million as a result of the
favorable completion of several tax audits and a reduction of
worldwide tax exposures. Excluding this benefit, the 2002 second
quarter effective tax rate was a benefit of 31%. In addition to
the $2.2 million benefit recorded in the second quarter of
2002, the current six-month period effective tax rate reflects
an $11.0 million net tax charge recorded in the first
quarter of 2002. This net tax charge is composed of a
$22.9 million tax charge related to converting certain
foreign tax credits into foreign tax deductions and an
$11.9 million tax benefit from releasing a federal
valuation allowance as of December 30, 2001 on deferred tax
assets associated with minimum pension liabilities. Excluding
the net tax charge for the first quarter and the tax benefit for
the second quarter, the 2002 year-to-date effective tax
rate was a benefit of 31%. For the second quarter and six months
in 2001, the effective tax rate was a benefit of 31%. See
Note 8 in the Notes to Condensed Consolidated Financial
Statements.



| |                                              
| | ---------------------------------------------
| | Cumulative Effect of an Accounting
    Change

During the second quarter, Thomas &
Betts completed its transitional evaluation of goodwill as of
the beginning of 2002 as required under the new accounting
standard SFAS No. 142. Consequently, the Corporation has
revised its first quarter 2002 financial statements to reflect a
$44.8 million non-cash charge to reflect an impairment of
goodwill associated with its HVAC segment. This charge reflects
the cumulative effect of adopting the accounting change and does
not affect day-to-day operations of the Corporation. See
Note 5 in the Notes to Condensed Consolidated Financial
Statements.



| |                    
| | -------------------
| | Net Earnings (Loss)

The Corporation reported net earnings of
$0.4 million in the most recent quarter, or $0.01 per
basic and diluted share. In the second quarter last year, the
Corporation reported a $5.4 million loss, or a
$0.09 loss per share. Excluding the manufacturing program
charges, net earnings would have been $9.9 million or
$0.17 per basic and diluted share in the most recent
quarter. Thomas & Betts would have reported a net loss
of $1.0 million in the second quarter 2001, or a loss per
share of $0.02, after the elimination of goodwill amortization
in accordance with SFAS No. 142.

The Corporations year-to-date net loss was
$56.1 million, or a loss of $0.96 per share, which
compares to a loss of $10.3 million, or $0.18 loss per
share, in the year-ago period. Excluding the aforementioned
charges associated with the manufacturing restructuring program
and the $44.8 million of transitional goodwill impairment
charge, first half 2002 net earnings would have been
$6.7 million, or $0.12 per basic and diluted share. In
the first half last year, Thomas & Betts would have
reported a net loss of $2.5 million or $0.04 loss per
share, when adjusted for the elimination of goodwill.

17



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Segment Results

The Corporation has four reportable segments:
Electrical, Steel Structures, Communications, and HVAC. The
Corporation evaluates each segments profit or loss
performance based on earnings before interest and taxes; foreign
exchange gains and losses; impairments; restructuring; and
certain other charges.



| |           
| | ----------
| | Electrical

Sales for the Electrical segment were
$265.2 million for the second quarter 2002, down 12.2% from
the $302.0 million reported from the same period in 2001.
Excluding divested and discontinued product sales, second
quarter 2002 electrical sales were down 3.5%, due largely to
weak conditions in industrial markets. Year-to-date sales for
the Electrical segment were $521.7 million for 2002, down
14.7% from the $611.7 million for the same period of 2001.
Excluding divested and discontinued product sales, 2002
electrical sales for the year were down 7.4% from 2001.

The Electrical segment recorded a loss of
$0.8 million for the second quarter 2002 versus earnings of
$4.0 million in the year-ago period. Excluding
$13.4 million in costs associated with the manufacturing
restructuring program, the segment would have reported earnings
of $12.6 million in the most recent quarter. On a
comparable basis, the second quarter 2001 earnings would have
been $7.4 million if goodwill amortization had not been
recorded in the prior year. Year-to-date earnings for the
Electrical segment were $1.9 million for 2002 and
$4.9 million for 2001. Excluding $24.4 million in 2002
manufacturing restructuring program costs and $6.1 million
in 2001 goodwill amortization, the six month Electrical segment
earnings would reflect $26.3 million for 2002 and
$11.0 million for 2001.

The improvement in underlying adjusted Electrical
segment performance is due to the impact of a new pricing
schedule, lower manufacturing and freight costs and lower
SG&A.



| |                 
| | ----------------
| | Steel Structures

Second quarter 2002 sales in the Steel Structures
segment were $33.6 million compared to $36.3 million
in the year-ago period. The year-to-date segment sales decreased
to $68.7 million for 2002 from $69.7 million for 2001.

Steel Structures segment earnings were
$4.9 million compared to $5.1 million recorded in the
second quarter last year. Year-to-date segment earnings were
$8.8 million for 2002 and $8.7 million for 2001. On a
comparable basis if goodwill amortization had not been recorded
in the prior year, the earnings for 2001 would have been
$5.6 million and $9.7 million for the quarter and
six-month periods, respectively. The decline in segment sales
and earnings is due largely to the timing and mix of certain
projects.



| |               
| | --------------
| | Communications

The Corporations Communications segment
reported sales of $23.4 million in the second quarter 2002,
down 15.3% from the second quarter 2001. For the six-month
period, the segment reported sales of $52.7 million for
2002 versus $55.9 million for 2001.

This segment recorded a $0.3 million loss in
the quarter compared to a $2.8 million loss in the
year-earlier period. The year-to-date segment results reflect
earnings of $3.8 million for 2002 versus a loss of
$5.9 million for the same period in 2001. The significant
improvement in earnings is due largely to tight operating and
expense controls implemented last year in response to very weak
market conditions and the cessation of depreciation on assets
held for sale which had a positive impact on segment and
consolidated results of $2.0 million and $3.9 million,
respectively, for the quarter and six months ended June 30,
2002. Although the Corporation has significantly reduced costs
in the segment, telecommunications and broadband markets remain
severely depressed.

18



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##### Table of Contents





| |     
| | ----
| | HVAC

Sales in the HVAC segment were $19.2 million
for the second quarter 2002, flat with the year-earlier period.
Year-to-date segment sales decreased to $40.3 million for
2002 from $45.1 million for 2001. The continued recession
in commercial and industrial markets negatively affected segment
sales.

HVAC segment earnings of $0.2 million in the
current year quarter compares with a loss of $1.3 million
in the prior year period. Segment earnings were
$1.4 million in the current year-to-date period versus a
loss of $0.4 million in the prior year period. On a
comparable basis, if goodwill amortization had not been recorded
in the prior year, the second quarter loss for 2001 would have
been $1.0 million and the year-to-date earnings for 2001
would have been $0.3 million. Adjusted segment earnings
improved largely due to cost improvements.

Critical Accounting Policies

The preparation of financial statements contained
in this Report requires the use of estimates and assumptions to
determine certain amounts reported as net sales, costs,
expenses, assets or liabilities and certain amounts disclosed as
contingent assets or liabilities. There can be no assurance that
actual results will not differ from those estimates or
assumptions. The Corporations significant accounting
policies are described in Note 1 of the Notes to
Consolidated Financial Statements in the Corporations
Annual Report on Form 10-K for the fiscal period ended
December 30, 2001. Management believes the
Corporations most critical accounting policies include:
Revenue Recognition; Inventory Valuation; Impairment of
Long-Lived Assets; Income Taxes; and Environmental Costs.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenue Recognition:The Corporation recognizes revenue in
    accordance with the Securities and Exchange Commissions
    Staff Accounting Bulletin No. 101. The Corporation
    recognizes revenue when finished products are shipped to
    unaffiliated customers and both title and risks of ownership are
    transferred. Sales discounts, quantity and price rebates,
    allowances and warranty costs are estimated based on contractual
    commitments and experience and recorded in the period in which
    the sale is recognized. Certain customers have the right to
    return goods under certain circumstances and those returns,
    which are reasonably estimable, are accrued at the time of
    shipment. Management analyzes historical returns and allowances,
    current economic trends and specific customer circumstances when
    evaluating the adequacy of accounts receivable related reserves
    and accruals.                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Inventory Valuation:The Corporation periodically evaluates
    the carrying value of its inventories to ensure they are carried
    at the lower of cost or market. Such evaluation is based on
    managements judgment and use of estimates. Such estimates
    incorporate inventory quantities on-hand, sales forecasts and
    gross margins for particular product groupings, planned
    dispositions of product lines and overall industry trends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Impairment of Long-Lived Assets:The Corporation follows the provisions
    of Statement of Financial Accounting Standards
    (SFAS) No. 142, Goodwill and Other
    Intangible Assets. SFAS No. 142 requires a
    transitional and annual test of goodwill associated with
    reporting units for indications of impairment. Under the
    provisions of SFAS No. 142, during the second quarter 2002
    the Corporation was required to identify its reporting units,
    determine the fair value of each reporting unit as of
    December 31, 2001, and compare the fair value to the
    reporting units carrying amount as of December 31,
    2001. To the extent a reporting units carrying amount
    exceeds its fair value, an indication exists that the reporting
    units goodwill may be impaired and the Corporation must
    perform a second more detailed impairment assessment. The second
    impairment assessment involves allocating the reporting
    units fair value to all of its recognized and unrecognized
    assets and liabilities in order to determine the implied fair
    value of the reporting units goodwill as of the assessment
    date. The implied fair value of the reporting units
    goodwill is then compared to the carrying amount of goodwill to
    quantify an impairment charge as of the assessment date.



| |                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Subsequent to the adoption, all the above
    procedures must also be updated prior to the Corporations
    2002 year-end to determine if an indication exists during
    2002 that a reporting units goodwill has become impaired
    since the adoption date and, if applicable, to quantify an
    impairment charge during

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2002. An impairment charge as of adoption is
    recognized net of tax as the cumulative effect of an accounting
    change in the statement of operations as of the beginning of
    2002. An impairment charge, if any, subsequent to the adoption
    would be recorded to operating income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | Effective December 31, 2001, the Corporation
    adopted SFAS No. 142. During the second quarter 2002, the
    Corporation completed its transitional impairment assessment for
    indications of impairment as of December 31, 2001. No
    indications of impairment were noted for any reporting units
    within the Corporations segments, except within the HVAC
    segment. A second more detailed impairment assessment involving
    the implied fair value of goodwill resulted in a net-of-tax,
    non-cash charge of $44.8 million associated with the
    Corporations HVAC segment. As required, this transitional
    charge has been recorded as a cumulative effect of an accounting
    change in the Corporations consolidated statement of
    operations for the first quarter of 2002. In the future, the
    Corporation expects to complete its annual impairment assessment
    in the fourth quarter of each year; unless circumstances dictate
    more frequent assessments.                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | The Corporation also follows the provisions of
    SFAS No. 144, Accounting for the Impairment or
    Disposal of Long-Lived Assets. SFAS No. 144
    establishes accounting standards for the impairment of
    long-lived assets such as property, plant and equipment and
    certain intangible assets. For purposes of recognizing and
    measuring impairment of long-lived assets, the Corporation
    evaluates assets for associated product groups. The Corporation
    reviews long-lived assets to be held and used for impairment
    whenever events or changes in circumstances indicate that the
    carrying amount of the assets may not be recoverable. If the sum
    of the undiscounted expected future cash flows over the
    remaining useful life of the primary asset in the associated
    product groups is less than the carrying amount of the assets,
    the assets are considered to be impaired. Impairment losses are
    measured as the amount by which the carrying amount of the
    assets exceeds the fair value of the assets. When fair values
    are not available, the Corporation estimates fair value using
    the expected future cash flows discounted at a rate commensurate
    with the risks associated with the recovery of the assets.
    Assets to be disposed of are reported at the lower of carrying
    amount of fair value less costs to sell.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Income Taxes:The
    Corporation uses the asset and liability method of accounting
    for income taxes. That method recognizes the expected future tax
    consequences of temporary differences between book and tax bases
    of assets and liabilities and provides a valuation allowance
    based on a more-likely-than-not criteria. The Corporation has
    valuation allowances for deferred tax assets primarily
    associated with state operating loss carryforwards, tax credit
    carryforwards and deferred state income tax assets. Realization
    of the deferred tax assets is dependent upon the
    Corporations ability to generate sufficient future taxable
    income and, if necessary, execution of its tax planning
    strategies. Management believes that it is more-likely-than-not
    that future taxable income, based on enacted tax law in effect
    as of June 30, 2002, will be sufficient to realize the
    recorded deferred tax assets net of existing valuation
    allowances. Management considers the scheduled reversal of
    deferred tax liabilities, projected future taxable income and
    tax planning strategies, which involve estimates and
    uncertainties, in making this assessment. Tax planning
    strategies include primarily sales of non-core assets. Projected
    future taxable income is based on managements forecast of
    the operating results of the Corporation. Management
    periodically reviews such forecasts in comparison with actual
    results and expected trends. In the event management determines
    that sufficient future taxable income, in light of tax planning
    strategies, may not be generated to fully realize net deferred
    tax assets, the Corporation will increase valuation allowances
    by a charge to income tax expense in the period of such
    determination.
|
| |  | Environmental Costs:Environmental expenditures that relate
    to current operations are expensed or capitalized, as
    appropriate. Remediation costs that relate to an existing
    condition caused by past operations are accrued when it is
    probable that those costs will be incurred and can be reasonably
    estimated based on evaluations of current available facts
    related to each site.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

20



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Liquidity and Capital Resources

For the six months ended June 30, 2002, the
Corporations cash and cash equivalents decreased to
$205.6 million from $234.8 million at
December 30, 2001. The decrease resulted from
$51.5 million used in investing activities and
$7.7 million used in financing activities which was offset
by $26.5 million provided by operating activities.



| |                     
| | --------------------
| | Operating Activities

Operating activities provided cash of
$26.5 million in the first six months of 2002 as compared
to cash provided by operating activities of $33.6 million for
the year-ago period. The decrease is primarily a result of a
significant reduction of accounts receivable during the prior
year period. The cash provided by operations in 2002 was
primarily attributable to a reduction in inventories. Operating
activities for 2002 also reflect the positive impact of
$46 million of cash tax refunds received which were offset
by a $20 million payment for a previously announced patent
lawsuit settlement and $26.1 million of costs incurred for
the manufacturing consolidation and efficiency program.

Working capital as of June 30, 2002 was
$412.7 million compared with $414.6 million as of
December 30, 2001. At June 30, 2002, accounts
receivable were $195.1 million as compared to
$188.2 million at the end of the fourth quarter 2001. As of
June 30, 2002, Days Sales Outstanding had improved nearly
20% on a year-over-year basis. The Corporation has also
maintained its focus on effectively managing inventory.
Inventory levels were $186.2 million at the end of the
second quarter 2002 versus $192.1 million as of
December 30, 2001.

During the fourth quarter 2001, the Corporation
recorded an expense of $27 million for settlement of a patent
infringement lawsuit. The Corporation paid $20 million
related to this settlement in the first quarter of 2002 and the
remaining $7 million will be paid in the fourth quarter of
2002.

The Corporation became eligible to receive
approximately $65 million in cash tax refunds as a result
of the Corporations decision to extend the carryback
period for net operating losses from two to five years as
allowed under the Job Creation and Worker Assistance Act of
2002. During the second quarter 2002, the Corporation received
approximately $46 million. As of June 30, 2002, the
Corporation had approximately $19 million of remaining
income tax refunds which were received in late July 2002.



| |                     
| | --------------------
| | Investing Activities

The Corporation acquired $43.3 million of
marketable securities during the first six months of 2002. Of
the total securities acquired, approximately $20 million of
investments are pledged to secure letters of credit relating to
certain tax refunds. The Corporation had proceeds from matured
marketable securities of approximately $2.0 million during
2002 as compared to $0.7 million of proceeds for the same
period in 2001.

During the first half of 2002, the Corporation
had capital expenditures totaling $11.9 million, down from
$19.3 million for the same period in 2001. The Corporation
intends to continue to tightly manage capital expenditures. For
the year 2002, capital expenditures, including approximately
$15 million of expenditures associated with the Electrical
segments manufacturing efficiency and consolidation
initiatives, are projected to be $30 to $35 million, down
from earlier estimates of $35 to $45 million.

Investing activities for 2002 include proceeds of
$1.7 million for the sale of property, plant and equipment
and resulted in a gain of $1.7 million which has been
reflected in other (expense) income  net in the
accompanying Condensed Consolidated Statement of Operations.
Proceeds from divestitures of businesses for 2001 of
$6.0 million relate primarily to the February 2001 sale of
the Corporations copper and zinc ground rods product line.



| |                     
| | --------------------
| | Financing Activities

At June 30, 2002, net debt (total debt less
cash, cash equivalents and marketable securities) was
$414.5 million, down from the net debt total of
$430.2 million as of December 30, 2001. Financing
activities

21



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##### Table of Contents



used cash during the first half of 2002 to repay
approximately $8.0 million of debt. This compares to the
first half of 2001 when $20.5 million was used to repay
debt and $32.5 million was used to pay dividends. As of
June 30, 2002, the Corporation has current maturities of
long-term debt of $110.7 million. Of the current total
debt,
50 million
Euro (approximately US$48 million as of June 30, 2002)
is due November 2002 and $60 million is due February 2003.




| |                  
| | -----------------
| | Credit Facilities

The Corporation has a $100 million committed
revolving credit facility with a bank group which is secured by,
among other things, inventory and equipment located in the
United States. Availability under the facility as of
June 30, 2002 was $46 million before considering
outstanding letters of credit of $35 million at
June 30, 2002. This credit facility is subject to, among
other things, limitations on equipment disposals, additional
debt, liens and movement of equipment, and minimum liquidity
requirements. This facility matures in November 2003. There were
no borrowings outstanding under this facility as of
June 30, 2002.

The Corporation has a committed revolving credit
facility with a Canadian bank which had availability as of
June 30, 2002 of approximately C$30 million
(approximately US$20 million as of June 30, 2002).
This facility is secured by inventory and accounts receivable
located in Canada. This facility matures in March 2004. There
were no borrowings outstanding under this facility as of
June 30, 2002.

The Corporation has the option, at the time of
drawing funds under either of the facilities discussed above, of
selecting an interest rate based on a number of benchmarks
including LIBOR, the federal funds rate, or the prime rate of
the agent bank.

The credit facilities contain standard covenants
restricting investments, liens, debt, dispositions of
collateral, and the payment of dividends, unless certain
conditions are met. Also included are financial covenants
regarding minimum liquidity and capital expenditures. The credit
facilities contain standard events of default such as covenant
default and cross-default. The Corporation is in compliance with
all covenants or other requirements set forth in its credit
agreements. Further, the Corporation does not have any rating
downgrade triggers that would accelerate the maturity dates of
its debt. However, a downgrade in the Corporations credit
rating could adversely affect the Corporations ability to
renew existing, or obtain access to new, credit facilities in
the future and could increase the cost of such facilities.



| |                          
| | -------------------------
| | Off-Balance Sheet Program

In September 2001, the Corporation established an
asset-securitization program. The program permits the
Corporation to continually sell accounts receivable through
September 21, 2002, to a maximum of $120 million as
needed as a source of liquidity. As of June 30, 2002,
availability under this facility was approximately
$72 million. The amount of accounts receivable sold from
time to time depends on the level of eligible accounts
receivable and restrictions on concentrations of receivables. At
June 30, 2002, no receivables have been sold under this
program.

Except for the asset securitization program
described in the preceding paragraph, at June 30, 2002, the
Corporation did not have any other relationships with
unconsolidated entities or financial partnerships (often
referred to as structured finance or special purpose entities)
which were established for the purpose of facilitating
off-balance sheet arrangements or other contractually narrow or
limited purposes.



| |      
| | -----
| | Other

Total dividends paid to shareholders were
$32.5 million for the first six months of 2001. On
July 24, 2001, the Corporations Board of Directors
approved a change in the Corporations dividend payment
practices and elected to retain its future earnings to fund the
development and growth of its business. The Corporation does not
presently anticipate declaring any cash dividends on the
Corporations common stock in the foreseeable future.
Future decisions concerning the payment of cash dividends on the
Corporations common stock will depend upon its results of
operations, financial condition, capital expenditure plans and
other factors that the Board of Directors may consider relevant.
The Corporations revolving credit agreements contain
provisions

22



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##### Table of Contents



that could restrict, as a practical matter, the
Corporations ability to pay dividends during the term of
those agreements.


Including the asset-securitization facility
discussed above, the Corporations aggregate availability
of funds as of June 30, 2002 is approximately
$138 million before considering outstanding letters of
credit. Availability under the revolving credit facilities and
the asset-securitization facility increases or decreases with
fluctuations in the value of the underlying collateral and is
subject to the satisfaction of various covenants. These are back
up facilities which the Corporation currently does not expect to
utilize in the foreseeable future.

As a result of the current operating results, the
Corporation may not be able to access the public capital markets
on acceptable terms or rates or in a timely manner and future
borrowings could be at higher rates or on more stringent terms.
The Corporation currently expects to fund expenditures for
capital requirements as well as other liquidity needs from a
combination of existing cash balances, cash generated from
operations, and proceeds from assets held for sale. These
sources should be sufficient to meet the Corporations
operating needs for the foreseeable future.

2002 Outlook

Management expects third quarter 2002 sales to be
down approximately ten percent on an absolute basis and down
approximately five percent excluding divested and discontinued
products on a year-over-year basis. Assuming economic recovery
in the electrical industry occurs during the second half of
2002, managements goal is to achieve low double-digit
operating earnings in the fourth quarter 2002.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

This Report includes various forward-looking
statements regarding the Corporation which are subject to risks
and uncertainties. Forward-looking statements include
information concerning future results of operations and
financial condition. Statements that contain words such as
believes, expects,
anticipates, intends,
estimates, continue, should,
could, may, plan,
project, predict, will or
similar expressions are forward-looking statements. These
forward-looking statements are subject to risks and
uncertainties, and many factors could affect the future
financial results of the Corporation. Accordingly, actual
results may differ materially from those expressed or implied by
the forward-looking statements contained in this Report. For
those statements, the Corporation claims the protection of the
safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.

There are many factors that could cause actual
results to differ materially from those in forward-looking
statements, some of which are beyond the control of the
Corporation. These factors include, but are not limited to:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Economic weakness and recession in the
    U.S. or the Corporations other main markets,
    including Canada and Western Europe;                                                                                                                                                                                                                                                                                  
|
| |  | Effects of significant changes in monetary or
    fiscal policies in the U.S. and abroad which could result in
    major currency fluctuations, including fluctuations in the
    Canadian dollar, Euro and British pound;                                                                                                                                                                                         
|
| |  | Significant changes in governmental policies
    domestically and abroad which could create trade restrictions,
    patent enforcement issues, adverse tax-rate changes and changes
    to tax treatment of items such as tax credits, withholding
    taxes, transfer pricing and other income and expense recognition
    for tax purposes, including changes in taxation of income
    generated in Puerto Rico;
|
| |  | Changes in environmental regulations and
    projected remediation technology advances that could impact
    expectations of remediation expenses;                                                                                                                                                                                                                                                                 
|
| |  | Undiscovered liabilities arising from past
    acquisitions and dispositions of businesses;                                                                                                                                                                                                                                                                                                                        
|
| |  | Unexpected liabilities resulting from pending or
    future legal matters and risks associated with the coverage and
    cost of insurance;                                                                                                                                                                                                                                                                        

23



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| |   |                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Availability and pricing of commodities and raw
    materials, especially steel, needed for the production of the
    Corporations products;                                                                                                                                                                                                       
|
| |  | Changes in customer demand for various products
    of Thomas & Betts that could affect its overall product
    mix, margins, plant utilization levels and asset valuations or
    simultaneous disruptions with a group of large customers;                                                                                                        
|
| |  | Changes in creditworthiness of major customers
    and suppliers;                                                                                                                                                                                                                                                                                   
|
| |  | The recoverability of long-lived assets, which
    could be impacted if the estimated future operating cash flows
    are not achieved; and                                                                                                                                                                                                         
|
| |  | Failure to achieve estimated savings net of
    estimated costs in connection with, and unforeseen difficulties
    or time delays implementing, the Corporations
    comprehensive program to streamline production, improve
    productivity and reduce costs in its U.S., European and Mexican
    electrical products manufacturing facilities.

The Corporation undertakes no obligation to
revise the forward-looking statements included in this Report to
reflect any future events or circumstances. The
Corporations actual results, performance or achievements
could differ materially from the results expressed in, or
implied by, these forward-looking statements.

For additional information about business risks
facing the Corporation, investors should review Part I,
Item 7  Managements Discussion and
Analysis of Financial Condition and Results of
Operations  Business Risks of the
Corporations Annual Report on Form 10-K for the
fiscal period ended December 30, 2001.




ITEM 3.     QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For the period ended June 30, 2002, the
Corporation did not experience any material changes in market
risk disclosure that affect the quantitative and qualitative
disclosures presented in its Annual Report on Form 10-K for
the fiscal period ended December 30, 2001.




PART II. OTHER INFORMATION




ITEM 1.     LEGAL
PROCEEDINGS

See Note 14, Contingencies, in
the Notes to Condensed Consolidated Financial Statements
included herein.

24



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|        |                                                        
|------- | -------------------------------------------------------
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS

The matters which were voted upon at the
Registrants Annual Meeting of Shareholders held on
May 1, 2002, and the results of the voting are set forth
below:

|   |  |                       |  |     |            |          |  |  |         | 
|-- |  | --------------------- |  | --- | ---------- | -------- |  |  | ------- | 
|   |  | Nominees for Director |  | For |            | Withheld
|1. |  |                       |  |     |            |         
|   |  | Ernest H. Drew        |  |     | 49,838,835 |          |  |  | 444,068 | 
|   |  | T. Kevin Dunnigan     |  |     | 49,838,933 |          |  |  | 443,970 | 
|   |  | Jeananne K. Hauswald  |  |     | 49,846,374 |          |  |  | 436,529 | 
|   |  | Dean Jernigan         |  |     | 49,836,213 |          |  |  | 446,690 | 
|   |  | Ronald B. Kalich, Sr. |  |     | 49,838,905 |          |  |  | 443,998 | 
|   |  | Robert A. Kenkel      |  |     | 49,819,856 |          |  |  | 463,047 | 
|   |  | Kenneth R. Masterson  |  |     | 49,843,067 |          |  |  | 439,836 | 
|   |  | Jean-Paul Richard     |  |     | 49,843,038 |          |  |  | 439,865 | 
|   |  | Jerre L. Stead        |  |     | 49,843,372 |          |  |  | 439,531 | 
|   |  | William H. Waltrip    |  |     | 49,838,241 |          |  |  | 444,662 | 

|   |  |                                                                                                                                                                                                           |  |  |  |  |  |  |  | 
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|  
|2. |  | A proposal to ratify the appointment of
    KPMG LLP as independent public accountants
    received 49,467,299 votes for and 611,529 votes against,
    with 204,075 abstentions and no broker non-votes. |  |  |  | 




ITEM 5.     OTHER
INFORMATION

(a) See Cautionary Statement Regarding
Forward-Looking Statements included in Item 2 hereof.




ITEM 6.     EXHIBITS
AND REPORTS ON FORM 8-K

(a) The following exhibits are filed as part
of this Report:

| |      |  |  |                                                                                                                                                                                                                                                                       
| | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 |  |  | Second Amendment to Credit and Security
    Agreement, dated June 21, 2002, among the Corporation, as
    borrower, the Lenders listed therein and Wachovia Bank, N.A.,
    as agent.                                                                                 
| | 10.2 |  |  | First Amendment to Receivables Purchase
    Agreement, dated as of June 12, 2002, among TBSPV, Inc., as
    seller, the Corporation, as master servicer, Blue Ridge Asset
    Funding Corporation, as purchaser and Wachovia Bank, N.A., as
    administrative agent. 
| | 10.3 |  |  | Second Amendment to Receivables Purchase
    Agreement, dated as of June 19, 2002, among TBSPV, Inc., as
    seller, the Corporation, as master servicer, Blue Ridge Asset
    Funding Corporation, as purchaser and Wachovia Bank, N.A., as
    administrative agent.
| | 12   |  |  | Statement re Computation of Ratio of Earnings to
    Fixed Charges                                                                                                                                                                                                    
| | 99.1 |  |  | Certification of Chief Executive Officer Pursuant
    to 18 U.S.C. §1350 as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                    
| | 99.2 |  |  | Certification of Chief Financial Officer Pursuant
    to 18 U.S.C. §1350 as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                    

(b) Reports on Form 8-K



| |                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 25, 2002, the Corporation filed a
    Current Report on Form 8-K, Items 5, 7 and 9,
    commenting on its financial results for the first fiscal quarter
    of 2002.

25



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SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Corporation has duly caused this
Report to be signed on its behalf by the undersigned thereunto
duly authorized.



| |                           
| | --------------------------
| | THOMAS & BETTS CORPORATION
| | (Registrant)              



| |     |                   
| | --- | ------------------
| | By: | /s/ JOHN P. MURPHY

| |                          
| | -------------------------
| |                          
| | John P. Murphy           
| | Senior Vice President and
| | Chief Financial Officer  

Date: August 12, 2002

26



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EXHIBIT INDEX

| |      |  |  |                                                                                                                                                                                                                                                                       
| | ---- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 |  |  | Second Amendment to Credit and Security
    Agreement, dated June 21, 2002, among the Corporation, as
    borrower, the Lenders listed therein and Wachovia Bank, N.A.,
    as agent.                                                                                 
| | 10.2 |  |  | First Amendment to Receivables Purchase
    Agreement, dated as of June 12, 2002, among TBSPV, Inc., as
    seller, the Corporation, as master servicer, Blue Ridge Asset
    Funding Corporation, as purchaser and Wachovia Bank, N.A., as
    administrative agent. 
| | 10.3 |  |  | Second Amendment to Receivables Purchase
    Agreement, dated as of June 19, 2002, among TBSPV, Inc., as
    seller, the Corporation, as master servicer, Blue Ridge Asset
    Funding Corporation, as purchaser and Wachovia Bank, N.A., as
    administrative agent.
| | 12   |  |  | Statement re Computation of Ratio of Earnings to
    Fixed Charges                                                                                                                                                                                                    
| | 99.1 |  |  | Certification of Chief Executive Officer Pursuant
    to 18 U.S.C. §1350 as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                    
| | 99.2 |  |  | Certification of Chief Financial Officer Pursuant
    to 18 U.S.C. §1350 as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.