##### Table of Contents



10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended June 30, 2008
 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 1-31330
 Cooper Industries, Ltd.
 
  Bermuda
    
    98-0355628(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)600 Travis, Suite 5600
    
    Houston, Texas 77002(Address of principal executive offices)
    
    (Zip Code)
  
  
   þ o
  Large accelerated filer
þ   
    Accelerated filer
o
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity SecuritiesItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSignaturesExhibit IndexComputation of Ratio of Earnings to Fixed ChargesCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906Certification Pursuant to Section 906    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 COOPER INDUSTRIES, LTD.
CONSOLIDATED INCOME STATEMENTS
(unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions, except per share data)Revenues
    
    $
    1,724.3
    
    
    $
    1,463.7
    
    
    $
    3,270.4
    
    
    $
    2,857.7Cost of sales
    
    
    1,163.5
    
    
    
    984.6
    
    
    
    2,185.7
    
    
    
    1,929.5Selling and administrative expenses
    
    
    314.4
    
    
    
    269.1
    
    
    
    615.9
    
    
    
    524.5Operating earnings
    
    
    246.4
    
    
    
    210.0
    
    
    
    468.8
    
    
    
    403.7Income from Belden agreement
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3Interest expense, net
    
    
    18.3
    
    
    
    12.9
    
    
    
    33.2
    
    
    
    25.8Income before income taxes
    
    
    228.1
    
    
    
    200.4
    
    
    
    435.6
    
    
    
    381.2Income taxes (benefits)
    
    
    66.2
    
    
    
    (8.8
    )
    
    
    120.3
    
    
    
    40.1Net income
    
    $
    161.9
    
    
    $
    209.2
    
    
    $
    315.3
    
    
    $
    341.1Net income per common share:Basic
    
    $
    .93
    
    
    $
    1.14
    
    
    $
    1.79
    
    
    $
    1.86Diluted
    
    $
    .92
    
    
    $
    1.12
    
    
    $
    1.77
    
    
    $
    1.83Cash dividends declared per common share
    
    $
    .25
    
    
    $
    .21
    
    
    $
    .50
    
    
    $
    .42
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COOPER INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2008
    
    
    2007(unaudited)
    
    
    (Note 1)(in millions)ASSETSCash and cash equivalents
    
    $
    154.7
    
    
    $
    232.8Investments
    
    
    51.3
    
    
    
    93.7Receivables
    
    
    1,230.9
    
    
    
    1,048.6Inventories
    
    
    749.5
    
    
    
    643.7Deferred income taxes and other current assets
    
    
    270.0
    
    
    
    284.2Total current assets
    
    
    2,456.4
    
    
    
    2,303.0Restricted cash
    
    
    
    
    
    
    290.1Property, plant and equipment, less accumulated depreciation
    
    
    768.5
    
    
    
    719.8Goodwill
    
    
    2,741.8
    
    
    
    2,540.3Other noncurrent assets
    
    
    382.0
    
    
    
    280.3Total assets
    
    $
    6,348.7
    
    
    $
    6,133.5LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt
    
    $
    114.3
    
    
    $
    256.1Accounts payable
    
    
    573.6
    
    
    
    533.1Accrued liabilities
    
    
    565.4
    
    
    
    566.7Current discontinued operations liability
    
    
    191.3
    
    
    
    179.1Current maturities of long-term debt
    
    
    0.1
    
    
    
    100.1Total current liabilities
    
    
    1,444.7
    
    
    
    1,635.1Long-term debt
    
    
    1,207.5
    
    
    
    909.9Postretirement benefits other than pensions
    
    
    80.6
    
    
    
    81.4Long-term discontinued operations liability
    
    
    330.0
    
    
    
    330.0Other long-term liabilities
    
    
    423.0
    
    
    
    335.2Total liabilities
    
    
    3,485.8
    
    
    
    3,291.6Common stock, $.01 par value
    
    
    1.7
    
    
    
    1.8Capital in excess of par value
    
    
    
    
    
    
    85.7Retained earnings
    
    
    2,907.3
    
    
    
    2,835.1Accumulated other nonowner changes in equity
    
    
    (46.1
    )
    
    
    (80.7
    )Total shareholders equity
    
    
    2,862.9
    
    
    
    2,841.9Total liabilities and shareholders equity
    
    $
    6,348.7
    
    
    $
    6,133.5
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COOPER INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Six Months EndedJune 30,2008
    
    
    2007(in millions)Cash flows from operating activities:Net income
    
    $
    315.3
    
    
    $
    341.1Adjustments to reconcile to net cash provided by operating activities:Depreciation and amortization
    
    
    70.3
    
    
    
    57.8Deferred income taxes
    
    
    4.9
    
    
    
    5.9Excess tax benefits from stock options and awards
    
    
    (3.4
    )
    
    
    (20.8
    )Changes in assets and liabilities: (1)Receivables
    
    
    (122.2
    )
    
    
    (133.5
    )Inventories
    
    
    (63.4
    )
    
    
    (25.2
    )Accounts payable and accrued liabilities
    
    
    (13.1
    )
    
    
    (24.7
    )Other assets and liabilities, net
    
    
    76.9
    
    
    
    8.7Net cash provided by operating activities
    
    
    265.3
    
    
    
    209.3Cash flows from investing activities:Proceeds from short-term investments
    
    
    41.3
    
    
    
    Proceeds from cash restricted for business acquisitions
    
    
    290.1
    
    
    
    Capital expenditures
    
    
    (57.9
    )
    
    
    (56.1
    )Cash paid for acquired businesses
    
    
    (269.6
    )
    
    
    (170.5
    )Proceeds from sales of property, plant and equipment and other
    
    
    1.0
    
    
    
    0.8Net cash provided by (used in) investing activities
    
    
    4.9
    
    
    
    (225.8
    )Cash flows from financing activities:Proceeds from issuance of debt
    
    
    297.6
    
    
    
    306.7Debt issuance costs
    
    
    (0.5
    )
    
    
    (2.7
    )Proceeds from debt derivatives
    
    
    0.5
    
    
    
    10.0Repayments of debt
    
    
    (299.1
    )
    
    
    (3.0
    )Dividends
    
    
    (82.8
    )
    
    
    (77.9
    )Purchase of common shares
    
    
    (282.9
    )
    
    
    (74.0
    )Excess tax benefits from stock options and awards
    
    
    3.4
    
    
    
    20.8Proceeds from exercise of stock options
    
    
    10.8
    
    
    
    49.5Net cash provided by (used in) financing activities
    
    
    (353.0
    )
    
    
    229.4Effect of exchange rate changes on cash and cash equivalents
    
    
    4.7
    
    
    
    3.6Increase (decrease) in cash and cash equivalents
    
    
    (78.1
    )
    
    
    216.5Cash and cash equivalents, beginning of period
    
    
    232.8
    
    
    
    423.5Cash and cash equivalents, end of period
    
    $
    154.7
    
    
    $
    640.0
 
 (1)
    
    Net of the effects of acquisitions and translation.  -4-




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COOPER INDUSTRIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 Note 1. Accounting Policies
 Basis of Presentation
  Fair Value Measurements
 The
Fair Value Option for Financial Assets and Financial Liabilities
 Business Combinations Business Combinations
 -5-




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Noncontrolling Interests in Consolidating Financial Statements Consolidated and Separate Financial Statements
 Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.
133 Accounting for
Derivative Instruments and Hedging Activities
 Note 2. Stock-Based Compensation
  Note 3. Acquisitions
    -6-




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MTL
    
    
    Other
    
    
    Total(in millions)Receivables
    
    $
    43.0
    
    
    $
    0.7
    
    
    $
    43.7Inventories
    
    
    32.2
    
    
    
    0.4
    
    
    
    32.6Property, Plant and Equipment
    
    
    41.7
    
    
    
    1.5
    
    
    
    43.2Goodwill
    
    
    177.3
    
    
    
    0.7
    
    
    
    178.0Other intangible assets
    
    
    100.5
    
    
    
    0.4
    
    
    
    100.9Accounts payable
    
    
    (12.4
    )
    
    
    (0.2
    )
    
    
    (12.6
    )Short-term debt
    
    
    (56.6
    )
    
    
    
    
    
    
    (56.6
    )Other assets and liabilities, net
    
    
    (68.0
    )
    
    
    (0.1
    )
    
    
    (68.1
    )Net cash consideration
    
    $
    257.7
    
    
    $
    3.4
    
    
    $
    261.1
   (in millions)Receivables
    
    $
    58.0Inventories
    
    
    48.8Property, Plant and Equipment
    
    
    41.7Goodwill
    
    
    183.0Other intangible assets
    
    
    122.3Accounts payable
    
    
    (36.5
    )Other assets and liabilities, net
    
    
    (72.8
    )Net cash consideration
    
    $
    344.5
  -7-




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Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007(in millions, except per share amounts)Revenues
    
    $
    1,724.3
    
    
    $
    1,558.6
    
    
    $
    3,289.7
    
    
    $
    3,048.2Net income
    
    $
    161.9
    
    
    $
    210.5
    
    
    $
    314.5
    
    
    $
    338.3Diluted earnings per share
    
    $
    .92
    
    
    $
    1.13
    
    
    $
    1.77
    
    
    $
    1.81
 Note 4. Inventories
 June 30,
    
    
    December 31,2008
    
    
    2007(in millions)Raw materials
    
    $
    252.3
    
    
    $
    221.5Work-in-process
    
    
    199.7
    
    
    
    178.8Finished goods
    
    
    467.4
    
    
    
    396.2Perishable tooling and supplies
    
    
    14.6
    
    
    
    15.0934.0
    
    
    
    811.5Allowance for excess and obsolete inventory
    
    
    (84.5
    )
    
    
    (77.9
    )Excess of current standard costs over LIFO costs
    
    
    (100.0
    )
    
    
    (89.9
    )Net inventories
    
    $
    749.5
    
    
    $
    643.7
 Note 5. Debt
   Note 6. Shareholders Equity
  -8-




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Note 7. Segment Information
 RevenuesThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Electrical Products
    
    $
    1,510.0
    
    
    $
    1,272.3
    
    
    $
    2,871.6
    
    
    $
    2,482.9Tools
    
    
    214.3
    
    
    
    191.4
    
    
    
    398.8
    
    
    
    374.8Total revenues
    
    $
    1,724.3
    
    
    $
    1,463.7
    
    
    $
    3,270.4
    
    
    $
    2,857.7
 Operating EarningsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Electrical Products
    
    $
    259.0
    
    
    $
    213.9
    
    
    $
    482.5
    
    
    $
    407.4Tools
    
    
    14.7
    
    
    
    21.6
    
    
    
    31.9
    
    
    
    43.4Segment operating earnings
    
    
    273.7
    
    
    
    235.5
    
    
    
    514.4
    
    
    
    450.8General Corporate expense
    
    
    27.3
    
    
    
    25.5
    
    
    
    45.6
    
    
    
    47.1Total operating earnings
    
    
    246.4
    
    
    
    210.0
    
    
    
    468.8
    
    
    
    403.7Income from Belden agreement
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3Interest expense, net
    
    
    18.3
    
    
    
    12.9
    
    
    
    33.2
    
    
    
    25.8Income before income taxes
    
    $
    228.1
    
    
    $
    200.4
    
    
    $
    435.6
    
    
    $
    381.2
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Note 8. Pension and Other Postretirement Benefits
 Pension BenefitsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Components of net periodic benefit cost:Service cost
    
    $
    .9
    
    
    $
    1.0
    
    
    $
    1.9
    
    
    $
    2.0Interest cost
    
    
    10.6
    
    
    
    10.2
    
    
    
    21.1
    
    
    
    20.4Expected return on plan assets
    
    
    (12.5
    )
    
    
    (12.8
    )
    
    
    (25.0
    )
    
    
    (25.6
    )Amortization of prior service cost
    
    
    (0.6
    )
    
    
    (0.5
    )
    
    
    (1.1
    )
    
    
    (1.0
    )Recognized actuarial loss
    
    
    2.4
    
    
    
    2.7
    
    
    
    4.8
    
    
    
    5.3Net periodic benefit cost
    
    $
    0.8
    
    
    $
    0.6
    
    
    $
    1.7
    
    
    $
    1.1
 Other Postretirement BenefitsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Components of net periodic benefit cost:Interest cost
    
    $
    1.3
    
    
    $
    1.3
    
    
    $
    2.6
    
    
    $
    2.6Amortization of prior service cost
    
    
    (0.5
    )
    
    
    (0.5
    )
    
    
    (1.0
    )
    
    
    (1.0
    )Recognized actuarial gain
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    (1.2
    )
    
    
    (1.2
    )Net periodic benefit cost
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    0.4
    
    
    $
    0.4
 Note 9. Income Taxes
    -10-




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-11-




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Note 10. Net Income Per Common Share
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Basic:Net income applicable to common stock
    
    $
    161.9
    
    
    $
    209.2
    
    
    $
    315.3
    
    
    $
    341.1Weighted average common shares outstanding
    
    
    174.3
    
    
    
    183.7
    
    
    
    175.7
    
    
    
    183.4Diluted:Net income applicable to common stock
    
    $
    161.9
    
    
    $
    209.2
    
    
    $
    315.3
    
    
    $
    341.1Weighted average common shares outstanding
    
    
    174.3
    
    
    
    183.7
    
    
    
    175.7
    
    
    
    183.4Incremental shares from assumed conversions:Options, performance-based stock
awards and other employee awards
    
    
    2.2
    
    
    
    3.2
    
    
    
    2.2
    
    
    
    3.3Weighted average common shares
and common share equivalents
    
    
    176.5
    
    
    
    186.9
    
    
    
    177.9
    
    
    
    186.7
  Note 11. Net Income and Other Nonowner Changes in Equity
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Net income
    
    $
    161.9
    
    
    $
    209.2
    
    
    $
    315.3
    
    
    $
    341.1Foreign currency translation gains
    
    
    14.0
    
    
    
    12.9
    
    
    
    23.7
    
    
    
    11.8Change in fair value of derivatives
    
    
    (0.5
    )
    
    
    4.2
    
    
    
    10.0
    
    
    
    8.9Net income and other nonowner
changes in equity
    
    $
    175.4
    
    
    $
    226.3
    
    
    $
    349.0
    
    
    $
    361.8
 Note 12. Fair Value Measurement
   -12-




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 
    (a)
    
    Market approach  Prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities;(b)
    
    Income approach  Techniques to convert future amounts to a single present
amount based on market expectations (including present value techniques, option-pricing
and excess earnings models);(c)
    
    Cost approach  Amount that would be required to replace the service capacity
of an asset (replacement cost).
  Assets
    
    LiabilitiesSignificant other
    
    Significant otherobservable inputs
    
    observable inputs
    
    Valuation(in millions)
    
    (Level 2)
    
    (Level 2)
    
    TechniqueShort-term investments
    
    $
    51.3
    
    
    $
    
    
    
    
    (a
    )Currency
forward exchange contracts
    
    
    18.1
    
    
    
    (8.3
    )
    
    
    (a
    )Commodity swaps
    
    
    7.3
    
    
    
    (0.3
    )
    
    
    (a
    )Cross-currency swaps
    
    
    
    
    
    
    (66.8
    )
    
    
    (a
    )
  Note 13. Discontinued Operations Liability
  -13-




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2005
     -14-




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2006
        2007
  -15-




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2008
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Accrual at beginning of period
    
    $
    519.1
    
    
    $
    559.5
    
    
    $
    509.1
    
    
    $
    529.6Indemnity and defense payments
    
    
    (6.7
    )
    
    
    (15.8
    )
    
    
    (11.9
    )
    
    
    (24.6
    )Insurance recoveries
    
    
    9.6
    
    
    
    
    
    
    
    25.4
    
    
    
    39.3Other
    
    
    (0.7
    )
    
    
    (0.7
    )
    
    
    (1.3
    )
    
    
    (1.3
    )Accrual at end of period
    
    $
    521.3
    
    
    $
    543.0
    
    
    $
    521.3
    
    
    $
    543.0
  -16-




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Note 14. Consolidating Financial Information
  -17-




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Consolidating Income Statements
Three Months Ended June 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,004.1
    
    
    $
    822.7
    
    
    $
    (102.5
    )
    
    $
    1,724.3Cost of sales
    
    
    0.1
    
    
    
    (0.1
    )
    
    
    1.9
    
    
    
    705.2
    
    
    
    558.9
    
    
    
    (102.5
    )
    
    
    1,163.5Selling and administrative
expenses
    
    
    3.3
    
    
    
    3.5
    
    
    
    20.3
    
    
    
    142.5
    
    
    
    149.9
    
    
    
    (5.1
    )
    
    
    314.4Interest expense, net
    
    
    
    
    
    
    4.6
    
    
    
    13.0
    
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    18.3Equity in earnings of
subsidiaries, net of tax
    
    
    205.2
    
    
    
    7.6
    
    
    
    124.8
    
    
    
    33.9
    
    
    
    129.9
    
    
    
    (501.4
    )
    
    
    Intercompany income
(expense)
    
    
    (10.1
    )
    
    
    (10.2
    )
    
    
    26.9
    
    
    
    (38.3
    )
    
    
    66.5
    
    
    
    (34.8
    )
    
    
    Income (loss) before
income taxes
    
    
    191.7
    
    
    
    (10.6
    )
    
    
    116.5
    
    
    
    152.0
    
    
    
    309.6
    
    
    
    (531.1
    )
    
    
    228.1Income tax expense
(benefit)
    
    
    
    
    
    
    (6.8
    )
    
    
    (13.3
    )
    
    
    47.2
    
    
    
    39.1
    
    
    
    
    
    
    
    66.2Net income (loss)
    
    $
    191.7
    
    
    $
    (3.8
    )
    
    $
    129.8
    
    
    $
    104.8
    
    
    $
    270.5
    
    
    $
    (531.1
    )
    
    $
    161.9
 Consolidating Income Statements
Three Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    943.1
    
    
    $
    582.8
    
    
    $
    (62.2
    )
    
    $
    1,463.7Cost of sales
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    658.5
    
    
    
    387.8
    
    
    
    (62.2
    )
    
    
    984.6Selling and administrative
expenses
    
    
    3.0
    
    
    
    4.2
    
    
    
    18.8
    
    
    
    137.2
    
    
    
    105.9
    
    
    
    
    
    
    
    269.1Income from Belden agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3Interest expense, net
    
    
    (0.4
    )
    
    
    11.2
    
    
    
    3.7
    
    
    
    
    
    
    
    (1.6
    )
    
    
    
    
    
    
    12.9Equity in earnings of
subsidiaries, net of tax
    
    
    248.4
    
    
    
    10.2
    
    
    
    111.0
    
    
    
    24.9
    
    
    
    177.0
    
    
    
    (571.5
    )
    
    
    Intercompany income
(expense)
    
    
    (8.0
    )
    
    
    (4.5
    )
    
    
    13.3
    
    
    
    (44.4
    )
    
    
    72.4
    
    
    
    (28.8
    )
    
    
    Income (loss) before
income taxes
    
    
    237.8
    
    
    
    (9.7
    )
    
    
    101.3
    
    
    
    127.9
    
    
    
    343.4
    
    
    
    (600.3
    )
    
    
    200.4Income tax expense
(benefit)
    
    
    
    
    
    
    (7.5
    )
    
    
    (75.7
    )
    
    
    38.0
    
    
    
    36.4
    
    
    
    
    
    
    
    (8.8
    )Net income (loss)
    
    $
    237.8
    
    
    $
    (2.2
    )
    
    $
    177.0
    
    
    $
    89.9
    
    
    $
    307.0
    
    
    $
    (600.3
    )
    
    $
    209.2
 -18-




---



##### Table of Contents



Consolidating Income Statements
Six Months Ended June 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,925.1
    
    
    $
    1,532.3
    
    
    $
    (187.0
    )
    
    $
    3,270.4Cost of sales
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    3.1
    
    
    
    1,337.2
    
    
    
    1,032.7
    
    
    
    (187.0
    )
    
    
    2,185.7Selling and administrative
expenses
    
    
    5.5
    
    
    
    6.0
    
    
    
    43.1
    
    
    
    287.4
    
    
    
    283.1
    
    
    
    (9.2
    )
    
    
    615.9Interest expense, net
    
    
    
    
    
    
    10.2
    
    
    
    24.7
    
    
    
    
    
    
    
    (1.7
    )
    
    
    
    
    
    
    33.2Equity in earnings of
subsidiaries, net of tax
    
    
    399.5
    
    
    
    12.6
    
    
    
    231.3
    
    
    
    65.2
    
    
    
    244.7
    
    
    
    (953.3
    )
    
    
    Intercompany income
(expense)
    
    
    (19.5
    )
    
    
    (19.4
    )
    
    
    58.6
    
    
    
    (82.6
    )
    
    
    131.4
    
    
    
    (68.5
    )
    
    
    Income (loss) before
income taxes
    
    
    374.6
    
    
    
    (22.8
    )
    
    
    219.0
    
    
    
    283.1
    
    
    
    594.3
    
    
    
    (1,012.6
    )
    
    
    435.6Income tax expense
(benefit)
    
    
    
    
    
    
    (13.3
    )
    
    
    (25.6
    )
    
    
    88.3
    
    
    
    70.9
    
    
    
    
    
    
    
    120.3Net income (loss)
    
    $
    374.6
    
    
    $
    (9.5
    )
    
    $
    244.6
    
    
    $
    194.8
    
    
    $
    523.4
    
    
    $
    (1,012.6
    )
    
    $
    315.3
 Six Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,861.6
    
    
    $
    1,119.2
    
    
    $
    (123.1
    )
    
    $
    2,857.7Cost of sales
    
    
    
    
    
    
    0.1
    
    
    
    0.8
    
    
    
    1,303.6
    
    
    
    748.1
    
    
    
    (123.1
    )
    
    
    1,929.5Selling and administrative
expenses
    
    
    5.4
    
    
    
    7.7
    
    
    
    34.5
    
    
    
    270.5
    
    
    
    206.4
    
    
    
    
    
    
    
    524.5Income from Belden agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3
    
    
    
    
    
    
    
    3.3Interest expense, net
    
    
    (1.0
    )
    
    
    22.4
    
    
    
    7.4
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    25.8Equity in earnings of
subsidiaries, net of tax
    
    
    417.6
    
    
    
    21.0
    
    
    
    206.7
    
    
    
    45.1
    
    
    
    279.9
    
    
    
    (970.3
    )
    
    
    Intercompany income
(expense)
    
    
    (14.9
    )
    
    
    (8.8
    )
    
    
    28.4
    
    
    
    (83.8
    )
    
    
    136.4
    
    
    
    (57.3
    )
    
    
    Income (loss) before
income taxes
    
    
    398.3
    
    
    
    (18.0
    )
    
    
    192.4
    
    
    
    248.8
    
    
    
    587.3
    
    
    
    (1,027.6
    )
    
    
    381.2Income tax expense
(benefit)
    
    
    
    
    
    
    (14.8
    )
    
    
    (87.4
    )
    
    
    76.8
    
    
    
    65.5
    
    
    
    
    
    
    
    40.1Net income (loss)
    
    $
    398.3
    
    
    $
    (3.2
    )
    
    $
    279.8
    
    
    $
    172.0
    
    
    $
    521.8
    
    
    $
    (1,027.6
    )
    
    $
    341.1
 -19-




---



##### Table of Contents



Consolidating Balance Sheets
June 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    
    
    
    $
    
    
    
    $
    17.5
    
    
    $
    4.5
    
    
    $
    132.7
    
    
    $
    
    
    
    $
    154.7Investments
    
    
    
    
    
    
    
    
    
    
    51.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51.3Receivables
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    600.5
    
    
    
    630.3
    
    
    
    
    
    
    
    1,230.9Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    383.5
    
    
    
    366.0
    
    
    
    
    
    
    
    749.5Deferred income taxes and
other current assets
    
    
    
    
    
    
    115.9
    
    
    
    48.2
    
    
    
    25.6
    
    
    
    80.3
    
    
    
    
    
    
    
    270.0Total current assets
    
    
    
    
    
    
    115.9
    
    
    
    117.1
    
    
    
    1,014.1
    
    
    
    1,209.3
    
    
    
    
    
    
    
    2,456.4Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    59.6
    
    
    
    324.5
    
    
    
    384.4
    
    
    
    
    
    
    
    768.5Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,261.9
    
    
    
    1,479.9
    
    
    
    
    
    
    
    2,741.8Investment in subsidiaries
    
    
    5,595.6
    
    
    
    626.5
    
    
    
    5,028.9
    
    
    
    1,138.5
    
    
    
    4,353.7
    
    
    
    (16,743.2
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    2,981.4
    
    
    
    
    
    
    
    312.7
    
    
    
    (3,294.1
    )
    
    
    Intercompany accounts
receivable
    
    
    
    
    
    
    777.1
    
    
    
    
    
    
    
    1,347.2
    
    
    
    885.2
    
    
    
    (3,009.5
    )
    
    
    Intercompany notes
receivable
    
    
    93.7
    
    
    
    25.8
    
    
    
    1,353.5
    
    
    
    0.3
    
    
    
    4,541.3
    
    
    
    (6,014.6
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    21.8
    
    
    
    3.8
    
    
    
    58.4
    
    
    
    298.0
    
    
    
    
    
    
    
    382.0Total assets
    
    $
    5,689.3
    
    
    $
    1,567.1
    
    
    $
    9,544.3
    
    
    $
    5,144.9
    
    
    $
    13,464.5
    
    
    $
    (29,061.4
    )
    
    $
    6,348.7Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    89.8
    
    
    $
    
    
    
    $
    24.5
    
    
    $
    
    
    
    $
    114.3Accounts payable
    
    
    43.8
    
    
    
    2.8
    
    
    
    18.8
    
    
    
    240.4
    
    
    
    267.8
    
    
    
    
    
    
    
    573.6Accrued liabilities
    
    
    6.5
    
    
    
    37.8
    
    
    
    71.2
    
    
    
    231.0
    
    
    
    218.9
    
    
    
    
    
    
    
    565.4Current discontinued
operations liability
    
    
    
    
    
    
    191.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191.3Current maturities of
long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Total current liabilities
    
    
    50.3
    
    
    
    231.9
    
    
    
    179.8
    
    
    
    471.4
    
    
    
    511.3
    
    
    
    
    
    
    
    1,444.7Long-term debt
    
    
    
    
    
    
    277.2
    
    
    
    921.9
    
    
    
    8.0
    
    
    
    0.4
    
    
    
    
    
    
    
    1,207.5Intercompany accounts
payable
    
    
    26.4
    
    
    
    
    
    
    
    2,983.1
    
    
    
    
    
    
    
    
    
    
    
    (3,009.5
    )
    
    
    Intercompany notes
payable
    
    
    1,052.6
    
    
    
    804.6
    
    
    
    1,806.9
    
    
    
    1,742.0
    
    
    
    608.5
    
    
    
    (6,014.6
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Other long-term
liabilities
    
    
    
    
    
    
    (91.0
    )
    
    
    120.9
    
    
    
    181.2
    
    
    
    292.5
    
    
    
    
    
    
    
    503.6Total liabilities
    
    
    1,129.3
    
    
    
    1,552.7
    
    
    
    6,012.6
    
    
    
    2,402.6
    
    
    
    1,412.7
    
    
    
    (9,024.1
    )
    
    
    3,485.8Class A common stock
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    1.7Class B common stock
    
    
    1.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    Subsidiary common stock
    
    
    
    
    
    
    
    
    
    
    170.0
    
    
    
    
    
    
    
    371.4
    
    
    
    (541.4
    )
    
    
    Capital in excess of
par value
    
    
    3,337.2
    
    
    
    
    
    
    
    747.2
    
    
    
    1,448.1
    
    
    
    7,780.0
    
    
    
    (13,312.5
    )
    
    
    Retained earnings
    
    
    1,133.5
    
    
    
    85.1
    
    
    
    2,704.0
    
    
    
    1,263.4
    
    
    
    3,885.0
    
    
    
    (6,163.7
    )
    
    
    2,907.3Accumulated other non-owner changes in equity
    
    
    86.2
    
    
    
    (70.7
    )
    
    
    (89.5
    )
    
    
    30.8
    
    
    
    15.4
    
    
    
    (18.3
    )
    
    
    (46.1
    )Total shareholders equity
    
    
    4,560.0
    
    
    
    14.4
    
    
    
    3,531.7
    
    
    
    2,742.3
    
    
    
    12,051.8
    
    
    
    (20,037.3
    )
    
    
    2,862.9Total liabilities and
shareholders equity
    
    $
    5,689.3
    
    
    $
    1,567.1
    
    
    $
    9,544.3
    
    
    $
    5,144.9
    
    
    $
    13,464.5
    
    
    $
    (29,061.4
    )
    
    $
    6,348.7
 -20-




---



##### Table of Contents



Consolidating Balance Sheets
December 31, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    1.3
    
    
    $
    
    
    
    $
    23.1
    
    
    $
    (1.1
    )
    
    $
    209.5
    
    
    $
    
    
    
    $
    232.8Investments
    
    
    
    
    
    
    
    
    
    
    93.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93.7Receivables
    
    
    1.1
    
    
    
    
    
    
    
    0.3
    
    
    
    539.3
    
    
    
    507.9
    
    
    
    
    
    
    
    1,048.6Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    346.2
    
    
    
    297.5
    
    
    
    
    
    
    
    643.7Deferred income taxes and
other current assets
    
    
    0.7
    
    
    
    119.2
    
    
    
    64.3
    
    
    
    44.8
    
    
    
    55.2
    
    
    
    
    
    
    
    284.2Total current assets
    
    
    3.1
    
    
    
    119.2
    
    
    
    181.4
    
    
    
    929.2
    
    
    
    1,070.1
    
    
    
    
    
    
    
    2,303.0Restricted cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290.1
    
    
    
    
    
    
    
    290.1Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    63.9
    
    
    
    326.9
    
    
    
    329.0
    
    
    
    
    
    
    
    719.8Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,249.7
    
    
    
    1,290.6
    
    
    
    
    
    
    
    2,540.3Investment in subsidiaries
    
    
    5,158.1
    
    
    
    620.3
    
    
    
    4,779.5
    
    
    
    1,030.8
    
    
    
    3,785.5
    
    
    
    (15,374.2
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    2,872.2
    
    
    
    
    
    
    
    312.7
    
    
    
    (3,184.9
    )
    
    
    Intercompany accounts
receivable
    
    
    
    
    
    
    787.4
    
    
    
    
    
    
    
    1,337.0
    
    
    
    737.7
    
    
    
    (2,862.1
    )
    
    
    Intercompany notes
receivable
    
    
    162.4
    
    
    
    25.8
    
    
    
    1,155.2
    
    
    
    0.3
    
    
    
    4,422.1
    
    
    
    (5,765.8
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    14.5
    
    
    
    8.0
    
    
    
    48.9
    
    
    
    208.9
    
    
    
    
    
    
    
    280.3Total assets
    
    $
    5,323.6
    
    
    $
    1,567.2
    
    
    $
    9,060.2
    
    
    $
    4,922.8
    
    
    $
    12,446.7
    
    
    $
    (27,187.0
    )
    
    $
    6,133.5Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    228.7
    
    
    $
    
    
    
    $
    27.4
    
    
    $
    
    
    
    $
    256.1Accounts payable
    
    
    37.8
    
    
    
    5.1
    
    
    
    19.1
    
    
    
    218.2
    
    
    
    252.9
    
    
    
    
    
    
    
    533.1Accrued liabilities
    
    
    6.2
    
    
    
    39.0
    
    
    
    72.2
    
    
    
    261.5
    
    
    
    187.8
    
    
    
    
    
    
    
    566.7Current discontinued
operations liability
    
    
    
    
    
    
    179.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179.1Current maturities of
long-term debt
    
    
    
    
    
    
    100.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100.1Total current liabilities
    
    
    44.0
    
    
    
    323.3
    
    
    
    320.0
    
    
    
    479.7
    
    
    
    468.1
    
    
    
    
    
    
    
    1,635.1Long-term debt
    
    
    
    
    
    
    277.2
    
    
    
    624.1
    
    
    
    8.0
    
    
    
    0.6
    
    
    
    
    
    
    
    909.9Intercompany accounts
payable
    
    
    34.8
    
    
    
    
    
    
    
    2,826.1
    
    
    
    
    
    
    
    
    
    
    
    (2,860.9
    )
    
    
    Intercompany notes
payable
    
    
    815.0
    
    
    
    692.6
    
    
    
    1,869.0
    
    
    
    1,741.8
    
    
    
    647.2
    
    
    
    (5,765.6
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Other long-term
Liabilities
    
    
    
    
    
    
    (86.1
    )
    
    
    155.6
    
    
    
    187.8
    
    
    
    159.3
    
    
    
    
    
    
    
    416.6Total liabilities
    
    
    893.8
    
    
    
    1,537.0
    
    
    
    5,794.8
    
    
    
    2,417.3
    
    
    
    1,275.2
    
    
    
    (8,626.5
    )
    
    
    3,291.6Class A common stock
    
    
    2.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    1.8Class B common stock
    
    
    1.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    Subsidiary common stock
    
    
    
    
    
    
    
    
    
    
    170.0
    
    
    
    
    
    
    
    371.4
    
    
    
    (541.4
    )
    
    
    Capital in excess of
par value
    
    
    3,458.5
    
    
    
    
    
    
    
    743.7
    
    
    
    1,427.0
    
    
    
    7,496.1
    
    
    
    (13,039.6
    )
    
    
    85.7Retained earnings
    
    
    916.4
    
    
    
    116.2
    
    
    
    2,468.7
    
    
    
    1,055.3
    
    
    
    3,335.9
    
    
    
    (5,057.4
    )
    
    
    2,835.1Accumulated other non-owner changes in equity
    
    
    51.7
    
    
    
    (86.0
    )
    
    
    (117.0
    )
    
    
    23.2
    
    
    
    (31.9
    )
    
    
    79.3
    
    
    
    (80.7
    )Total shareholders equity
    
    
    4,429.8
    
    
    
    30.2
    
    
    
    3,265.4
    
    
    
    2,505.5
    
    
    
    11,171.5
    
    
    
    (18,560.5
    )
    
    
    2,841.9Total liabilities and
shareholders equity
    
    $
    5,323.6
    
    
    $
    1,567.2
    
    
    $
    9,060.2
    
    
    $
    4,922.8
    
    
    $
    12,446.7
    
    
    $
    (27,187.0
    )
    
    $
    6,133.5
 -21-




---



##### Table of Contents



Consolidating Statements of Cash Flows
Six Months Ended June 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (21.6
    )
    
    $
    (22.4
    )
    
    $
    (7.7
    )
    
    $
    29.5
    
    
    $
    287.5
    
    
    $
    
    
    
    $
    265.3Cash flows from investing
activities:Proceeds from short-term
investments
    
    
    
    
    
    
    
    
    
    
    41.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41.3Proceeds from cash restricted for
business acquisitions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290.1
    
    
    
    
    
    
    
    290.1Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (6.5
    )
    
    
    (22.9
    )
    
    
    (28.5
    )
    
    
    
    
    
    
    (57.9
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (269.6
    )
    
    
    
    
    
    
    (269.6
    )Investments in affiliates
    
    
    
    
    
    
    
    
    
    
    (13.0
    )
    
    
    (3.1
    )
    
    
    
    
    
    
    16.1
    
    
    
    Loans to affiliates
    
    
    (184.4
    )
    
    
    
    
    
    
    (404.1
    )
    
    
    
    
    
    
    (581.2
    )
    
    
    1,169.7
    
    
    
    Repayments of loans from affiliates
    
    
    253.1
    
    
    
    
    
    
    
    234.8
    
    
    
    
    
    
    
    408.5
    
    
    
    (896.4
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    69.0
    
    
    
    
    
    
    
    
    
    
    
    (69.0
    )
    
    
    Proceeds from sales of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    0.7
    
    
    
    
    
    
    
    1.0Net cash provided by (used in)
investing activities
    
    
    68.7
    
    
    
    
    
    
    
    (78.5
    )
    
    
    (25.7
    )
    
    
    (180.0
    )
    
    
    220.4
    
    
    
    4.9Cash flows from financing
activities:Proceeds from issuance of debt
    
    
    
    
    
    
    
    
    
    
    297.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    297.6Debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Proceeds from debt derivatives
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5Repayments of debt
    
    
    
    
    
    
    (100.0
    )
    
    
    (138.9
    )
    
    
    
    
    
    
    (60.2
    )
    
    
    
    
    
    
    (299.1
    )Borrowings from affiliates
    
    
    838.0
    
    
    
    112.0
    
    
    
    31.4
    
    
    
    3.1
    
    
    
    185.2
    
    
    
    (1,169.7
    )
    
    
    Repayments of loans to affiliates
    
    
    (601.3
    )
    
    
    
    
    
    
    (97.2
    )
    
    
    (3.0
    )
    
    
    (194.9
    )
    
    
    896.4
    
    
    
    Other intercompany financing
activities
    
    
    4.5
    
    
    
    10.4
    
    
    
    109.4
    
    
    
    1.7
    
    
    
    (135.2
    )
    
    
    9.2
    
    
    
    Dividends
    
    
    (82.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82.8
    )Dividends paid to affiliates
    
    
    (69.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69.0
    
    
    
    Purchase of common shares
    
    
    (147.0
    )
    
    
    
    
    
    
    (135.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (282.9
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    3.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.4Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.1
    
    
    
    (16.1
    )
    
    
    Proceeds from exercise of stock
options
    
    
    9.2
    
    
    
    
    
    
    
    10.8
    
    
    
    
    
    
    
    
    
    
    
    (9.2
    )
    
    
    10.8Net cash provided by (used in)
financing activities
    
    
    (48.4
    )
    
    
    22.4
    
    
    
    80.6
    
    
    
    1.8
    
    
    
    (189.0
    )
    
    
    (220.4
    )
    
    
    (353.0
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.7
    
    
    
    
    
    
    
    4.7Increase (decrease) in cash and cash
equivalents
    
    
    (1.3
    )
    
    
    
    
    
    
    (5.6
    )
    
    
    5.6
    
    
    
    (76.8
    )
    
    
    
    
    
    
    (78.1
    )Cash and cash equivalents,
beginning of period
    
    
    1.3
    
    
    
    
    
    
    
    23.1
    
    
    
    (1.1
    )
    
    
    209.5
    
    
    
    
    
    
    
    232.8Cash and cash equivalents, end of
period
    
    $
    
    
    
    $
    
    
    
    $
    17.5
    
    
    $
    4.5
    
    
    $
    132.7
    
    
    $
    
    
    
    $
    154.7
 -22-




---



##### Table of Contents



Consolidating Statements of Cash Flows
Six Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (10.1
    )
    
    $
    (21.9
    )
    
    $
    42.1
    
    
    $
    29.6
    
    
    $
    169.6
    
    
    $
    
    
    
    $
    209.3Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (15.1
    )
    
    
    (25.2
    )
    
    
    (15.8
    )
    
    
    
    
    
    
    (56.1
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75.2
    )
    
    
    (95.3
    )
    
    
    
    
    
    
    (170.5
    )Investments in affiliates
    
    
    
    
    
    
    
    
    
    
    (44.3
    )
    
    
    
    
    
    
    
    
    
    
    44.3
    
    
    
    Loans to affiliates
    
    
    (60.0
    )
    
    
    
    
    
    
    (22.4
    )
    
    
    
    
    
    
    (528.9
    )
    
    
    611.3
    
    
    
    Repayments of loans from affiliates
    
    
    151.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    408.2
    
    
    
    (560.0
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    52.8
    
    
    
    15.9
    
    
    
    4.4
    
    
    
    (73.1
    )
    
    
    Proceeds from sale of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    
    
    
    
    0.8Net cash provided by (used in)
investing activities
    
    
    91.8
    
    
    
    
    
    
    
    (29.0
    )
    
    
    (84.1
    )
    
    
    (227.0
    )
    
    
    22.5
    
    
    
    (225.8
    )Cash flows from financing
activities:Proceeds from issuance of debt
    
    
    
    
    
    
    
    
    
    
    300.0
    
    
    
    
    
    
    
    6.7
    
    
    
    
    
    
    
    306.7Debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (2.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.7
    )Proceeds from debt derivatives
    
    
    
    
    
    
    
    
    
    
    10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.0Repayments of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (3.0
    )Borrowings from affiliates
    
    
    385.2
    
    
    
    22.4
    
    
    
    203.7
    
    
    
    
    
    
    
    
    
    
    
    (611.3
    )
    
    
    Repayments of loans to affiliates
    
    
    (289.4
    )
    
    
    
    
    
    
    (268.9
    )
    
    
    
    
    
    
    (1.7
    )
    
    
    560.0
    
    
    
    Other intercompany financing
Activities
    
    
    58.3
    
    
    
    (0.5
    )
    
    
    (126.7
    )
    
    
    58.1
    
    
    
    10.8
    
    
    
    
    
    
    
    Dividends
    
    
    (77.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77.9
    )Dividends paid to affiliates
    
    
    (57.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15.8
    )
    
    
    73.1
    
    
    
    Purchase of common shares
    
    
    1.4
    
    
    
    
    
    
    
    (75.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (74.0
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    20.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.8Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44.3
    
    
    
    (44.3
    )
    
    
    Proceeds from exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    49.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49.5Net cash provided by (used in)
financing activities
    
    
    20.3
    
    
    
    21.9
    
    
    
    110.3
    
    
    
    58.1
    
    
    
    41.3
    
    
    
    (22.5
    )
    
    
    229.4Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.6
    
    
    
    
    
    
    
    3.6Increase (decrease) in cash and cash
equivalents
    
    
    102.0
    
    
    
    
    
    
    
    123.4
    
    
    
    3.6
    
    
    
    (12.5
    )
    
    
    
    
    
    
    216.5Cash and cash equivalents,
beginning of period
    
    
    11.5
    
    
    
    
    
    
    
    204.9
    
    
    
    (2.8
    )
    
    
    209.9
    
    
    
    
    
    
    
    423.5Cash and cash equivalents, end of
period
    
    $
    113.5
    
    
    $
    
    
    
    $
    328.3
    
    
    $
    0.8
    
    
    $
    197.4
    
    
    $
    
    
    
    $
    640.0
 -23-




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
 Three Months Ended June 30, 2008 Compared With Three Months Ended June 30, 2007
  Revenues:
    Costs and Expenses:
   -24-




---



##### Table of Contents



Operating Earnings:
    Income Taxes:
  -25-




---



##### Table of Contents



Six Months Ended June 30, 2008 Compared With Six Months Ended June 30, 2007
  Revenues:
    Costs and Expenses:
       -26-




---



##### Table of Contents



Operating Earnings:
    Income Taxes:
  Liquidity and Capital Resources
 Liquidity
   -27-




---



##### Table of Contents



Capital Resources:
       -28-




---



##### Table of Contents



Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
  Backlog
  June 30,2008
    
    
    2007(in millions)Electrical Products
    
    $
    798.7
    
    
    $
    680.6Tools
    
    
    87.2
    
    
    
    75.5$
    885.9
    
    
    $
    756.1
 Private Securities Litigation Reform Act Safe Harbor Statement
  
 Item 4. Controls and Procedures
   -29-




---



##### Table of Contents



PART II  OTHER INFORMATION
 
  Discontinued Operations Liability
  2005
    -30-




---



##### Table of Contents



2006
      -31-




---



##### Table of Contents



2007
   2008
  -32-




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Accrual at beginning of period
    
    $
    519.1
    
    
    $
    559.5
    
    
    $
    509.1
    
    
    $
    529.6Indemnity and defense payments
    
    
    (6.7
    )
    
    
    (15.8
    )
    
    
    (11.9
    )
    
    
    (24.6
    )Insurance recoveries
    
    
    9.6
    
    
    
    
    
    
    
    25.4
    
    
    
    39.3Other
    
    
    (0.7
    )
    
    
    (0.7
    )
    
    
    (1.3
    )
    
    
    (1.3
    )Accrual at end of period
    
    $
    521.3
    
    
    $
    543.0
    
    
    $
    521.3
    
    
    $
    543.0
     Other Matters
  -33-




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##### Table of Contents



Purchases of Equity Securities
 Total Number of Shares

    
    Maximum Number ofTotal Number of

    
    Average Price

    
    Purchased as Part of

    
    Shares that May Yet BeShares

    
    Paid per

    
    Publicly Announced Plans

    
    Purchased Under thePeriod
    
    Purchased

    
    Share

    
    or Programs(1)

    
    Plans or Programs(1) (2)As of 3/31/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,167,9474/01/08  4/30/08
    
    
    88,068
    
    
    $
    39.90
    
    
    
    88,068
    
    
    
    11,079,8795/01/08  5/31/08
    
    
    152,911
    
    
    $
    43.58
    
    
    
    152,911
    
    
    
    10,926,9686/01/08  6/30/08
    
    
    148,000
    
    
    $
    43.06
    
    
    
    148,000
    
    
    
    10,778,968Total
    
    
    388,979
    
    
    $
    42.55
    
    
    
    388,979
 
 (1)
    
    On November 2, 2004, Coopers Board of Directors authorized the repurchase of up to
ten million additional shares of Cooper Class A common stock. On February 12, 2008, Coopers
Board of Directors authorized the repurchase of ten million shares of common stock in addition
to the remaining November 2, 2004 authorization, which is reflected in the above table.
Cooper has also announced that the Board authorized the repurchase of shares issued from time
to time under its equity compensation plans, matched savings plan and dividend reinvestment
plan in order to offset the dilution that results from issuing shares under these plans. For
2008, Coopers current estimate is that 3 million shares will be issued under equity
compensation plans, which is reflected in the above table.(2)
    
    As of the date of this filing in 2008, Cooper had repurchased the 3 million shares
intended to offset dilution from share issuances under equity compensation plans, as well as
approximately 3.7 million additional shares under the Cooper Board of Directors authorizations
discussed above. Cooper may continue to repurchase shares under this authorization from time
to time during 2008. The decision whether to do so will be dependent on the favorability of
market conditions, as well as potential cash requirements for acquisitions. 
   
   1.
    
    Proposal for the election of three directors for terms expiring in 2011:
 Robert M. Devlin
    
    Linda A. Hill
    
    James J. PostlVotes For:
    
    
    148,218,370
    
    
    
    148,451,462
    
    
    
    147,953,306Votes Withheld:
    
    
    37,666,525
    
    
    
    37,433,433
    
    
    
    37,931,590
 -34-




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##### Table of Contents



2.
    
    Proposal to appoint Ernst & Young LLP as independent auditors for 2008:
 Votes For:
    
    
    182,920,090Votes Against:
    
    
    1,362,086Abstain:
    
    
    1,602,719Non-Vote:
    
    
    0
 3.
    
    Proposal to amend Coopers Stock Incentive Plan:
 Votes For:
    
    
    168,905,315Votes Against:
    
    
    5,209,380Abstain:
    
    
    2,030,448Non-Vote:
    
    
    9,739,752
 4.
    
    Shareholder proposal to implement a code of conduct based upon international
labor organization human rights standards:
 Votes For:
    
    
    12,914,625Votes Against:
    
    
    104,243,076Abstain:
    
    
    58,987,442Non-Vote:
    
    
    9,739,752
 
  12.
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2003
through 2007 and the Six Months Ended June 30, 2008 and 2007.31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 -35-




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##### Table of Contents



Cooper Industries, Ltd.

(Registrant)Date: August 5, 2008
    
    /s/ Terry A. Klebe

Terry A. Klebe, Senior Vice President and

   Chief Financial OfficerDate: August 5, 2008
    
    /s/ Rick L. Johnson

Rick L. Johnson, Vice President, Controller and

   Chief Accounting Officer
 -36-




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##### Table of Contents



12.
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2003
through 2007 and the six months ended June 30, 2008 and 2007.31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.