##### Table of Contents



10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended September 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 
incorporation or organization)
    
    (I.R.S. Employer
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
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
  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 IndexEX-12.1EX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 COOPER INDUSTRIES, LTD.
CONSOLIDATED INCOME STATEMENTS
(unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions, except per share data)Revenues
    
    $
    1,727.7
    
    
    $
    1,501.3
    
    
    $
    4,998.1
    
    
    $
    4,359.0Cost of sales
    
    
    1,170.0
    
    
    
    1,008.1
    
    
    
    3,355.7
    
    
    
    2,937.6Selling and administrative expenses
    
    
    307.8
    
    
    
    276.7
    
    
    
    923.7
    
    
    
    801.2Operating earnings
    
    
    249.9
    
    
    
    216.5
    
    
    
    718.7
    
    
    
    620.2Income from Belden agreement
    
    
    
    
    
    
    23.5
    
    
    
    
    
    
    
    26.8Interest expense, net
    
    
    17.3
    
    
    
    12.3
    
    
    
    50.5
    
    
    
    38.1Income from continuing operations
before income taxes
    
    
    232.6
    
    
    
    227.7
    
    
    
    668.2
    
    
    
    608.9Income taxes expense
    
    
    43.4
    
    
    
    55.8
    
    
    
    163.7
    
    
    
    95.9Income from continuing operations
    
    
    189.2
    
    
    
    171.9
    
    
    
    504.5
    
    
    
    513.0Income related to discontinued operations,
net of income taxes
    
    
    16.6
    
    
    
    
    
    
    
    16.6
    
    
    
    Net income
    
    $
    205.8
    
    
    $
    171.9
    
    
    $
    521.1
    
    
    $
    513.0Net income per common share:Basic:Income from continuing operations
    
    $
    1.09
    
    
    $
    .94
    
    
    $
    2.88
    
    
    $
    2.80Income from discontinued operations
    
    
    .10
    
    
    
    
    
    
    
    .10
    
    
    
    Net income
    
    $
    1.19
    
    
    $
    .94
    
    
    $
    2.98
    
    
    $
    2.80Diluted:Income from continuing operations
    
    $
    1.08
    
    
    $
    .93
    
    
    $
    2.85
    
    
    $
    2.75Income from discontinued operations
    
    
    .09
    
    
    
    
    
    
    
    .09
    
    
    
    Net income
    
    $
    1.17
    
    
    $
    .93
    
    
    $
    2.94
    
    
    $
    2.75Cash dividends declared per common share
    
    $
    .25
    
    
    $
    .21
    
    
    $
    .75
    
    
    $
    .63
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COOPER INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)
    
    
    (Note 1)(in millions)ASSETSCash and cash equivalents
    
    $
    260.7
    
    
    $
    232.8Investments
    
    
    35.6
    
    
    
    93.7Receivables
    
    
    1,197.6
    
    
    
    1,048.6Inventories
    
    
    716.1
    
    
    
    643.7Current discontinued operations receivable
    
    
    158.5
    
    
    
    Deferred income taxes and other current assets
    
    
    168.4
    
    
    
    284.2Total current assets
    
    
    2,536.9
    
    
    
    2,303.0Restricted cash
    
    
    
    
    
    
    290.1Property, plant and equipment, less accumulated depreciation
    
    
    749.1
    
    
    
    719.8Goodwill
    
    
    2,654.4
    
    
    
    2,540.3Long-term discontinued operations receivable
    
    
    174.8
    
    
    
    Other noncurrent assets
    
    
    392.3
    
    
    
    280.3Total assets
    
    $
    6,507.5
    
    
    $
    6,133.5LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt
    
    $
    32.9
    
    
    $
    256.1Accounts payable
    
    
    588.7
    
    
    
    533.1Accrued liabilities
    
    
    592.7
    
    
    
    566.7Current discontinued operations liability
    
    
    50.7
    
    
    
    179.1Current maturities of long-term debt
    
    
    
    
    
    
    100.1Total current liabilities
    
    
    1,265.0
    
    
    
    1,635.1Long-term debt
    
    
    1,207.5
    
    
    
    909.9Postretirement benefits other than pensions
    
    
    79.8
    
    
    
    81.4Long-term discontinued operations liability
    
    
    772.6
    
    
    
    330.0Deferred income taxes and other long-term liabilities
    
    
    235.4
    
    
    
    335.2Total liabilities
    
    
    3,560.3
    
    
    
    3,291.6Common stock, $.01 par value
    
    
    1.7
    
    
    
    1.8Capital in excess of par value
    
    
    
    
    
    
    85.7Retained earnings
    
    
    3,055.6
    
    
    
    2,835.1Accumulated other nonowner changes in equity
    
    
    (110.1
    )
    
    
    (80.7
    )Total shareholders equity
    
    
    2,947.2
    
    
    
    2,841.9Total liabilities and shareholders equity
    
    $
    6,507.5
    
    
    $
    6,133.5
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COOPER INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Nine Months EndedSeptember 30,2008
    
    
    2007(in millions)Cash flows from operating activities:Net income
    
    $
    521.1
    
    
    $
    513.0Less: Income related to discontinued operations
    
    
    (16.6
    )
    
    
    Income from continuing operations
    
    
    504.5
    
    
    
    513.0Adjustments to reconcile to net cash provided by operating
activities:Depreciation and amortization
    
    
    106.8
    
    
    
    87.7Deferred income taxes
    
    
    1.7
    
    
    
    5.5Excess tax benefits from stock options and awards
    
    
    (8.6
    )
    
    
    (19.6
    )Changes in assets and liabilities: (1)Receivables
    
    
    (123.4
    )
    
    
    (161.9
    )Inventories
    
    
    (53.6
    )
    
    
    (11.2
    )Accounts payable and accrued liabilities
    
    
    43.5
    
    
    
    36.5Other assets and liabilities, net
    
    
    98.9
    
    
    
    13.3Net cash provided by operating activities
    
    
    569.8
    
    
    
    463.3Cash flows from investing activities:Proceeds from short-term investments
    
    
    56.4
    
    
    
    Proceeds from cash restricted for business acquisitions
    
    
    290.1
    
    
    
    Capital expenditures
    
    
    (95.5
    )
    
    
    (91.0
    )Cash paid for acquired businesses
    
    
    (270.8
    )
    
    
    (194.5
    )Proceeds from sales of property, plant and equipment and other
    
    
    (0.9
    )
    
    
    0.8Net cash used in investing activities
    
    
    (20.7
    )
    
    
    (284.7
    )Cash flows from financing activities:Proceeds from issuance of debt
    
    
    297.6
    
    
    
    306.7Debt issuance costs
    
    
    (0.6
    )
    
    
    (2.7
    )Proceeds from debt derivatives
    
    
    0.5
    
    
    
    10.0Repayments of debt
    
    
    (380.0
    )
    
    
    (303.0
    )Dividends
    
    
    (126.9
    )
    
    
    (116.2
    )Purchase of common shares
    
    
    (325.2
    )
    
    
    (274.8
    )Excess tax benefits from stock options and awards
    
    
    8.6
    
    
    
    19.6Proceeds from exercise of stock options
    
    
    17.0
    
    
    
    54.7Net cash used in financing activities
    
    
    (509.0
    )
    
    
    (305.7
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (12.2
    )
    
    
    11.0Increase (decrease) in cash and cash equivalents
    
    
    27.9
    
    
    
    (116.1
    )Cash and cash equivalents, beginning of period
    
    
    232.8
    
    
    
    423.5Cash and cash equivalents, end of period
    
    $
    260.7
    
    
    $
    307.4
 
 (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
    
    $
    46.4
    
    
    $
    0.7
    
    
    $
    47.1Inventories
    
    
    32.2
    
    
    
    0.4
    
    
    
    32.6Property, Plant and Equipment
    
    
    41.7
    
    
    
    1.5
    
    
    
    43.2Goodwill
    
    
    175.6
    
    
    
    0.7
    
    
    
    176.3Other 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
    
    
    (69.6
    )
    
    
    (0.1
    )
    
    
    (69.7
    )Net cash consideration
    
    $
    257.8
    
    
    $
    3.4
    
    
    $
    261.2
   (in millions)Receivables
    
    $
    58.0Inventories
    
    
    48.6Property, Plant and Equipment
    
    
    41.7Goodwill
    
    
    184.5Other intangible assets
    
    
    122.3Accounts payable
    
    
    (36.5
    )Other assets and liabilities, net
    
    
    (73.0
    )Net cash consideration
    
    $
    345.6
  -7-




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Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007(in millions, except per share amounts)Revenues
    
    $
    1,727.7
    
    
    $
    1,594.6
    
    
    $
    5,017.4
    
    
    $
    4,642.8Income from continuing operations
    
    $
    189.2
    
    
    $
    170.8
    
    
    $
    503.7
    
    
    $
    509.1Net income
    
    $
    205.8
    
    
    $
    170.8
    
    
    $
    520.3
    
    
    $
    509.1Diluted earnings per share from
continuing operations
    
    $
    1.08
    
    
    $
    .92
    
    
    $
    2.85
    
    
    $
    2.73Diluted earnings per share
    
    $
    1.17
    
    
    $
    .92
    
    
    $
    2.94
    
    
    $
    2.73
 Note 4. Inventories
 September 30,
    
    
    December 31,2008
    
    
    2007(in millions)Raw materials
    
    $
    241.5
    
    
    $
    221.5Work-in-process
    
    
    191.7
    
    
    
    178.8Finished goods
    
    
    452.4
    
    
    
    396.2Perishable tooling and supplies
    
    
    14.0
    
    
    
    15.0899.6
    
    
    
    811.5Allowance for excess and obsolete inventory
    
    
    (80.2
    )
    
    
    (77.9
    )Excess of current standard costs over LIFO costs
    
    
    (103.3
    )
    
    
    (89.9
    )Net inventories
    
    $
    716.1
    
    
    $
    643.7
 Note 5. Debt
   Note 6. Shareholders Equity
  -8-




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Note 7. Segment Information
 RevenuesThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Electrical Products
    
    $
    1,526.0
    
    
    $
    1,301.9
    
    
    $
    4,397.6
    
    
    $
    3,784.8Tools
    
    
    201.7
    
    
    
    199.4
    
    
    
    600.5
    
    
    
    574.2Total revenues
    
    $
    1,727.7
    
    
    $
    1,501.3
    
    
    $
    4,998.1
    
    
    $
    4,359.0
 Operating EarningsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Electrical Products
    
    $
    249.7
    
    
    $
    224.2
    
    
    $
    732.2
    
    
    $
    631.6Tools
    
    
    24.1
    
    
    
    22.0
    
    
    
    56.0
    
    
    
    65.4Segment operating earnings
    
    
    273.8
    
    
    
    246.2
    
    
    
    788.2
    
    
    
    697.0General Corporate expense
    
    
    23.9
    
    
    
    29.7
    
    
    
    69.5
    
    
    
    76.8Total operating earnings
    
    
    249.9
    
    
    
    216.5
    
    
    
    718.7
    
    
    
    620.2Income from Belden agreement
    
    
    
    
    
    
    23.5
    
    
    
    
    
    
    
    26.8Interest expense, net
    
    
    17.3
    
    
    
    12.3
    
    
    
    50.5
    
    
    
    38.1Income from continuing operations
before income taxes
    
    $
    232.6
    
    
    $
    227.7
    
    
    $
    668.2
    
    
    $
    608.9
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Note 8. Pension and Other Postretirement Benefits
 Pension BenefitsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Components of net periodic benefit cost:Service cost
    
    $
    0.6
    
    
    $
    1.0
    
    
    $
    2.5
    
    
    $
    3.0Interest cost
    
    
    10.4
    
    
    
    10.2
    
    
    
    31.5
    
    
    
    30.6Expected return on plan assets
    
    
    (12.3
    )
    
    
    (12.8
    )
    
    
    (37.3
    )
    
    
    (38.4
    )Amortization of prior service cost
    
    
    (0.7
    )
    
    
    (0.5
    )
    
    
    (1.8
    )
    
    
    (1.5
    )Recognized actuarial loss
    
    
    2.5
    
    
    
    2.7
    
    
    
    7.3
    
    
    
    8.0Curtailment loss
    
    
    3.9
    
    
    
    
    
    
    
    3.9
    
    
    
    Net periodic benefit cost
    
    $
    4.4
    
    
    $
    0.6
    
    
    $
    6.1
    
    
    $
    1.7
 Other Postretirement BenefitsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Components of net periodic benefit cost:Interest cost
    
    $
    1.3
    
    
    $
    1.3
    
    
    $
    3.9
    
    
    $
    3.9Amortization of prior service cost
    
    
    (0.5
    )
    
    
    (0.5
    )
    
    
    (1.5
    )
    
    
    (1.5
    )Recognized actuarial gain
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    (1.8
    )
    
    
    (1.8
    )Net periodic benefit cost
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    0.6
    
    
    $
    0.6
  Note 9. Income Taxes
  -10-




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
   -11-




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Note 10. Net Income Per Common Share
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Basic:Income from continuing operations
    
    $
    189.2
    
    
    $
    171.9
    
    
    $
    504.5
    
    
    $
    513.0Income from discontinued operations
    
    
    16.6
    
    
    
    
    
    
    
    16.6
    
    
    
    Net income applicable to common stock
    
    $
    205.8
    
    
    $
    171.9
    
    
    $
    521.1
    
    
    $
    513.0Weighted average common shares outstanding
    
    
    173.6
    
    
    
    182.4
    
    
    
    175.0
    
    
    
    183.0Diluted:Income from continuing operations
    
    $
    189.2
    
    
    $
    171.9
    
    
    $
    504.5
    
    
    $
    513.0Income from discontinued operations
    
    
    16.6
    
    
    
    
    
    
    
    16.6
    
    
    
    Net income applicable to common stock
    
    $
    205.8
    
    
    $
    171.9
    
    
    $
    521.1
    
    
    $
    513.0Weighted average common shares outstanding
    
    
    173.6
    
    
    
    182.4
    
    
    
    175.0
    
    
    
    183.0Incremental shares from assumed conversions:Options, performance-based stock
awards and other employee awards
    
    
    2.1
    
    
    
    3.1
    
    
    
    2.2
    
    
    
    3.3Weighted average common shares
and common share equivalents
    
    
    175.7
    
    
    
    185.5
    
    
    
    177.2
    
    
    
    186.3
  Note 11. Net Income and Other Nonowner Changes in Equity
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Net income
    
    $
    205.8
    
    
    $
    171.9
    
    
    $
    521.1
    
    
    $
    513.0Foreign currency translation gains
(losses)
    
    
    (56.8
    )
    
    
    2.0
    
    
    
    (33.1
    )
    
    
    13.8Change in fair value of derivatives
    
    
    (10.6
    )
    
    
    3.4
    
    
    
    (0.6
    )
    
    
    12.3Net income and other nonowner
changes in equity
    
    $
    138.4
    
    
    $
    177.3
    
    
    $
    487.4
    
    
    $
    539.1
 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
    
    $
    35.6
    
    
    $
    
    
    
    
    (a
    )Currency forward
exchange contracts
    
    
    39.2
    
    
    
    (24.3
    )
    
    
    (a
    )Commodity swaps
    
    
    
    
    
    
    (8.0
    )
    
    
    (a
    )Cross-currency swaps
    
    
    
    
    
    
    (31.7
    )
    
    
    (a
    )
  -13-




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Note 13. Discontinued Operations Liability
  2005 - 2007
    -14-




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2008
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Accrual at beginning of period (under Plan A)
    
    $
    521.3
    
    
    $
    543.0
    
    
    $
    509.1
    
    
    $
    529.6Indemnity and defense payments
    
    
    (5.0
    )
    
    
    (19.4
    )
    
    
    (16.9
    )
    
    
    (44.0
    )Insurance recoveries
    
    
    
    
    
    
    
    
    
    
    25.4
    
    
    
    39.3Other
    
    
    (0.3
    )
    
    
    (2.5
    )
    
    
    (1.6
    )
    
    
    (3.8
    )Accrual at end of period (under Plan A) *
    
    $
    516.0
    
    
    $
    521.1
    
    
    $
    516.0
    
    
    $
    521.1
 
 *
    
    The $516.0 million liability reflects the estimated liability under Plan A
immediately prior to revising the accounting on September 30, 2008 to reflect the Plan
B Settlement. -15-




---



##### Table of Contents



September30, 2008(in millions)Asbestos liability analysis:Liability for unpaid indemnity and defense costs incurred
    
    $
    6.5Liability for pending and future indemnity and defense costs
    
    
    816.8Total estimated asbestos liability at end of period
    
    $
    823.3Asbestos receivable analysisReceivable from Federal-Mogul Bankruptcy estate (received in
Oct. 2008)
    
    $
    141.0Insurance receivable for previously paid claims and
insurance settlements
    
    
    72.7Insurance available for pending and future claims
    
    
    119.6Total estimated asbestos receivable at end of period
    
    $
    333.3
  Asbestos Liability Estimate
     -16-




---



##### Table of Contents



Asbestos Receivable Estimate
   Critical Accounting Assumptions
   Note 14. Consolidating Financial Information
  -17-




---



##### Table of Contents



Consolidating Income Statements
Three Months Ended September 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,020.0
    
    
    $
    811.9
    
    
    $
    (104.2
    )
    
    $
    1,727.7Cost of sales
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    2.3
    
    
    
    728.2
    
    
    
    543.9
    
    
    
    (104.2
    )
    
    
    1,170.0Selling and administrative
expenses
    
    
    2.4
    
    
    
    3.4
    
    
    
    19.5
    
    
    
    145.0
    
    
    
    141.5
    
    
    
    (4.0
    )
    
    
    307.8Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense, net
    
    
    
    
    
    
    4.0
    
    
    
    13.2
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    17.3Equity in earnings of
subsidiaries, net of tax
    
    
    250.2
    
    
    
    13.3
    
    
    
    149.0
    
    
    
    23.1
    
    
    
    171.7
    
    
    
    (607.3
    )
    
    
    Intercompany income
(expense)
    
    
    (10.4
    )
    
    
    (11.5
    )
    
    
    30.5
    
    
    
    (44.9
    )
    
    
    72.0
    
    
    
    (35.7
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    237.5
    
    
    
    (5.5
    )
    
    
    144.5
    
    
    
    125.0
    
    
    
    370.1
    
    
    
    (639.0
    )
    
    
    232.6Income tax expense
(benefit)
    
    
    
    
    
    
    (7.1
    )
    
    
    (27.3
    )
    
    
    34.9
    
    
    
    42.9
    
    
    
    
    
    
    
    43.4Income from continuing
operations
    
    
    237.5
    
    
    
    1.6
    
    
    
    171.8
    
    
    
    90.1
    
    
    
    327.2
    
    
    
    (639.0
    )
    
    
    189.2Income related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    16.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.6Net income (loss)
    
    $
    237.5
    
    
    $
    18.2
    
    
    $
    171.8
    
    
    $
    90.1
    
    
    $
    327.2
    
    
    $
    (639.0
    )
    
    $
    205.8
 Consolidating Income Statements
Three Months Ended September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    956.5
    
    
    $
    622.0
    
    
    $
    (77.2
    )
    
    $
    1,501.3Cost of sales
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    664.2
    
    
    
    420.1
    
    
    
    (77.2
    )
    
    
    1,008.1Selling and administrative
expenses
    
    
    1.8
    
    
    
    8.9
    
    
    
    17.1
    
    
    
    140.2
    
    
    
    108.7
    
    
    
    
    
    
    
    276.7Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.5
    
    
    
    
    
    
    
    23.5Interest expense, net
    
    
    (0.3
    )
    
    
    5.6
    
    
    
    8.1
    
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    12.3Equity in earnings of
subsidiaries, net of tax
    
    
    211.0
    
    
    
    10.0
    
    
    
    112.8
    
    
    
    26.3
    
    
    
    116.7
    
    
    
    (476.8
    )
    
    
    Intercompany income
(expense)
    
    
    (8.8
    )
    
    
    (9.2
    )
    
    
    15.7
    
    
    
    (39.6
    )
    
    
    70.6
    
    
    
    (28.7
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    200.7
    
    
    
    (13.7
    )
    
    
    102.3
    
    
    
    138.8
    
    
    
    305.1
    
    
    
    (505.5
    )
    
    
    227.7Income tax expense
(benefit)
    
    
    
    
    
    
    (9.4
    )
    
    
    (14.6
    )
    
    
    42.4
    
    
    
    37.4
    
    
    
    
    
    
    
    55.8Income from continuing
operations
    
    
    200.7
    
    
    
    (4.3
    )
    
    
    116.9
    
    
    
    96.4
    
    
    
    267.7
    
    
    
    (505.5
    )
    
    
    171.9Income related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    200.7
    
    
    $
    (4.3
    )
    
    $
    116.9
    
    
    $
    96.4
    
    
    $
    267.7
    
    
    $
    (505.5
    )
    
    $
    171.9
 -18-




---



##### Table of Contents



Consolidating Income Statements
Nine Months Ended September 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,945.1
    
    
    $
    2,344.2
    
    
    $
    (291.2
    )
    
    $
    4,998.1Cost of sales
    
    
    (0.2
    )
    
    
    (0.3
    )
    
    
    5.4
    
    
    
    2,065.4
    
    
    
    1,576.6
    
    
    
    (291.2
    )
    
    
    3,355.7Selling and administrative
expenses
    
    
    7.9
    
    
    
    9.4
    
    
    
    62.6
    
    
    
    432.4
    
    
    
    424.6
    
    
    
    (13.2
    )
    
    
    923.7Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense, net
    
    
    
    
    
    
    14.2
    
    
    
    37.9
    
    
    
    
    
    
    
    (1.6
    )
    
    
    
    
    
    
    50.5Equity in earnings of
subsidiaries, net of tax
    
    
    649.7
    
    
    
    25.9
    
    
    
    380.3
    
    
    
    88.3
    
    
    
    416.4
    
    
    
    (1,560.6
    )
    
    
    Intercompany income
(expense)
    
    
    (29.9
    )
    
    
    (30.9
    )
    
    
    89.1
    
    
    
    (127.5
    )
    
    
    203.4
    
    
    
    (104.2
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    612.1
    
    
    
    (28.3
    )
    
    
    363.5
    
    
    
    408.1
    
    
    
    964.4
    
    
    
    (1,651.6
    )
    
    
    668.2Income tax expense
(benefit)
    
    
    
    
    
    
    (20.4
    )
    
    
    (52.9
    )
    
    
    123.2
    
    
    
    113.8
    
    
    
    
    
    
    
    163.7Income from continuing
operations
    
    
    612.1
    
    
    
    (7.9
    )
    
    
    416.4
    
    
    
    284.9
    
    
    
    850.6
    
    
    
    (1,651.6
    )
    
    
    504.5Income related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    16.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.6Net income (loss)
    
    $
    612.1
    
    
    $
    8.7
    
    
    $
    416.4
    
    
    $
    284.9
    
    
    $
    850.6
    
    
    $
    (1,651.6
    )
    
    $
    521.1
 Consolidating Income Statements
Nine Months Ended September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,818.1
    
    
    $
    1,741.2
    
    
    $
    (200.3
    )
    
    $
    4,359.0Cost of sales
    
    
    
    
    
    
    0.1
    
    
    
    1.8
    
    
    
    1,967.8
    
    
    
    1,168.2
    
    
    
    (200.3
    )
    
    
    2,937.6Selling and administrative
expenses
    
    
    7.2
    
    
    
    16.6
    
    
    
    51.6
    
    
    
    410.7
    
    
    
    315.1
    
    
    
    
    
    
    
    801.2Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26.8
    
    
    
    
    
    
    
    26.8Interest expense, net
    
    
    (1.3
    )
    
    
    28.0
    
    
    
    15.5
    
    
    
    
    
    
    
    (4.1
    )
    
    
    
    
    
    
    38.1Equity in earnings of
subsidiaries, net of tax
    
    
    628.6
    
    
    
    31.0
    
    
    
    319.5
    
    
    
    71.4
    
    
    
    396.6
    
    
    
    (1,447.1
    )
    
    
    Intercompany income
(expense)
    
    
    (23.7
    )
    
    
    (18.0
    )
    
    
    44.1
    
    
    
    (123.4
    )
    
    
    207.0
    
    
    
    (86.0
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    599.0
    
    
    
    (31.7
    )
    
    
    294.7
    
    
    
    387.6
    
    
    
    892.4
    
    
    
    (1,533.1
    )
    
    
    608.9Income tax expense
(benefit)
    
    
    
    
    
    
    (24.2
    )
    
    
    (102.0
    )
    
    
    119.2
    
    
    
    102.9
    
    
    
    
    
    
    
    95.9Income from continuing
operations
    
    
    599.0
    
    
    
    (7.5
    )
    
    
    396.7
    
    
    
    268.4
    
    
    
    789.5
    
    
    
    (1,533.1
    )
    
    
    513.0Income related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    599.0
    
    
    $
    (7.5
    )
    
    $
    396.7
    
    
    $
    268.4
    
    
    $
    789.5
    
    
    $
    (1,533.1
    )
    
    $
    513.0
 -19-




---



##### Table of Contents



Consolidating Balance Sheets
September 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    
    
    
    $
    1.4
    
    
    $
    96.8
    
    
    $
    3.3
    
    
    $
    159.2
    
    
    $
    
    
    
    $
    260.7Investments
    
    
    
    
    
    
    
    
    
    
    35.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35.6Receivables
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    603.3
    
    
    
    594.2
    
    
    
    
    
    
    
    1,197.6Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    385.1
    
    
    
    331.0
    
    
    
    
    
    
    
    716.1Current discontinued
operations receivable
    
    
    
    
    
    
    158.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    158.5Deferred income taxes and
other current assets
    
    
    
    
    
    
    (0.4
    )
    
    
    54.3
    
    
    
    27.5
    
    
    
    87.0
    
    
    
    
    
    
    
    168.4Total current assets
    
    
    
    
    
    
    159.5
    
    
    
    186.8
    
    
    
    1,019.2
    
    
    
    1,171.4
    
    
    
    
    
    
    
    2,536.9Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    60.8
    
    
    
    324.3
    
    
    
    364.0
    
    
    
    
    
    
    
    749.1Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,263.5
    
    
    
    1,390.9
    
    
    
    
    
    
    
    2,654.4Investment in subsidiaries
    
    
    5,786.9
    
    
    
    621.9
    
    
    
    5,151.0
    
    
    
    1,142.7
    
    
    
    4,078.1
    
    
    
    (16,780.6
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    3,022.7
    
    
    
    
    
    
    
    312.7
    
    
    
    (3,335.4
    )
    
    
    Intercompany accounts
receivable
    
    
    
    
    
    
    822.3
    
    
    
    
    
    
    
    1,450.7
    
    
    
    941.0
    
    
    
    (3,214.0
    )
    
    
    Intercompany notes
receivable
    
    
    5.4
    
    
    
    24.0
    
    
    
    1,358.1
    
    
    
    0.2
    
    
    
    4,515.4
    
    
    
    (5,903.1
    )
    
    
    Long-term discontinued
operations receivable
    
    
    
    
    
    
    174.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174.8Deferred income taxes and
other noncurrent assets
    
    
    
    
    
    
    241.0
    
    
    
    (15.6
    )
    
    
    (97.4
    )
    
    
    264.3
    
    
    
    
    
    
    
    392.3Total assets
    
    $
    5,792.3
    
    
    $
    2,043.5
    
    
    $
    9,763.8
    
    
    $
    5,103.2
    
    
    $
    13,037.8
    
    
    $
    (29,233.1
    )
    
    $
    6,507.5Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    10.0
    
    
    $
    
    
    
    $
    22.9
    
    
    $
    
    
    
    $
    32.9Accounts payable
    
    
    43.5
    
    
    
    6.7
    
    
    
    22.8
    
    
    
    256.0
    
    
    
    259.7
    
    
    
    
    
    
    
    588.7Accrued liabilities
    
    
    10.9
    
    
    
    32.4
    
    
    
    78.4
    
    
    
    249.0
    
    
    
    222.0
    
    
    
    
    
    
    
    592.7Current discontinued
operations liability
    
    
    
    
    
    
    50.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50.7Current maturities of
long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total current liabilities
    
    
    54.4
    
    
    
    89.8
    
    
    
    111.2
    
    
    
    505.0
    
    
    
    504.6
    
    
    
    
    
    
    
    1,265.0Long-term debt
    
    
    
    
    
    
    277.2
    
    
    
    922.0
    
    
    
    8.0
    
    
    
    0.3
    
    
    
    
    
    
    
    1,207.5Intercompany accounts
payable
    
    
    9.7
    
    
    
    
    
    
    
    3,204.3
    
    
    
    
    
    
    
    
    
    
    
    (3,214.0
    )
    
    
    Intercompany notes
payable
    
    
    1,042.6
    
    
    
    844.1
    
    
    
    1,810.0
    
    
    
    1,742.0
    
    
    
    464.4
    
    
    
    (5,903.1
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    772.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    772.6Deferred income taxes and
other long-term liabilities
    
    
    
    
    
    
    44.4
    
    
    
    49.8
    
    
    
    45.6
    
    
    
    175.4
    
    
    
    
    
    
    
    315.2Total liabilities
    
    
    1,106.7
    
    
    
    2,028.1
    
    
    
    6,097.3
    
    
    
    2,300.6
    
    
    
    1,144.7
    
    
    
    (9,117.1
    )
    
    
    3,560.3Class 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
    
    
    3,368.3
    
    
    
    
    
    
    
    752.3
    
    
    
    1,448.1
    
    
    
    7,415.2
    
    
    
    (12,983.9
    )
    
    
    Retained earnings
    
    
    1,291.9
    
    
    
    103.4
    
    
    
    2,887.3
    
    
    
    1,353.6
    
    
    
    4,211.9
    
    
    
    (6,792.5
    )
    
    
    3,055.6Accumulated other non-
owner changes in equity
    
    
    22.3
    
    
    
    (88.0
    )
    
    
    (143.1
    )
    
    
    0.9
    
    
    
    (105.4
    )
    
    
    203.2
    
    
    
    (110.1
    )Total shareholders equity
    
    
    4,685.6
    
    
    
    15.4
    
    
    
    3,666.5
    
    
    
    2,802.6
    
    
    
    11,893.1
    
    
    
    (20,116.0
    )
    
    
    2,947.2Total liabilities and
shareholders equity
    
    $
    5,792.3
    
    
    $
    2,043.5
    
    
    $
    9,763.8
    
    
    $
    5,103.2
    
    
    $
    13,037.8
    
    
    $
    (29,233.1
    )
    
    $
    6,507.5
 -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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Deferred income taxes and
other 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
Nine Months Ended September 30, 2008
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (29.5
    )
    
    $
    (17.7
    )
    
    $
    (26.8
    )
    
    $
    159.0
    
    
    $
    484.8
    
    
    $
    
    
    
    $
    569.8Cash flows from investing
activities:Proceeds from short-term
investments
    
    
    
    
    
    
    
    
    
    
    56.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56.4Proceeds from cash restricted for
business acquisitions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    290.1
    
    
    
    
    
    
    
    290.1Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (11.9
    )
    
    
    (37.4
    )
    
    
    (46.2
    )
    
    
    
    
    
    
    (95.5
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (270.8
    )
    
    
    
    
    
    
    (270.8
    )Investments in affiliates
    
    
    
    
    
    
    
    
    
    
    (18.0
    )
    
    
    (3.3
    )
    
    
    
    
    
    
    21.3
    
    
    
    Loans to affiliates
    
    
    (189.8
    )
    
    
    
    
    
    
    (568.2
    )
    
    
    
    
    
    
    (751.3
    )
    
    
    1,509.3
    
    
    
    Repayments of loans from affiliates
    
    
    346.8
    
    
    
    1.8
    
    
    
    358.4
    
    
    
    0.1
    
    
    
    590.4
    
    
    
    (1,297.5
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    96.1
    
    
    
    
    
    
    
    8.0
    
    
    
    (104.1
    )
    
    
    Proceeds from sales of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    (3.3
    )
    
    
    0.6
    
    
    
    1.8
    
    
    
    
    
    
    
    (0.9
    )Net cash provided by (used in)
investing activities
    
    
    157.0
    
    
    
    1.8
    
    
    
    (90.5
    )
    
    
    (40.0
    )
    
    
    (178.0
    )
    
    
    129.0
    
    
    
    (20.7
    )Cash flows from financing
activities:Proceeds from issuance of debt
    
    
    
    
    
    
    
    
    
    
    297.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    297.6Debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.6
    )Proceeds from debt derivatives
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5Repayments of debt
    
    
    
    
    
    
    (100.0
    )
    
    
    (218.7
    )
    
    
    
    
    
    
    (61.3
    )
    
    
    
    
    
    
    (380.0
    )Borrowings from affiliates
    
    
    1,083.7
    
    
    
    151.5
    
    
    
    42.6
    
    
    
    3.2
    
    
    
    228.3
    
    
    
    (1,509.3
    )
    
    
    Repayments of loans to affiliates
    
    
    (850.9
    )
    
    
    
    
    
    
    (97.5
    )
    
    
    (3.0
    )
    
    
    (346.1
    )
    
    
    1,297.5
    
    
    
    Other intercompany financing
activities
    
    
    (2.2
    )
    
    
    (34.2
    )
    
    
    325.1
    
    
    
    (114.8
    )
    
    
    (187.1
    )
    
    
    13.2
    
    
    
    Dividends
    
    
    (126.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126.9
    )Dividends paid to affiliates
    
    
    (104.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104.1
    
    
    
    Purchase of common shares
    
    
    (141.6
    )
    
    
    
    
    
    
    (183.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (325.2
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    8.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.6Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.3
    
    
    
    (21.3
    )
    
    
    Proceeds from exercise of stock
options
    
    
    13.2
    
    
    
    
    
    
    
    17.0
    
    
    
    
    
    
    
    
    
    
    
    (13.2
    )
    
    
    17.0Net cash provided by (used in)
financing activities
    
    
    (128.8
    )
    
    
    17.3
    
    
    
    191.0
    
    
    
    (114.6
    )
    
    
    (344.9
    )
    
    
    (129.0
    )
    
    
    (509.0
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.2
    )
    
    
    
    
    
    
    (12.2
    )Increase (decrease) in cash and cash
equivalents
    
    
    (1.3
    )
    
    
    1.4
    
    
    
    73.7
    
    
    
    4.4
    
    
    
    (50.3
    )
    
    
    
    
    
    
    27.9Cash and cash equivalents,
beginning of period
    
    
    1.3
    
    
    
    
    
    
    
    23.1
    
    
    
    (1.1
    )
    
    
    209.5
    
    
    
    
    
    
    
    232.8Cash and cash equivalents, end of
period
    
    $
    
    
    
    $
    1.4
    
    
    $
    96.8
    
    
    $
    3.3
    
    
    $
    159.2
    
    
    $
    
    
    
    $
    260.7
 -22-




---



##### Table of Contents



Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (19.7
    )
    
    $
    (61.8
    )
    
    $
    83.5
    
    
    $
    135.1
    
    
    $
    326.2
    
    
    $
    
    
    
    $
    463.3Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (26.5
    )
    
    
    (39.4
    )
    
    
    (25.1
    )
    
    
    
    
    
    
    (91.0
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75.0
    )
    
    
    (119.5
    )
    
    
    
    
    
    
    (194.5
    )Investments in affiliates
    
    
    
    
    
    
    
    
    
    
    (45.8
    )
    
    
    (17.1
    )
    
    
    
    
    
    
    62.9
    
    
    
    Loans to affiliates
    
    
    (110.1
    )
    
    
    
    
    
    
    (355.1
    )
    
    
    
    
    
    
    (859.3
    )
    
    
    1,324.5
    
    
    
    Repayments of loans from affiliates
    
    
    151.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    603.5
    
    
    
    (755.3
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    79.3
    
    
    
    33.8
    
    
    
    6.7
    
    
    
    (119.8
    )
    
    
    Proceeds from sale of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    
    
    
    
    0.8Net cash provided by (used in)
investing activities
    
    
    41.7
    
    
    
    
    
    
    
    (348.1
    )
    
    
    (97.3
    )
    
    
    (393.3
    )
    
    
    512.3
    
    
    
    (284.7
    )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
    
    
    
    
    
    
    (300.0
    )
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (303.0
    )Borrowings from affiliates
    
    
    622.7
    
    
    
    354.2
    
    
    
    347.6
    
    
    
    
    
    
    
    
    
    
    
    (1,324.5
    )
    
    
    Repayments of loans to affiliates
    
    
    (416.4
    )
    
    
    
    
    
    
    (337.2
    )
    
    
    
    
    
    
    (1.7
    )
    
    
    755.3
    
    
    
    Other intercompany financing
Activities
    
    
    182.5
    
    
    
    7.6
    
    
    
    (177.0
    )
    
    
    (36.2
    )
    
    
    23.1
    
    
    
    
    
    
    
    Dividends
    
    
    (116.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (116.2
    )Dividends paid to affiliates
    
    
    (86.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33.8
    )
    
    
    119.8
    
    
    
    Purchase of common shares
    
    
    (192.9
    )
    
    
    
    
    
    
    (81.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (274.8
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    19.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.6Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62.9
    
    
    
    (62.9
    )
    
    
    Proceeds from exercise of stock
options
    
    
    
    
    
    
    
    
    
    
    54.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.7Net cash provided by (used in)
financing activities
    
    
    (6.3
    )
    
    
    61.8
    
    
    
    133.1
    
    
    
    (36.2
    )
    
    
    54.2
    
    
    
    (512.3
    )
    
    
    (305.7
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.0
    
    
    
    
    
    
    
    11.0Increase (decrease) in cash and cash
equivalents
    
    
    15.7
    
    
    
    
    
    
    
    (131.5
    )
    
    
    1.6
    
    
    
    (1.9
    )
    
    
    
    
    
    
    (116.1
    )Cash and cash equivalents,
beginning of period
    
    
    11.5
    
    
    
    
    
    
    
    204.9
    
    
    
    (2.8
    )
    
    
    209.9
    
    
    
    
    
    
    
    423.5Cash and cash equivalents, end of
period
    
    $
    27.2
    
    
    $
    
    
    
    $
    73.4
    
    
    $
    (1.2
    )
    
    $
    208.0
    
    
    $
    
    
    
    $
    307.4
 -23-




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##### Table of Contents



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




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Operating Earnings:
    Income Taxes:
  -25-




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Income Related to Discontinued Operations:
  Nine Months Ended September 30, 2008 Compared With Nine Months Ended September 30, 2007
  Revenues:
    Costs and Expenses:
  -26-




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Operating Earnings:
  -27-




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##### Table of Contents



Income Taxes:
  Income Related to Discontinued Operations:
  Liquidity and Capital Resources
 Liquidity
   -28-




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##### Table of Contents



-29-




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##### Table of Contents



Capital Resources:
        Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
  -30-




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##### Table of Contents



Backlog
  September 30,2008
    
    
    2007(in millions)Electrical Products
    
    $
    773.9
    
    
    $
    640.7Tools
    
    
    83.2
    
    
    
    79.4$
    857.1
    
    
    $
    720.1
 Private Securities Litigation Reform Act Safe Harbor Statement
  
 Item 4. Controls and Procedures
   -31-




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##### Table of Contents



PART II  OTHER INFORMATION
 
  Discontinued Operations Liability
  2005 - 2007
    -32-




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##### Table of Contents



2008
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(in millions)Accrual at beginning of period (under Plan A)
    
    $
    521.3
    
    
    $
    543.0
    
    
    $
    509.1
    
    
    $
    529.6Indemnity and defense payments
    
    
    (5.0
    )
    
    
    (19.4
    )
    
    
    (16.9
    )
    
    
    (44.0
    )Insurance recoveries
    
    
    
    
    
    
    
    
    
    
    25.4
    
    
    
    39.3Other
    
    
    (0.3
    )
    
    
    (2.5
    )
    
    
    (1.6
    )
    
    
    (3.8
    )Accrual at end of period (under Plan A) *
    
    $
    516.0
    
    
    $
    521.1
    
    
    $
    516.0
    
    
    $
    521.1
 
 *
    
    The $516.0 million liability reflects the estimated liability under Plan A
immediately prior to revising the accounting on September 30, 2008 to reflect the Plan
B Settlement. -33-




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##### Table of Contents



September30, 2008(in millions)Asbestos liability analysis:Liability for unpaid indemnity and defense costs incurred
    
    $
    6.5Liability for pending and future indemnity and defense costs
    
    
    816.8Total estimated asbestos liability at end of period
    
    $
    823.3Asbestos receivable analysisReceivable from Federal-Mogul Bankruptcy estate (received in
Oct. 2008)
    
    $
    141.0Insurance receivable for previously paid claims and
insurance settlements
    
    
    72.7Insurance available for pending and future claims
    
    
    119.6Total estimated asbestos receivable at end of period
    
    $
    333.3
  Asbestos Liability Estimate
     Asbestos Receivable Estimate
  -34-




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Critical Accounting Assumptions
   Other Matters
  
   -35-




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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 6/30/08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,778,9687/01/08  7/31/08
    
    
    996,646
    
    
    $
    38.27
    
    
    
    996,646
    
    
    
    9,782,3228/01/08  8/31/08
    
    
    34,750
    
    
    $
    42.14
    
    
    
    34,750
    
    
    
    9,747,5729/01/08  9/30/08
    
    
    64,023
    
    
    $
    42.00
    
    
    
    64,023
    
    
    
    9,683,549Total
    
    
    1,095,419
    
    
    $
    38.61
    
    
    
    1,095,419
 
 (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 8.4 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. 
   
   
  12.1
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2003
through 2007 and the Nine Months Ended September 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.
 -36-




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Cooper Industries, Ltd.

(Registrant)Date: November 5, 2008
    
    /s/ Terry A. KlebeTerry A. Klebe, Senior Vice President andChief Financial OfficerDate: November 5, 2008
    
    /s/ Rick L. JohnsonRick L. Johnson, Vice President, Controller andChief Accounting Officer
 -37-




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##### Table of Contents



12.1
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2003
through 2007 and the Nine Months Ended September 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.