<PAGE>

                                      10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                       For the quarter ended June 30, 2003

                                       OR

[ ]      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.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Bermuda                                       98-0355628
--------------------------------------------------------------------------------
     (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                        Identification No.)

         600 Travis, Suite 5800                           Houston, Texas 77002
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

                                 (713) 209-8400
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

________________________________________________________________________________
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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

Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes [X] No [ ]

Number of registrant's common stock outstanding as of July 31, 2003 was
92,045,326 Class A common shares that are held by the public, 1,426,196 Class A
common shares that are held by the issuer's subsidiary, Cooper Industries, Inc.,
and 56,676,142 Class B common shares that are held by Cooper Industries, Inc.

<PAGE>

PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS
                             COOPER INDUSTRIES, LTD.
                         CONSOLIDATED INCOME STATEMENTS

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                   JUNE 30,                            JUNE 30,
                                                        ------------------------------     -------------------------------
                                                             2003             2002              2003              2002
                                                        -------------     ------------     -------------      ------------
                                                                          (in millions, where applicable)
<S>                                                     <C>               <C>              <C>                <C>
Revenues.............................................   $     1,010.9     $    1,001.2     $     1,968.7      $    1,976.2

Cost of sales........................................           716.7            716.6           1,391.4           1,418.0

Selling and administrative expenses..................           194.9            177.8             387.2             363.0

Restructuring........................................           (14.3)               -             (14.3)                -
                                                        -------------     ------------     -------------      ------------
    Operating earnings...............................           113.6            106.8             204.4             195.2

Interest expense, net................................            19.5             17.4              39.6              34.3
                                                        -------------     ------------     -------------      ------------
    Income before income taxes.......................            94.1             89.4             164.8             160.9

Income taxes.........................................            21.7             15.5              35.8              38.2
                                                        -------------     ------------     -------------      ------------
    Net income.......................................   $        72.4     $       73.9     $       129.0      $      122.7
                                                        =============     ============     =============      ============

Income per common share:

    Basic............................................   $         .79     $        .79     $        1.40      $       1.31
                                                        =============     ============     =============      ============
    Diluted..........................................   $         .78     $        .78     $        1.39      $       1.30
                                                        =============     ============     =============      ============

Cash dividends per common share......................   $         .35     $        .35     $         .70      $        .70
                                                        =============     ============     =============      ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                      - 2 -

<PAGE>

                             COOPER INDUSTRIES, LTD.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                        JUNE 30,            DECEMBER 31,
                                                                                          2003                  2002
                                                                                      ------------          -----------
                                      ASSETS                                                    (in millions)
<S>                                                                                   <C>                   <C>
Cash and cash equivalents........................................................     $      168.9          $     302.0
Receivables......................................................................            764.6                706.7
Inventories......................................................................            611.3                580.5
Deferred income taxes and other current assets...................................            136.8                 99.8
                                                                                      ------------          -----------
         Total current assets....................................................          1,681.6              1,689.0
                                                                                      ------------          -----------
Property, plant and equipment, less accumulated depreciation.....................            729.5                750.2
Goodwill.........................................................................          2,024.6              1,996.2
Deferred income taxes and other noncurrent assets................................            192.1                252.5
                                                                                      ------------          -----------
         Total assets............................................................     $    4,627.8          $   4,687.9
                                                                                      ============          ===========

                       LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt..................................................................     $        8.5          $       4.1
Accounts payable.................................................................            312.5                312.2
Accrued liabilities..............................................................            433.3                489.4
Current maturities of long-term debt.............................................              3.5                153.8
                                                                                      ------------          -----------
         Total current liabilities...............................................            757.8                959.5
                                                                                      ------------          -----------
Long-term debt...................................................................          1,301.9              1,280.7
Postretirement benefits other than pensions......................................            185.1                189.1
Other long-term liabilities......................................................            293.1                256.2
                                                                                      ------------          -----------
         Total liabilities.......................................................          2,537.9              2,685.5
                                                                                      ------------          -----------
Common stock, $.01 par value ....................................................              0.9                  0.9
Capital in excess of par value...................................................            435.2                422.7
Retained earnings................................................................          1,808.7              1,744.2
Accumulated other nonowner changes in equity.....................................           (154.9)              (165.4)
                                                                                      ------------          -----------
         Total shareholders' equity..............................................          2,089.9              2,002.4
                                                                                      ------------          -----------
         Total liabilities and shareholders' equity..............................     $    4,627.8          $   4,687.9
                                                                                      ============          ===========
</TABLE>

The accompanying notes are an integral part of these statements.

                                      - 3 -

<PAGE>

                             COOPER INDUSTRIES, LTD.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            SIX MONTHS ENDED
                                                                                                JUNE 30,
                                                                                  -----------------------------------
                                                                                        2003                2002
                                                                                  ---------------        ------------
                                                                                              (in millions)
<S>                                                                               <C>                    <C>
Cash flows from operating activities:
    Net income..................................................................  $         129.0        $      122.7

Adjustments to reconcile to net cash provided by operating activities:
    Depreciation and amortization...............................................             61.8                60.7
    Deferred income taxes.......................................................             61.7                18.0
    Restructuring charge payments...............................................            (11.1)              (19.5)
    Changes in assets and liabilities: (1)
      Receivables...............................................................            (40.3)              (14.2)
      Inventories...............................................................            (17.6)               58.1
      Accounts payable and accrued liabilities..................................            (50.3)              (60.8)
      Other assets and liabilities, net.........................................            (15.1)               22.0
                                                                                  ---------------        ------------
              Net cash provided by operating activities.........................            118.1               187.0

Cash flows from investing activities:
    Capital expenditures........................................................            (33.9)              (27.8)
    Cash paid for acquired businesses...........................................                -                (1.1)
    Proceeds from sales of property, plant and equipment and other..............              5.9                 4.1
                                                                                  ---------------        ------------
              Net cash used in investing activities.............................            (28.0)              (24.8)

Cash flows from financing activities:
    Proceeds from issuances of debt.............................................              4.3               333.3
    Repayments of debt..........................................................           (167.2)             (334.0)
    Debt issuance costs.........................................................                -                (2.1)
    Dividends...................................................................            (64.5)              (65.3)
    Acquisition of treasury shares..............................................                -               (37.9)
    Subsidiary purchase of parent shares........................................             (5.4)                  -
    Activity under employee stock plans and other...............................              2.1                 2.3
                                                                                  ---------------        ------------
              Net cash used in financing activities.............................           (230.7)             (103.7)
Effect of exchange rate changes on cash and cash equivalents....................              7.5                (1.8)
                                                                                  ---------------        ------------
Increase (decrease) in cash and cash equivalents................................           (133.1)               56.7
Cash and cash equivalents, beginning of period..................................            302.0                11.5
                                                                                  ---------------        ------------
Cash and cash equivalents, end of period........................................  $         168.9        $       68.2
                                                                                  ===============        ============

(1) Net of the effects of translation.
</TABLE>

The accompanying notes are an integral part of these statements.

                                      - 4 -

<PAGE>

                             COOPER INDUSTRIES, LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.           ACCOUNTING POLICIES

         Basis of Presentation - The consolidated financial statements of Cooper
Industries, Ltd., a Bermuda company ("Cooper"), have been prepared in accordance
with generally accepted accounting principles in the United States. Cooper is
the parent company of Cooper Industries, Inc., an Ohio corporation ("Cooper
Ohio"), following a corporate reorganization ("the reorganization") that became
effective on May 22, 2002. The reorganization was effected through the merger of
Cooper Mergerco, Inc., an Ohio corporation, into Cooper Ohio. Cooper Ohio was
the surviving company in the merger and became an indirect, wholly-owned
subsidiary of Cooper. All outstanding shares of Cooper Ohio common stock were
automatically converted to Cooper Class A common shares. Cooper and its
subsidiaries continue to conduct the business previously conducted by Cooper
Ohio and its subsidiaries. The reorganization was accounted for as a
reorganization of entities under common control and accordingly, did not result
in changes in the historical consolidated carrying amounts of assets,
liabilities and shareholders' equity.

         The financial information presented as of any date other than December
31 has been prepared from the books and records without audit. Financial
information as of December 31 has been derived from Cooper's audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
financial information for the periods indicated, have been included. For further
information regarding Cooper's accounting policies, refer to the Consolidated
Financial Statements and related notes for the year ended December 31, 2002
included in Part IV of Cooper's 2002 Annual Report on Form 10-K.

         Recently Issued Accounting Standards - In January 2003, the Financial
Accounting Standards Board issued Interpretation No. 46, Consolidation of
Variable Interest Entities (the "Interpretation"), an interpretation of
Accounting Research Bulletin No. 51. The Interpretation requires the
consolidation of variable interest entities in which an enterprise absorbs a
majority of the entity's expected losses, receives a majority of the entity's
expected residual returns, or both, as a result of ownership, contractual or
other financial interest in the entity. Currently, entities are generally
consolidated by an enterprise when it has a controlling financial interest
through ownership of a majority voting interest in the entity. For variable
interest entities created before February 1, 2003 the Interpretation is
effective during the first interim period after June 15, 2003. Cooper is
currently evaluating the effects of the Interpretation.

NOTE 2.           STOCK-BASED COMPENSATION

         Under Cooper stock option plans, officers, directors and key employees
may be granted options to purchase Cooper's common stock at no less than 100% of
the market price on the date the option is granted. Options generally become
exercisable ratably over a three-year period commencing one year from the grant
date and have a maximum term of ten years. The plans also provide for the
granting of performance-based stock awards and restricted stock awards to
certain key executives that generally vest over periods ranging from three to
five years. Cooper also has an Employee Stock Purchase Plan which provides
employees an option to purchase common stock at a price that is the lesser of
85% of the market value on the offering date or 85% of the market value on the
purchase date.

         Effective January 1, 2003, Cooper adopted Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS No.
123"), as amended. Cooper utilized the prospective method of adoption. Cooper
accounts for stock-based compensation awards granted, modified or settled prior
to January 1, 2003 using the intrinsic value method of accounting as prescribed
by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees and related interpretations ("APB No. 25"). SFAS No. 123 provides an
alternative fair value based method for recognizing stock-based compensation in
which compensation expense is measured at the grant date based on the value of
the award

                                      - 5 -

<PAGE>

and is recognized over the service period, which is usually the vesting period.
The fair value of stock options granted in 2003 was estimated using the
Black-Scholes option-pricing model. The fair value of restricted stock and
performance-based awards granted in 2003 was measured at the market price on the
grant date. Total expense for stock-based compensation was $4.8 million for the
six months ended June 30, 2003. Previously accrued stock-based compensation of
$1.7 million related to performance based awards was reversed to income during
the six months ended June 30, 2002 as it was determined that certain performance
targets would not be met.

         The following table presents pro forma income and earnings per share as
if the fair value based method had been applied to all outstanding and unvested
awards in each period.

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED                      SIX MONTHS ENDED
                                                                JUNE 30,                               JUNE 30,
                                                       -----------------------------          ---------------------------
                                                           2003              2002                2003             2002
                                                       -----------        ----------          ----------       ----------
                                                                                   (in millions)
<S>                                                    <C>                <C>                 <C>              <C>
Net income, as reported.........................       $      72.4        $     73.9          $    129.0       $    122.7

Add: Stock-based employee compensation
  expense included in reported net income,
  net of related tax effects....................               1.6              (1.0)                2.8             (1.0)
Deduct: Total stock-based employee
  compensation expense determined under
  fair value based method for all awards,
  net of related tax effects....................              (3.4)             (0.4)               (8.1)            (4.3)
                                                       -----------        ----------          ----------       ----------

Pro forma net income............................       $      70.6        $     72.5          $    123.7       $    117.4
                                                       ===========        ==========          ==========       ==========

Earnings per share:
     Basic - as reported........................       $       .79        $      .79          $     1.40       $     1.31
     Basic - pro forma..........................       $       .77        $      .78          $     1.34       $     1.25
     Diluted - as reported......................       $       .78        $      .78          $     1.39       $     1.30
     Diluted - pro forma........................       $       .76        $      .77          $     1.34       $     1.25
</TABLE>

NOTE 3.           ACQUISITIONS

         During the first six months of 2002, Cooper paid $1.1 million related
to previously acquired businesses. The terms of a previous acquisition agreement
provided for additional consideration to be paid if earnings of the acquired
businesses exceeded certain targeted levels.

NOTE 4.           INVENTORIES

<TABLE>
<CAPTION>
                                                                                  JUNE 30,           DECEMBER 31,
                                                                                    2003                 2002
                                                                                -----------          -----------
                                                                                          (in millions)
<S>                                                                             <C>                  <C>
Raw materials................................................................   $     173.5          $     184.3
Work-in-process..............................................................         125.9                 99.5
Finished goods...............................................................         401.5                389.1
Perishable tooling and supplies..............................................          21.3                 20.8
                                                                                -----------          -----------
                                                                                      722.2                693.7
Allowance for excess and obsolete inventory..................................         (43.9)               (41.0)
Excess of current standard costs over LIFO costs.............................         (67.0)               (72.2)
                                                                                -----------          -----------
           Net inventories...................................................   $     611.3          $     580.5
                                                                                ===========          ===========
</TABLE>

                                      - 6 -

<PAGE>

NOTE 5.           LONG-TERM DEBT

         At June 30, 2003, $225 million of Cooper Ohio's existing shelf
registration to issue up to $500 million of debt securities remained available.
Cooper did not renew its $375 million committed bank credit facility which
matured on April 30, 2003.

NOTE 6.           SHAREHOLDERS' EQUITY

         At June 30, 2003, 91,948,311 Class A common shares, $.01 par value were
issued and outstanding (excluding the 1,427,209 Class A common shares held by
Cooper Ohio discussed below) compared to 91,709,144 Class A common shares, $.01
par value (excluding the 1,519,214 Class A common shares held by Cooper Ohio) at
December 31, 2002. During the first six months of 2003, Cooper issued 147,162
Class A common shares primarily to satisfy the matching obligation under the
Cooper Ohio Retirement Savings and Stock Ownership Plan and in connection with
employee benefit plans and Cooper's dividend reinvestment program. During the
first six months of 2003, Cooper Ohio purchased 152,500 Cooper Class A common
shares for $5.4 million. The share purchases are recorded by Cooper Ohio as an
investment in its parent company that is eliminated in consolidation. During the
first six months of 2003, 244,505 Cooper Class A common shares held by Cooper
Ohio were issued primarily to satisfy the matching obligation under the Cooper
Ohio Retirement Savings and Stock Ownership Plan, leaving 1,427,209 Cooper Class
A common shares held by Cooper Ohio at June 30, 2003.

         Cooper Ohio also owns all the issued and outstanding Cooper Class B
common shares. Cooper Ohio's investment in the Class B common shares is
eliminated in consolidation. If at any time a dividend is declared and paid on
the Cooper Class A common shares, a like dividend shall be declared and paid on
the Cooper Class B common shares in an equal amount per share. During the first
six months of 2003, Cooper Ohio waived its rights to receive the regular
quarterly dividends of $.35 per share (or an aggregate of $40.8 million) from
its parent, Cooper, on all shares held.

NOTE 7.           SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                                                  REVENUES
                                                         -----------------------------------------------------------
                                                             THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                  JUNE 30,                        JUNE 30,
                                                         ----------------------------    ---------------------------
                                                             2003            2002           2003            2002
                                                         ------------     -----------    -----------     -----------
                                                                                (in millions)
<S>                                                      <C>              <C>            <C>             <C>
Electrical Products...................................   $      839.0     $     843.3    $   1,643.2     $   1,662.8
Tools & Hardware......................................          171.9           157.9          325.5           313.4
                                                         ------------     -----------    -----------     -----------
   Total revenues.....................................   $    1,010.9     $   1,001.2    $   1,968.7     $   1,976.2
                                                         ============     ===========    ===========     ===========
</TABLE>

                                      - 7 -

<PAGE>

<TABLE>
<CAPTION>
                                                                            OPERATING EARNINGS
                                                           -----------------------------------------------------
                                                              THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                   JUNE 30,                      JUNE 30,
                                                           ------------------------      -----------------------
                                                             2003           2002           2003           2002
                                                           ---------      ---------      ---------     ---------
                                                                               (in millions)
<S>                                                        <C>            <C>            <C>           <C>
Electrical Products...................................     $   109.2      $   107.9      $   209.5     $   199.7
Tools & Hardware......................................           7.0            4.0           13.5           9.3
                                                           ---------      ---------      ---------     ---------
   Segment operating earnings.........................         116.2          111.9          223.0         209.0
Restructuring.........................................         (14.3)             -          (14.3)            -
General Corporate expenses............................          16.9            5.1           32.9          13.8
                                                           ---------      ---------      ---------     ---------
   Total operating earnings...........................         113.6          106.8          204.4         195.2
Interest expense, net.................................          19.5           17.4           39.6          34.3
                                                           ---------      ---------      ---------     ---------
Income before income taxes............................     $    94.1      $    89.4      $   164.8     $   160.9
                                                           =========      =========      =========     =========
</TABLE>

NOTE 8.           INCOME TAXES

         The reconciliation between the income tax rate computed by applying the
U.S. Federal statutory rate and the worldwide tax rate is presented below.

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED            SIX MONTHS ENDED
                                                               JUNE 30,                     JUNE 30,
                                                       ------------------------      ----------------------
                                                          2003          2002           2003          2002
                                                       ---------      ---------      ---------     --------
<S>                                                    <C>            <C>            <C>           <C>
U.S. Federal statutory rate.......................        35.0%          35.0%          35.0%         35.0%
State and local income taxes......................         3.3            2.4            3.3           2.4
Non U.S. Operations...............................       (16.6)         (18.7)         (16.6)        (12.3)
Extraterritorial income exclusion.................        (1.2)          (1.2)          (1.2)         (1.2)
Tax credits.......................................        (0.2)          (0.1)          (0.2)         (0.1)
Restructuring.....................................         3.1              -            1.7             -
Other.............................................        (0.3)          (0.1)          (0.3)         (0.1)
                                                       -------        -------        -------       -------
     Effective tax rate ..........................        23.1%          17.3%          21.7%         23.7%
                                                       =======        =======        =======       =======
</TABLE>

         Subject to review and approval by the Joint Committee on Taxation of
Congress, the Company has entered into a settlement with the Internal Revenue
Service covering taxable years 1994-1996 which also includes final disposition
of certain refund claims relating to tax years prior to 1994. As a result of
this settlement, the Company expects to receive a refund of approximately $60
million including interest. As noted, issuance of the refund requires review and
approval by the Joint Committee on Taxation. Consequently, the Company cannot be
certain of the timing or the ultimate amount of the total refund payment. As of
the date of this filing, the Company anticipates payment to be received as early
as the fourth quarter of 2003.

                                      - 8 -

<PAGE>

NOTE 9.           NET INCOME PER COMMON SHARE

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED              SIX MONTHS ENDED
                                                                   JUNE 30,                       JUNE 30,
                                                           ------------------------      --------------------------
                                                              2003          2002            2003          2002
                                                           ---------      ---------      ---------     ------------
                                                                               (in millions)
<S>                                                        <C>            <C>            <C>           <C>
BASIC:

Net income applicable to common stock.................     $    72.4      $    73.9      $   129.0     $      122.7
                                                           =========      =========      =========     ============

Weighted average common shares outstanding............          92.2           93.4           92.1             93.6
                                                           =========      =========      =========     ============
DILUTED:

Net income applicable to common stock.................     $    72.4      $    73.9      $   129.0     $      122.7
                                                           =========      =========      =========     ============

Weighted average common shares outstanding............          92.2           93.4           92.1             93.6

Incremental shares from assumed conversions:

    Options, performance-based stock
       awards and other employee awards...............           0.5            1.0            0.5              0.9
                                                           ---------      ---------      ---------     ------------

Weighted average common shares
    and common share equivalents......................          92.7           94.4           92.6             94.5
                                                           =========      =========      =========     ============
</TABLE>

Options and employee awards are not considered in the calculations if the effect
would be antidilutive.

NOTE 10.          NET INCOME AND OTHER NONOWNER CHANGES IN EQUITY

         The components of net income and other nonowner changes in equity, net
of related taxes, were as follows:

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                            JUNE 30,                           JUNE 30,
                                                  ---------------------------        ---------------------------
                                                     2003             2002               2003              2002
                                                  -----------     -----------        -----------     -----------
                                                                          (in millions)
<S>                                               <C>             <C>                <C>             <C>
Net income....................................    $      72.4     $      73.9        $     129.0     $     122.7
Foreign currency translation gains
    and losses................................           22.0             2.1               13.5            (3.1)
Change in fair value of derivatives...........           (2.9)            0.1               (3.0)            0.4
                                                  -----------     -----------        -----------     -----------
Net income and other nonowner
    changes in equity.........................    $      91.5     $      76.1        $     139.5     $     120.0
                                                  ===========     ===========        ===========     ===========
</TABLE>

NOTE 11.          RESTRUCTURING

         In 2001, Cooper accrued $35 million reflecting the contractual amounts
due to financial advisors associated with Cooper's strategic alternatives
review. Cooper paid $5 million to the advisors in the 2001 fourth quarter and
$15.7 million during 2002, leaving a balance of $14.3 million payable upon the
occurrence of certain events. During the second quarter of 2003, the terms of
the agreements with the financial advisors expired with the contingent events
that required payment not occurring. Accordingly, the accrual was reversed and
reflected as a $14.3 million negative restructuring charge ($8.6 million, net of
taxes) on the consolidated income statement.

         During the fourth quarter of 2002, Cooper committed to (1) the closure
of ten manufacturing facilities, (2) further employment reductions to
appropriately size Cooper's workforce to market conditions,

                                      - 9 -

<PAGE>

and (3) the write-off of assets related to production rationalization
activities. These actions were taken as a part of Cooper management's ongoing
assessment of required production capacity in consideration of current demand
levels. In connection with these commitments, certain production capacity and
related assets are being sold, outsourced, discontinued or moved to a lower cost
environment. Cooper recorded a provision for these announced actions of $39.1
million ($15.0 million of which is non-cash). Of this amount, $24.0 million
($11.0 million of which is non-cash) was associated with the Electrical Products
segment, $12.7 million ($3.4 million of which was non-cash) was associated with
the Tools & Hardware segment and the remainder was related to General Corporate.

         The following table reflects activity related to the fourth quarter
2002 restructuring charge.

<TABLE>
<CAPTION>
                                                                                                  FACILITIES
                                                            NUMBER OF        ACCRUED             CLOSURE AND
                                                            EMPLOYEES       SEVERANCE          RATIONALIZATION
                                                            ---------       ---------          ---------------
                                                                                  ($ in millions)
<C>                                                         <C>             <C>                <C>
2002 Restructuring charge.........................            1,206          $   18.3          $          20.8
Asset write-offs..................................                -                 -                    (15.0)
Employees terminated..............................             (184)                -                        -
Cash expenditures.................................                -              (2.1)                       -
                                                            -------          --------          ---------------
Balance at December 31, 2002......................            1,022              16.2                      5.8
Employees terminated..............................             (675)                -                        -
Cash expenditures.................................                -             (10.6)                    (0.5)
                                                            -------          --------          ---------------
Balance at June 30, 2003..........................              347          $    5.6          $           5.3
                                                            =======          ========          ===============
</TABLE>

         A total of 435 salaried and 771 hourly positions are scheduled to be
eliminated as a result of the planned closure and rationalization actions. Of
those planned position eliminations, approximately 600 positions will be
replaced ultimately as a result of Cooper's ongoing efforts to relocate
production capacity to lower cost locations. Substantially all of the closure
and rationalization activities will be initiated by the end of 2003 and are
scheduled to be substantially completed by the end of 2004.

         See "Restructuring" in Management's Discussion and Analysis of
Financial Condition and Results of Operations for additional information.

NOTE 12.          ASBESTOS LIABILITIES

         In October 1998, Cooper sold its Automotive Products business to
Federal-Mogul Corporation ("Federal-Mogul"). These discontinued businesses
(including the Abex product line obtained from Pneumo-Abex Corporation
("Pneumo") in 1994) were operated through subsidiary companies, and the stock of
those subsidiaries was sold to Federal-Mogul pursuant to a Purchase and Sale
Agreement dated August 17, 1998 ("1998 Agreement"). In conjunction with the
sale, Federal-Mogul indemnified Cooper for certain liabilities of these
subsidiary companies, including liabilities related to the Abex product line and
any potential liability that Cooper may have to Pneumo pursuant to a 1994 Mutual
Guaranty Agreement between Cooper and Pneumo. On October 1, 2001, Federal-Mogul
and several of its affiliates filed a Chapter 11 bankruptcy petition and
indicated that Federal-Mogul may not honor the indemnification obligations to
Cooper. As of the date of this filing, Federal-Mogul had not yet made a decision
whether to reject the 1998 Agreement, which includes the indemnification to
Cooper. If Federal-Mogul rejects the 1998 Agreement, Cooper will be relieved of
its future obligations under the 1998 Agreement, including specific indemnities
relating to payment of taxes and certain obligations regarding insurance for its
former Automotive Products businesses. To the extent Cooper is obligated to
Pneumo for any asbestos-related claims arising from the Abex product line ("Abex
Claims"), Cooper has rights, confirmed by Pneumo, to significant insurance for
such claims. Based on information provided by representatives of Federal-Mogul
and recent claims experience, from August 28, 1998 through June 30, 2003, a
total of 108,739 Abex Claims were filed, of which 50,689 claims have been
resolved leaving 58,050 Abex Claims pending at June 30, 2003, that are the
responsibility of Federal-Mogul. During the three months ended June 30, 2003,
5,438 claims were filed and 14,748 claims were resolved. Since August 28, 1998,
the average indemnity payment for resolved Abex Claims was $1,166 before
insurance. A total of $44.0 million was spent on defense costs for the period
August 28, 1998

                                     - 10 -

<PAGE>

through June 30, 2003. Historically, existing insurance coverage has provided
50% to 80% of the total defense and indemnity payments for Abex Claims.

         With the assistance of independent advisors, Bates White & Ballentine,
LLC, in the fourth quarter of 2001 Cooper completed a thorough analysis of its
potential exposure for asbestos liabilities in the event Federal-Mogul rejects
the 1998 Agreement. The analysis included a review of the twenty-year history of
Abex Claims; the average indemnity payments for resolved claims; the
jurisdictions in which claims had been filed; Bates White & Ballentine, LLC data
on the incidence of asbestos exposure and diseases in various industries;
existing insurance coverage including the insurance recovered by Pneumo and
Federal-Mogul for pre-bankruptcy claims and the contractual indemnities.
Assumptions were made regarding future claim filings and indemnity payments,
and, based on the advisor's data, the expected population of persons exposed to
asbestos in particular industries. All of this data was used to determine a
reasonable expectation of future claims, indemnity payments and insurance
coverage. At this time, the manner in which this issue ultimately will be
resolved is not known. Cooper is preserving its rights as a creditor for breach
of Federal-Mogul's indemnification to Cooper and its rights against all
Federal-Mogul subsidiaries. Cooper intends to take all actions to seek a
resolution of the indemnification issues and future handling of the Abex-related
claims within the Federal-Mogul bankruptcy proceedings. At June 30, 2003, the
accrual for potential liabilities related to the Federal-Mogul bankruptcy was
$76.4 million.

NOTE 13.          CONSOLIDATING FINANCIAL INFORMATION

         Cooper fully and unconditionally guarantees the registered debt
securities of Cooper Ohio, a wholly-owned indirect subsidiary. The following
condensed consolidating financial information is included so that separate
financial statements of Cooper Ohio are not required to be filed with the
Securities and Exchange Commission. The consolidating financial statements
present investments in subsidiaries using the equity method of accounting.
Intercompany investments in the Class A and Class B common shares are accounted
for using the cost method.

                         CONSOLIDATING INCOME STATEMENTS
                        THREE MONTHS ENDED JUNE 30, 2003
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     ------------    -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Revenues..............................    $        -      $       70.0     $      944.6     $     (3.7)      $  1,010.9
Cost of sales.........................             -              46.2            674.2           (3.7)           716.7
Selling and administrative expenses...           1.8              25.6            167.5              -            194.9
Restructuring.........................             -             (14.3)               -              -            (14.3)
Interest expense, net.................          (0.1)             14.1              5.5              -             19.5
Equity in earnings of subsidiaries,
     net of tax.......................          74.5              94.7             29.0         (198.2)               -
Intercompany income (expense)........            0.3             (82.8)            83.2           (0.7)               -
                                          ----------      ------------     ------------     ----------       ----------
     Income before income taxes.......          73.1              10.3            209.6         (198.9)            94.1
Income tax expense (benefit)..........             -             (18.7)            40.4              -             21.7
                                          ----------      ------------     ------------     ----------       ----------
    Net income........................    $     73.1      $       29.0     $      169.2     $   (198.9)      $     72.4
                                          ==========      ============     ============     ==========       ==========
</TABLE>

                                     - 11 -

<PAGE>

                         CONSOLIDATING INCOME STATEMENTS
                        THREE MONTHS ENDED JUNE 30, 2002
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Revenues..............................    $        -      $       75.7     $       930.1    $     (4.6)      $  1,001.2
Cost of sales.........................             -              46.5             674.7          (4.6)           716.6
Selling and administrative expenses...           0.1              18.4             159.3             -            177.8
Interest expense, net.................             -              12.2               5.2             -             17.4
Equity in earnings of subsidiaries,
     net of tax.......................          19.6              87.1                 -        (106.7)               -
Intercompany income (expense)........           65.4            (109.9)             44.5             -                -
                                          ----------      ------------     -------------    ----------       ----------
     Income (loss) before income taxes          84.9             (24.2)            135.4        (106.7)            89.4
Income tax expense (benefit)..........             -             (13.2)             28.7             -             15.5
                                          ----------      ------------     -------------    ----------       ----------
    Net income (loss).................    $     84.9      $      (11.0)    $       106.7    $   (106.7)      $     73.9
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                         SIX MONTHS ENDED JUNE 30, 2003
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Revenues..............................    $        -      $      137.4     $     1,841.3    $    (10.0)      $  1,968.7
Cost of sales.........................             -              90.3           1,311.1         (10.0)         1,391.4
Selling and administrative expenses...           3.9              49.5             333.8             -            387.2
Restructuring.........................             -             (14.3)                -             -            (14.3)
Interest expense, net.................          (0.1)             29.1              10.6             -             39.6
Equity in earnings of subsidiaries,
     net of tax.......................         133.5             181.5              42.8        (357.8)               -
Intercompany income (expense).........           0.3            (186.0)            186.7          (1.0)               -
                                          ----------      ------------     -------------    ----------       ----------
     Income (loss) before income taxes         130.0             (21.7)            415.3        (358.8)           164.8
Income tax expense (benefit)..........             -             (64.5)            100.3             -             35.8
                                          ----------      ------------     -------------    ----------       ----------
     Net income.......................    $    130.0      $       42.8     $       315.0    $   (358.8)      $    129.0
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                         SIX MONTHS ENDED JUNE 30, 2002
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Revenues..............................    $        -      $      142.0     $     1,843.1    $     (8.9)      $  1,976.2
Cost of sales.........................             -              88.5           1,338.4          (8.9)         1,418.0
Selling and administrative expenses...           0.1              39.9             323.0             -            363.0
Interest expense, net.................             -              24.0              10.3             -             34.3
Equity in earnings of subsidiaries,
     net of tax.......................          19.6             172.7                 -        (192.3)               -
Intercompany income (expense).........          65.4            (160.9)             95.5             -                -
                                          ----------      ------------     -------------    ----------       ----------
     Income before income taxes.......          84.9               1.4             266.9        (192.3)           160.9
Income tax expense (benefit)..........             -             (36.4)             74.6             -             38.2
                                          ----------      ------------     -------------    ----------       ----------
     Net income.......................    $     84.9      $       37.8     $       192.3    $   (192.3)      $    122.7
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                                     - 12 -

<PAGE>

                          CONSOLIDATING BALANCE SHEETS
                                  JUNE 30, 2003
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>              <C>
Cash and cash equivalents.............    $     54.7      $       57.8     $        56.4    $        -       $    168.9
Receivables...........................           0.2              58.8             705.6             -            764.6
Intercompany receivables..............         464.7                 -             396.7        (861.4)               -
Inventories...........................             -              14.9             596.4             -            611.3
Deferred income taxes and other
    current assets....................           0.3              91.2              45.3             -            136.8
                                          ----------      ------------     -------------    ----------       ----------
       Total current assets...........         519.9             222.7           1,800.4        (861.4)         1,681.6
                                          ----------      ------------     -------------    ----------       ----------
Property, plant and equipment, less
    accumulated depreciation..........             -              54.4             675.1             -            729.5
Goodwill..............................             -              41.4           1,983.2             -          2,024.6
Investment in subsidiaries............       2,455.6           5,602.6              21.7      (8,079.9)               -
Investment in parent..................             -           2,370.0                 -      (2,370.0)               -
Intercompany notes receivable.........          15.1             100.2           4,766.8      (4,882.1)               -
Deferred income taxes and other
    noncurrent assets.................             -             204.8             (12.7)            -            192.1
                                          ----------      ------------     -------------    ----------       ----------
       Total assets...................    $  2,990.6      $    8,596.1     $     9,234.5    $(16,193.4)      $  4,627.8
                                          ==========      ============     =============    ==========       ==========

Short-term debt.......................    $        -      $          -     $         8.5    $        -       $      8.5
Accounts payable......................          32.2              30.6             249.7             -            312.5
Accrued liabilities...................           0.8             171.7             260.8             -            433.3
Intercompany payables.................             -             861.4                 -        (861.4)               -
Current maturities of long-term debt..             -               3.0               0.5             -              3.5
                                          ----------      ------------     -------------    ----------       ----------
       Total current liabilities......          33.0           1,066.7             519.5        (861.4)           757.8
                                          ----------      ------------     -------------    ----------       ----------
Long-term debt........................             -             917.0             384.9             -          1,301.9
Intercompany notes payable............             -           4,766.8             115.3      (4,882.1)               -
Other long-term liabilities...........             -             321.6             156.6             -            478.2
                                          ----------      ------------     -------------    ----------       ----------
       Total liabilities..............          33.0           7,072.1           1,176.3      (5,743.5)         2,537.9
                                          ----------      ------------     -------------    ----------       ----------
Class A common stock..................           0.9                 -                 -             -              0.9
Class B common stock..................           0.6                 -                 -          (0.6)               -
Subsidiary common stock...............             -                 -             141.0        (141.0)               -
Capital in excess of par value........       2,802.8               0.5           7,036.7      (9,404.8)           435.2
Retained earnings.....................         177.7           1,678.4           1,102.0      (1,149.4)         1,808.7
Accumulated other nonowner changes
   in equity..........................         (24.4)           (154.9)           (221.5)        245.9           (154.9)
                                          ----------      ------------     -------------    ----------       ----------
       Total shareholders' equity.....       2,957.6           1,524.0           8,058.2     (10,449.9)         2,089.9
                                          ----------      ------------     -------------    ----------       ----------
       Total liabilities and
       shareholders' equity...........    $  2,990.6      $    8,596.1     $     9,234.5    $(16,193.4)      $  4,627.8
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                                     - 13 -

<PAGE>

                          CONSOLIDATING BALANCE SHEETS
                                DECEMBER 31, 2002
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------    ----------
<S>                                       <C>             <C>              <C>             <C>              <C>
Cash and cash equivalents.............    $     33.9      $      244.3     $        23.8    $        -       $    302.0
Receivables...........................           0.2              65.3             641.2             -            706.7
Intercompany receivables..............         462.9                 -             252.0        (714.9)               -
Inventories...........................             -              19.9             560.6             -            580.5
Deferred income taxes and other
   current assets.....................           1.0              71.9              26.9             -             99.8
                                          ----------      ------------     -------------    ----------       ----------
      Total current assets............         498.0             401.4           1,504.5        (714.9)         1,689.0
                                          ----------      ------------     -------------    ----------       ----------
Property, plant and equipment, less
   accumulated depreciation...........             -              53.9             696.3             -            750.2
Goodwill..............................             -              41.4           1,954.8             -          1,996.2
Investment in subsidiaries............       2,412.5           5,401.6             (31.7)     (7,782.4)               -
Investment in parent..................             -           2,377.8                 -      (2,377.8)               -
Intercompany notes receivable.........           0.1              80.3           6,305.1      (6,385.5)               -
Deferred income taxes and other
   noncurrent assets..................             -             204.2              48.3             -            252.5
                                          ----------      ------------     -------------    ----------       ----------
      Total assets....................    $  2,910.6      $    8,560.6     $    10,477.3    $(17,260.6)      $  4,687.9
                                          ==========      ============     =============    ==========       ==========

Short-term debt.......................    $        -      $          -     $         4.1    $        -       $      4.1
Accounts payable......................          32.1              40.9             239.2             -            312.2
Accrued liabilities...................           0.7             200.7             288.0             -            489.4
Intercompany payables.................             -             714.9                 -        (714.9)               -
Current maturities of long-term debt..             -             153.2               0.6             -            153.8
                                          ----------      ------------     -------------    ----------       ----------
      Total current liabilities.......          32.8           1,109.7             531.9        (714.9)           959.5
                                          ----------      ------------     -------------    ----------       ----------
Long-term debt........................             -             933.4             347.3             -          1,280.7
Intercompany notes payable............             -           4,751.8           1,633.7      (6,385.5)           -
Other long-term liabilities...........             -             295.1             150.2             -            445.3
                                          ----------      ------------     -------------    ----------       ----------
      Total liabilities...............          32.8           7,090.0           2,663.1      (7,100.4)         2,685.5
                                          ----------      ------------     -------------    ----------       ----------
Class A common stock..................           0.9                 -                 -             -              0.9
Class B common stock..................           0.6                 -                 -          (0.6)               -
Subsidiary common stock...............             -                 -             141.0        (141.0)               -
Capital in excess of par value........       2,799.1               0.5           7,035.6      (9,412.5)           422.7
Retained earnings.....................         112.1           1,635.6             890.0        (893.5)         1,744.2
Accumulated other nonowner changes
   in equity..........................         (34.9)           (165.5)           (252.4)        287.4           (165.4)
                                          ----------      ------------     -------------    ----------       ----------
      Total shareholders' equity......       2,877.8           1,470.6           7,814.2     (10,160.2)         2,002.4
                                          ----------      ------------     -------------    ----------       ----------
      Total liabilities and
         shareholders' equity.........    $  2,910.6      $    8,560.6     $    10,477.3    $(17,260.6)      $  4,687.9
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                                     - 14 -

<PAGE>

                     CONSOLIDATING STATEMENTS OF CASH FLOWS
                         SIX MONTHS ENDED JUNE 30, 2003
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Net cash provided by (used in)
  operating activities................    $     (2.7)     $     (149.3)    $       270.1    $        -       $    118.1

Cash flows from investing activities:
  Capital expenditures................             -              (5.8)            (28.1)            -            (33.9)
  Loans to affiliates.................         (15.0)            (20.9)            (15.0)         50.9                -
  Repayments of loans from affiliates.             -               1.0                 -          (1.0)               -
  Dividends from subsidiaries.........         101.0               2.0                 -        (103.0)               -
  Other...............................             -              (1.0)              5.9           1.0              5.9
                                          ----------      ------------     -------------    ----------       ----------
     Net cash provided by (used in)
        investing activities..........          86.0             (24.7)            (37.2)        (52.1)           (28.0)

Cash flows from financing activities:
  Proceeds from issuances of debt.....             -                 -               4.3             -              4.3
  Repayments of debt..................             -            (166.7)             (0.5)            -           (167.2)
  Borrowings from affiliates..........             -              15.0              35.9         (50.9)               -
  Repayments of loans to affiliates...             -                 -              (1.0)          1.0                -
  Other intercompany financing
     activities.......................           1.3             143.2            (144.5)            -                -
  Dividends...........................         (64.5)                -                 -             -            (64.5)
  Dividends paid to parent............             -                 -            (103.0)        103.0                -
  Subsidiary purchase of parent shares             -              (5.4)                -             -             (5.4)
  Employee stock plan activity and
    other.............................           0.7               1.4               1.0          (1.0)             2.1
                                          ----------      ------------     -------------    ----------       ----------
    Net cash used in financing
        activities....................         (62.5)            (12.5)           (207.8)         52.1           (230.7)
  Effect of exchange rate changes on
     cash and cash equivalents........             -                 -               7.5             -              7.5
                                          ----------      ------------     -------------    ----------       ----------
  Increase (decrease) in cash and cash
     equivalents......................          20.8            (186.5)             32.6             -           (133.1)
  Cash and cash equivalents, beginning
     of period........................          33.9             244.3              23.8             -            302.0
                                          ----------      ------------     -------------    ----------       ----------
  Cash and cash equivalents, end of
     period...........................    $     54.7      $       57.8     $        56.4    $        -       $    168.9
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                                     - 15 -

<PAGE>

                     CONSOLIDATING STATEMENTS OF CASH FLOWS
                         SIX MONTHS ENDED JUNE 30, 2002
                                  (in millions)

<TABLE>
<CAPTION>
                                                             COOPER           OTHER        CONSOLIDATING
                                            COOPER            OHIO         SUBSIDIARIES     ADJUSTMENTS         TOTAL
                                          ----------      ------------     -------------   -------------     ----------
<S>                                       <C>             <C>              <C>             <C>               <C>
Net cash provided by (used in)
  operating activities................    $        -      $     (100.9)     $      287.9    $        -       $    187.0

Cash flows from investing activities:              -
  Capital expenditures................             -              (2.9)            (24.9)            -            (27.8)
  Loans to affiliates.................             -             (54.3)             (9.8)         64.1                -
  Dividends from subsidiaries.........             -               1.4                 -          (1.4)               -
  Other...............................             -              (0.2)              3.0           0.2              3.0
                                          ----------      ------------     -------------    ----------       ----------
  Net cash used in investing
     activities.......................             -             (56.0)            (31.7)         62.9            (24.8)

Cash flows from financing activities:
  Proceeds from issuances of debt.....             -             300.0              33.3             -            333.3
  Repayments of debt..................             -            (237.9)            (96.1)            -           (334.0)
  Borrowings from affiliates..........             -               9.8              54.3         (64.1)               -
  Other intercompany financing
     activities.......................             -             201.1            (201.1)            -                -
  Dividends...........................             -             (65.3)                -             -            (65.3)
  Dividends paid to parent............             -                 -              (1.4)          1.4                -
  Acquisition of treasury shares......             -             (37.9)                -             -            (37.9)
  Employee stock plan activity and
    other.............................             -               0.2               0.2          (0.2)             0.2
                                          ----------      ------------     -------------    ----------       ----------
     Net cash provided by (used in)
        financing activities..........             -             170.0            (210.8)        (62.9)          (103.7)
  Effect of exchange rate changes on
     cash and cash equivalents........             -                 -              (1.8)            -             (1.8)
                                          ----------      ------------     -------------    ----------       ----------
  Increase in cash and cash
     equivalents......................             -              13.1              43.6             -             56.7
  Cash and cash equivalents, beginning
     of period........................             -               2.8               8.7             -             11.5
                                          ----------      ------------     -------------    ----------       ----------
  Cash and cash equivalents, end of
     period...........................    $        -      $       15.9     $        52.3    $        -       $     68.2
                                          ==========      ============     =============    ==========       ==========
</TABLE>

                                     - 16 -

<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                              RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2003 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2002

         Net income for the second quarter of 2003 was $72.4 million on revenues
of $1,010.9 million compared with 2002 second quarter net income of $73.9
million on revenues of $1,001.2 million. Second quarter diluted earnings per
share were $.78 in 2003 and in 2002.

REVENUES:

         Revenues for the second quarter of 2003 were 1% greater than the second
quarter of 2002. Foreign currency translation increased reported revenues by
approximately 3% for the 2003 second quarter.

         Revenues in the Company's Electrical Products segment declined less
than 1% in the second quarter of 2003 compared with the prior year's second
quarter, reflecting continued weakness in several of Cooper's key markets. The
company saw strong retail channel sales during the second quarter, primarily due
to expanded market coverage by "big box" chains. Revenues in Cooper's lighting,
circuit protection, wiring devices and support systems businesses were
negatively impacted by continued soft commercial and industrial markets. The
Company's power transmission and distribution equipment sales fell when compared
to the 2002 second quarter due to deferral of spending by utilities for major
capital projects. European sales of lighting fixtures and security products
increased nearly 11%, reflecting currency translation gains. A weak U.S. Dollar
increased total Electrical Products revenues during the quarter by approximately
2%.

         Tools & Hardware segment revenues for the quarter increased 9% from the
second quarter of 2002. Hand tools sales were up modestly compared with the
prior year's second quarter reflecting increased retail demand. Power tools
revenues were higher due to international shipments of power tools and automated
assembly equipment systems. North American industrial, automotive and commercial
aircraft markets remained weak during the quarter. Currency translation
increased second quarter 2003 Tools & Hardware revenues by approximately 5%.

COSTS AND EXPENSES:

         Cost of sales, as a percentage of revenues, was 70.9% for the second
quarter of 2003 compared to 71.6% for the comparable 2002 quarter. The decrease
in the cost of sales percentage was due primarily to the Company's continued
cost reduction efforts.

         Electrical Products segment cost of sales, as a percentage of revenues,
was 70.0% for the second quarter of 2003 compared to 71.1% for the second
quarter of 2002. The decrease in the cost of sales percentage was primarily a
result of manufacturing cost reduction initiatives. Tools & Hardware segment
cost of sales, as a percentage of revenues, was 76.0% for the second quarter of
2003 compared to 76.8% for the second quarter of 2002. The decline in cost of
sales percentage reflects the impact of cost reduction actions to more closely
align the cost structure with prevailing market conditions partially offset by a
higher proportion of lower margin assembly equipment sales.

         Selling and administrative expenses, as a percentage of revenues, for
the second quarter of 2003 were 19.3% compared to 17.8% for the second quarter
of 2002. The increase in the selling and administrative expense percentage was
primarily due to increased medical costs, pension expenses, insurance premiums
and stock-based compensation.

         Electrical Products segment selling and administrative expenses, as a
percentage of revenues, for the second quarter of 2003 were 17.0% compared to
16.1% for the second quarter of 2002. The increase in

                                     - 17 -

<PAGE>

selling and administrative expenses percentage is primarily due to increases in
insurance and pension expenses and investments in sales and marketing
initiatives, along with decreased leverage due to slightly lower revenues. Tools
& Hardware segment selling and administrative expenses, as a percentage of
revenues, for the second quarter of 2003 were 19.9% compared to 20.7% for the
second quarter of 2002. The decrease in the selling and administrative expenses
percentage is primarily due to higher revenues more than offsetting an increase
in employee benefit-related expenses.

         Interest expense, net for the second quarter of 2003 increased $2.1
million from the 2002 second quarter as a result of higher average interest
rates more than offsetting lower average debt balances. Average debt balances
were $1.34 billion and $1.40 billion and average interest rates were 5.9% and
5.0% for the second quarter of 2003 and 2002, respectively. The increase in
average interest rates primarily resulted from the Company's replacement in 2002
of substantially all variable-rate commercial paper borrowings with long-term
fixed-rate debt.

RESTRUCTURING:

         In 2001, Cooper accrued $35 million reflecting the contractual amounts
due to financial advisors associated with Cooper's strategic alternatives
review. Cooper paid $5 million to the advisors in the 2001 fourth quarter and
$15.7 million during 2002, leaving a balance of $14.3 million payable upon the
occurrence of certain events. During the second quarter of 2003, the terms of
the agreements with the financial advisors expired with the contingent events
that required payment not occurring. Accordingly, the accrual was reversed and
reflected as a $14.3 million negative restructuring charge ($8.6 million, net of
taxes) on the consolidated income statement. See "Restructuring" below for
additional information.

OPERATING EARNINGS:

         Electrical Products segment second quarter 2003 operating earnings
increased 1.2% to $109.2 million from $107.9 million for the same quarter of
last year. The increase from prior year was primarily due to the improvement in
margins as a result of actions to reduce manufacturing costs and increase
productivity, partially offset by unfavorable sales mix and increased insurance
and employee benefit-related costs.

         Tools & Hardware segment operating earnings were $7.0 million for the
2003 second quarter, compared to $4.0 million in the second quarter of 2002. The
increased operating earnings primarily reflect higher revenues and the impact of
the Company's cost control and manufacturing rationalization efforts.

         General Corporate expense increased $11.8 million to $16.9 million
during the second quarter of 2003 compared to $5.1 million during the second
quarter of 2002. During the second quarter of 2002, General Corporate expense
was reduced by income of $3.0 million under an agreement with Belden Inc.
("Belden"). In 1993, Cooper completed an initial public offering of the stock of
Belden, formerly a division of Cooper. Under the agreement, Belden and Cooper
made an election that increased the tax basis of certain Belden assets. Belden
is required to pay Cooper ninety percent of the amount by which Belden has
actually reduced tax payments that would otherwise have been payable if the
increase in the tax basis of assets had not occurred, as realized on a quarterly
basis over substantially fifteen years. If Belden does not have sufficient
future taxable income, it is possible that Belden will not be able to utilize
the tax deductions arising from the increases in the tax basis of the assets
resulting in a tax loss carryforward. Belden is not obligated to pay Cooper
until a tax benefit is realized. Belden can carry any loss forward twenty years
to offset future taxable income. The Company concluded that, for the second
quarter of 2003, no income would be recognized under the agreement. The
remaining increase in General Corporate expense resulted primarily from
increased insurance costs, pension expense, employee benefit-related expenses
and stock-based compensation expense.

                                     - 18 -

<PAGE>

INCOME TAXES:

         The effective tax rate was 23.1% for the three months ended June 30,
2003 and 17.3% for the three months ended June 30, 2002. Excluding the impact of
the reversal of the restructuring accrual discussed above, the effective tax
rate for the three months ended June 30, 2003 was 20%. The effective tax rate
for the second quarter of 2002 reflected a year-to-date adjustment as a result
of the reorganization discussed in Note 1 of the Notes to the Consolidated
Financial Statements. Absent this adjustment, the effective tax rate would have
been 23.7% for the three months ended June 30, 2002. See Note 8 of the Notes to
the Consolidated Financial Statements for additional information regarding the
effective tax rate.

SIX MONTHS ENDED JUNE 30, 2003 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2002

         Net income for the first six months of 2003 was $129.0 million on
revenues of $1,968.7 million compared with 2002 first six months net income of
$122.7 million on revenues of $1,976.2 million. Diluted earnings per share for
the 2003 six-month period were $1.39 compared to $1.30 in 2002.

REVENUES:

         Revenues for the first six months of 2003 were slightly below the first
six months of 2002. Foreign currency translation increased reported revenues
during the first six months of 2003 by approximately 2%.

         Year-to-date 2003 Electrical Products segment revenues were 1% less
than last year, reflecting continued weakness in several of Cooper's key
markets. Revenues from commercial and industrial markets were down during the
six months, however retail channel sales were up, reflecting expanded market
coverage by the major retailers. Revenues in Cooper's North American lighting,
wiring devices and support systems businesses were impacted by continued soft
commercial construction and industrial markets. The Company's power transmission
and distribution equipment sales fell when compared to 2002 reflecting a
reluctance by utilities to initiate discretionary capital spending. Modest
improvements in selected industrial markets resulted in small revenue gains in
the Company's hazardous duty and circuit protection businesses. A weak U.S.
Dollar increased total Electrical Products revenues during the first six months
of 2003 by approximately 2%.

         Tools & Hardware segment revenues for the first six months of 2003 were
4% above the first six months of 2002. Hand tools sales were up modestly
compared with the prior year due to higher demand in the retail market. Power
tools experienced growth in European-based industrial power tools and assembly
equipment markets. A weak U.S. Dollar increased total Tools & Hardware revenues
during the first six months of 2003 by approximately 4%.

COSTS AND EXPENSES:

         Cost of sales, as a percentage of revenues, was 70.7% for the first six
months of 2003 compared to 71.8% for the comparable 2002 period. The decrease in
the cost of sales percentage was due primarily to the Company's continued cost
reduction efforts.

         Electrical Products segment cost of sales, as a percentage of revenues,
was 70.0% for the first six months of 2003 compared to 71.4% for the first six
months of 2002. The decrease in the cost of sales percentage was primarily a
result of the continued focus on adjusting our cost structure and productivity
improvements. Tools & Hardware segment cost of sales, as a percentage of
revenues, was 74.6% for the first six months of 2003 compared to 75.7% for the
first six months of 2002. The decline in cost of sales percentage reflects the
impact of cost reduction initiatives implemented to more closely align the cost
structure with current demand levels, partially offset by unfavorable sales mix
and higher insurance, pension and employee benefit expenses.

         Selling and administrative expenses, as a percentage of revenues, for
the first six months of 2003 were 19.7% compared to 18.4% for the first six
months of 2002. The increase in the selling and

                                     - 19 -

<PAGE>

administrative expenses percentage reflects the impact of increases in pension,
medical, insurance and stock-based compensation expenses.

         Electrical Products segment selling and administrative expenses, as a
percentage of revenues, for the first six months of 2003 were 17.3% compared to
16.5% for the first six months of 2002. The increase in the selling and
administrative expenses percentage is attributable to a 1% decline in revenues,
higher employee benefits-related costs and increased sales and marketing costs
resulting from initiatives to expand market share. Tools & Hardware segment
selling and administrative expenses, as a percentage of revenues, for the first
six months of 2003 were 21.2% compared to 21.3% for the first six months of
2002. The decrease in the selling and administrative expenses percentage
reflects increased leveraging of costs offset by a modest increase in expenses,
particularly related to employee benefits.

         Interest expense, net for the first six months of 2003 increased $5.3
million from the 2002 first six months as a result of higher average interest
rates on lower average debt balances. Average debt balances were $1.36 billion
and $1.42 billion and average interest rates were 6.0% and 4.9% for the first
six months of 2003 and 2002, respectively. The increase in average interest
rates primarily resulted from the Company's replacement in 2002 of substantially
all variable rate commercial paper borrowings with long-term fixed-rate debt.

OPERATING EARNINGS:

         Year-to-date 2003 operating earnings for the Electrical Products
segment were $209.5 million compared to $199.7 million for the same period of
last year. The increase from prior year was primarily due to the improvement in
margins as a result of cost reduction and productivity actions targeting
manufacturing costs, partially offset by increased insurance, pension and
employee benefit expenses and investments in sales and marketing initiatives.

         Tools & Hardware segment operating earnings were $13.5 million for the
first six months of 2003, compared to $9.3 million for the same period of 2002.
The increased operating earnings largely reflect the increase in revenues and
the impact of the Company's cost control and manufacturing rationalization
efforts, partially offset by unfavorable product mix and higher insurance,
pension and employee benefit expenses.

         Year-to-date General Corporate expense increased $19.1 million to $32.9
million during the first six months of 2003 compared to $13.8 million during the
first six months of 2002. During the first six months of 2002, General Corporate
expense was reduced by income of $6.0 million under the agreement with Belden,
discussed previously. The remaining increase in General Corporate expense
resulted primarily from increased insurance, employee benefits and stock-based
compensation expenses.

INCOME TAXES:

         Taxes on income decreased primarily as a result of the reorganization
as discussed in Note 1 of the Notes to the Consolidated Financial Statements.
The effective tax rate was 21.7% for the six months ended June 30, 2003 and
23.7% for the six months ended June 30, 2002. Excluding the impact of the
reversal of the restructuring accrual, the effective tax rate was 20% for the
six months ended June 30, 2003. See Note 8 of the Notes to the Consolidated
Financial Statements for additional information regarding the effective tax
rate.

RESTRUCTURING:

         During the fourth quarter of 2002, Cooper committed to (1) the closure
of ten manufacturing facilities, (2) further employment reductions to
appropriately size Cooper's workforce to market conditions, and (3) the
write-off of assets related to production rationalization activities. These
actions were taken as a part of Cooper management's ongoing assessment of
required production capacity in consideration of current demand levels. In
connection with these commitments, certain production capacity and related
assets are being sold, outsourced, discontinued or moved to a lower cost
environment. Cooper recorded a provision for

                                     - 20 -

<PAGE>

these announced actions of $39.1 million ($15.0 million of which was non-cash).
Of this amount, $24.0 million ($11.0 million of which was non-cash) was
associated with the Electrical Products segment, $12.7 million ($3.4 million of
which was non-cash) was associated with the Tools & Hardware segment and the
remainder was related to General Corporate. Of the $24.1 million of charges
resulting in cash expenditures, $10.9 million remained to be expended at June
30, 2003.

         The following table reflects activity related to the fourth quarter
2002 restructuring charge.

<TABLE>
<CAPTION>
                                                                  FACILITIES
                                      NUMBER OF     ACCRUED       CLOSURE AND
                                      EMPLOYEES    SEVERANCE    RATIONALIZATION
                                      ----------   ----------   ---------------
                                                        ($ in millions)
<S>                                   <C>          <C>          <C>
2002 Restructuring charge .........        1,206   $     18.3     $     20.8
Asset write-offs ..................            -            -          (15.0)
Employees terminated ..............         (184)           -              -
Cash expenditures .................            -         (2.1)             -
                                      ----------   ----------     ----------
Balance at December 31, 2002 ......        1,022         16.2            5.8
Employees terminated ..............         (675)           -              -
Cash expenditures .................            -        (10.6)          (0.5)
                                      ----------   ----------     ----------
Balance at June 30, 2003 ..........          347   $      5.6     $      5.3
                                      ==========   ==========     ==========
</TABLE>

         A total of 435 salaried and 771 hourly positions are scheduled to be
eliminated as a result of the planned closure and rationalization actions. Of
those planned position eliminations, approximately 600 positions will be
replaced ultimately as a result of Cooper's ongoing efforts to relocate
production capacity to lower cost locations. Substantially all of the closure
and rationalization activities will be initiated by the end of 2003 and are
scheduled to be substantially completed by the end of 2004. The majority of the
expenditures related to the 2002 restructuring charge are expected to be
incurred during 2003 and will be funded from cash provided by operating
activities.

         As of June 30, 2003, Cooper anticipates incurring approximately $8.6
million related to facility exit costs and disruption of operations under the
2002 facility closure and production rationalization plan that could not be
accrued. These costs are principally related to production inefficiencies and
equipment and personnel relocation and will be expensed as incurred. Cooper
estimates that the earnings impact in 2003 from these actions will be
approximately $5 million in pretax savings, the majority of which will benefit
the second half of the year. The majority of the cost savings will be realized
beginning in 2004 as the facility closures and rationalizations become
finalized. It is expected that the pretax savings will exceed $35 million and
will largely be reflected as lower cost of sales.

         During the fourth quarter of 2001, Cooper recorded a restructuring
charge that resulted in certain future cash expenditures. Cooper recorded a $7.1
million accrual for severance and other costs associated with the consolidation
or closure of certain Electrical Products segment facilities as a result of
management's review and modification of their assessment of required production
and distribution facilities and capacity, in consideration of depressed demand
levels. A total of 77 salaried and 196 hourly positions were scheduled to be
eliminated in 2002 as a result of these planned consolidation actions. Also
during the fourth quarter of 2001, Cooper recorded a provision of $36.0 million
for financial advisory, legal and other external costs associated with the
Company's review of strategic alternatives. These charges resulted in
restructuring accruals of $41.4 million (non-cash charges were $1.7 million).

                                     - 21 -

<PAGE>

         The following table reflects activity related to the fourth quarter
2001 severance, facility consolidation and closure and financial advisors and
other cost accruals.

<TABLE>
<CAPTION>
                                                                           FACILITIES      FINANCIAL
                                              NUMBER OF       ACCRUED     CONSOLIDATION  ADVISORS AND
                                              EMPLOYEES      SEVERANCE     AND CLOSURE       OTHER
                                              ---------      ----------    -------------  ------------
                                                                          ($ in millions)
<S>                                          <C>            <C>           <C>            <C>
Facility consolidation and closure .....            291     $      3.2     $      2.2     $        -
Provision for advisors and other .......              -              -              -           36.0
Employees terminated ...................            (18)             -              -              -
Cash expenditures ......................              -           (0.2)          (0.1)          (6.0)
                                             ----------     ----------     ----------     ----------
Balance at December 31, 2001 ...........            273            3.0            2.1           30.0
Employees terminated ...................           (273)             -              -              -
Cash expenditures ......................              -           (3.0)          (2.1)         (15.7)
                                             ----------     ----------     ----------     ----------
Balance at December 31, 2002 ...........              -              -              -           14.3
Reversal of accrual ....................              -              -              -          (14.3)
                                             ----------     ----------     ----------     ----------
Balance at June 30, 2003 ...............              -     $        -     $        -     $        -
                                             ==========     ==========     ==========     ==========
</TABLE>

         Cash expenditures were funded with cash provided by operating
activities.

         In 2001, Cooper accrued $35 million reflecting the contractual amounts
due to financial advisors associated with Cooper's strategic alternatives
review. Cooper paid $5 million to the advisors in the 2001 fourth quarter and
$15.7 million during 2002, leaving a balance of $14.3 million payable upon the
occurrence of certain events. During the second quarter of 2003, the terms of
the agreements with the financial advisors expired with the contingent events
that required payment not occurring. Accordingly, the accrual was reversed and
reflected as a $14.3 million negative restructuring charge ($8.6 million, net of
taxes) on the consolidated income statement. See Note 11 of the Notes to the
Consolidated Financial Statements for additional information on restructuring.

                         LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY:

         Cooper's operating working capital (defined as receivables and
inventories less accounts payable) increased $88 million during the first six
months of 2003. The increase in operating working capital for the first six
months of 2003 is a result of higher receivables, reflecting the level of sales,
and an increase in inventories. The increase in inventories resulted from
planned inventory builds in preparation for the consolidation or closure of
certain facilities and increased assembly equipment sales and backlog in the
Company's power tools operations. The build in inventories was partially offset
by an increase in the allowance for excess and obsolete inventories reflecting
the Company's assessment of ultimate disposition in consideration of continued
depressed market conditions. Operating working capital turnover (defined as
annualized revenues divided by average operating working capital) for the first
six months of 2003 of 3.9 turns increased from 3.8 turns in the same period of
2002 reflecting the impact of reductions in average trade receivables and
inventory balances offset, in part, by a decrease in average accounts payable.

         Cash provided by operating activities was $118 million in the first
half of 2003. The decline in net cash provided by operating activities compared
to the first half of 2002 was driven by the receivables and inventories
increases discussed above and prepayments of employee benefits partially offset
by lower income taxes. Cash provided by operating activities plus $133 million
of cash and cash equivalents were used to fund capital expenditures of $34
million, dividends of $65 million, share purchases of $5 million and net debt
repayments of $163 million during the first half of 2003. Cash provided by
operating activities of $187 million in the first half of 2002 was used to fund
capital expenditures of $28 million, dividends of $65 million and share
repurchases of $38 million.

                                     - 22 -

<PAGE>

         Cooper is continuing to focus on initiatives to maximize cash flows.
Cooper currently anticipates a continuation of its long-term ability to annually
generate in excess of $200 million in cash flow available for acquisitions, debt
repayment and common stock repurchases.

         In connection with acquisitions accounted for as purchases, Cooper
records, to the extent appropriate, accruals for the costs of closing duplicate
facilities, severing redundant personnel and integrating the acquired businesses
into existing Cooper operations. Cash flows from operating activities are
reduced by the amounts expended against the various accruals established in
connection with each acquisition. Spending against these accruals was $5.5
million and $3.7 million during the six months ended June 30, 2003 and 2002,
respectively.

CAPITAL RESOURCES:

         Cooper has targeted a 35% to 45% debt-to-total capitalization ratio and
intends to utilize cash flows to maintain a debt-to-total capitalization ratio
within this range. Excess cash flows are utilized to fund acquisitions or to
purchase shares of Cooper common stock. Cooper's debt-to-total capitalization
ratio was 38.6% at June 30, 2003, 41.8% at December 31, 2002 and 39.2% at June
30, 2002.

         Cooper typically relies on commercial paper markets as its principal
source of short-term financing. At June 30, 2003 and December 31, 2002, Cooper
had no commercial paper outstanding and cash and cash equivalents of $168.9
million and $302.0 million, respectively.

         Cooper's practice is to back up its outstanding commercial paper with a
combination of cash and committed bank credit facilities. As of June 30, 2003,
the balance of these committed bank credit facilities was $450 million, which
mature on November 17, 2004. Cooper did not renew its $375 million committed
bank credit facility which matured April 30, 2003. Outstanding commercial paper
balances, to the extent not backed up by cash, reduce the amount of available
borrowings under the committed bank credit facilities. The credit facility
agreements do not contain a material adverse change clause. The principal
financial covenants in the agreements limit Cooper's debt-to-total
capitalization ratio to 60% and require Cooper to maintain a minimum earnings
before interest expense, income taxes, depreciation and amortization to interest
ratio of 3 to 1. Cooper is in compliance with all covenants set forth in the
credit facility agreements.

         Cooper's access to the commercial paper market could be adversely
affected by a change in the credit ratings assigned to its commercial paper.
Should Cooper's access to the commercial paper market be adversely affected due
to a change in its credit ratings, Cooper would rely on a combination of
available cash and its committed bank credit facilities to provide short-term
funding. The committed bank credit facilities do not contain any provision which
makes their availability to Cooper dependent on Cooper's credit ratings.

         At June 30, 2003, $225 million of Cooper Ohio's existing shelf
registration to issue up to $500 million of debt securities remained available.

         During August 2003, the Company entered into an interest-rate swap to
effectively convert $100 million of 5.25% long-term fixed rate debt to
variable rate debt at the six month LIBOR rate plus 1.90%. The swap matures
concurrent with the long-term debt and has been designated as a fair-value
hedge. As of the date of this filing, there have been no other material changes
to Cooper's contractual obligations or other commitments as described in its
Annual Report on Form 10-K for the year ended December 31, 2002.

         Subject to review and approval by the Joint Committee on Taxation of
Congress, the Company has entered into a settlement with the Internal Revenue
Service covering taxable years 1994-1996 which also includes final disposition
of certain refund claims relating to tax years prior to 1994. As a result of
this settlement, the Company expects to receive a refund of approximately $60
million including interest. As noted, issuance of the refund requires review and
approval by the Joint Committee on Taxation. Consequently, the Company cannot be
certain of the timing or the ultimate amount of the total refund payment. As of
the date of this filing, the Company anticipates payment to be received as early
as the fourth quarter of 2003.

                                     - 23 -

<PAGE>

                                     BACKLOG

         Sales backlog represents the dollar amount of all firm open orders for
which all terms and conditions pertaining to the sale have been approved such
that a future sale is reasonably expected. Sales backlog by segment was as
follows:

<TABLE>
<CAPTION>
                                                                                             JUNE 30,
                                                                               -----------------------------------
                                                                                    2003                  2002
                                                                               -------------         -------------
                                                                                          (in millions)
<S>                                                                            <C>                   <C>
Electrical Products.........................................................   $       239.1         $       250.8
Tools & Hardware............................................................           104.3                  93.2
                                                                               -------------         -------------
                                                                               $       343.4         $       344.0
                                                                               =============         =============
</TABLE>

                      RECENTLY ISSUED ACCOUNTING STANDARDS

         See Note 1 of the Notes to the Consolidated Financial Statements.

         PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

         This Form 10-Q includes certain forward-looking statements. The
forward-looking statements reflect Cooper's expectations, objectives and goals
with respect to future events and financial performance, and are based on
assumptions and estimates which Cooper believes are reasonable. Forward-looking
statements include, but are not limited to, statements regarding the facilities
closure and production rationalization plan and cost-reduction programs, pending
tax refunds, resolution of the potential liability exposure resulting from
Federal-Mogul Corporation's ("Federal-Mogul") bankruptcy filing, and any
statements regarding future revenues, cost and expenses, earnings, earnings per
share, margins, cash flows, debt levels and capital expenditures. Cooper wishes
to caution readers not to put undue reliance on these statements and that actual
results could differ materially from anticipated results. Important factors
which may affect the actual results include, but are not limited to, the
resolution of Federal-Mogul's bankruptcy proceedings, political developments,
market and economic conditions, changes in raw material and energy costs,
industry competition, the net effects of Cooper's cost-reduction programs, the
timing and net effects of facility closures and the magnitude of any disruptions
from such closures, changes in financial markets including foreign currency rate
fluctuations and changing legislation and regulations including changes in tax
law, tax treaties or tax regulations. The forward-looking statements contained
in this report are intended to qualify for the safe harbor provisions of Section
21E of the Securities Exchange Act of 1934, as amended.

ITEM 4.           CONTROLS AND PROCEDURES

         As of the end of the period covered by this quarterly report, Cooper's
management, under the supervision and with the participation of the Chief
Executive Officer and Chief Financial Officer, performed an evaluation of the
effectiveness of the design and operation of Cooper's disclosure controls and
procedures. Based on that evaluation, Cooper's management, including the Chief
Executive Officer and Chief Financial Officer, concluded that the disclosure
controls and procedures are effective. There have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of this evaluation.

                                     - 24 -

<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         Cooper is subject to various suits, legal proceedings and claims that
arise in the normal course of business. While it is not feasible to predict the
outcome of these matters with certainty, management is of the opinion that their
ultimate disposition should not have a material adverse effect on Cooper's
financial statements.

         In October 1998, Cooper sold its Automotive Products business to
Federal-Mogul Corporation ("Federal-Mogul"). These discontinued businesses
(including the Abex product line obtained from Pneumo-Abex Corporation
("Pneumo") in 1994) were operated through subsidiary companies, and the stock of
those subsidiaries was sold to Federal-Mogul pursuant to a Purchase and Sale
Agreement dated August 17, 1998 ("1998 Agreement"). In conjunction with the
sale, Federal-Mogul indemnified Cooper for certain liabilities of these
subsidiary companies, including liabilities related to the Abex product line and
any potential liability that Cooper may have to Pneumo pursuant to a 1994 Mutual
Guaranty Agreement between Cooper and Pneumo. On October 1, 2001, Federal-Mogul
and several of its affiliates filed a Chapter 11 bankruptcy petition and
indicated that Federal-Mogul may not honor the indemnification obligations to
Cooper. As of the date of this filing, Federal-Mogul had not yet made a decision
whether to reject the 1998 Agreement, which includes the indemnification to
Cooper. If Federal-Mogul rejects the 1998 Agreement, Cooper will be relieved of
its future obligations under the 1998 Agreement, including specific indemnities
relating to payment of taxes and certain obligations regarding insurance for its
former Automotive Products businesses. To the extent Cooper is obligated to
Pneumo for any asbestos-related claims arising from the Abex product line ("Abex
Claims"), Cooper has rights, confirmed by Pneumo, to significant insurance for
such claims. Based on information provided by representatives of Federal-Mogul
and recent claims experience, from August 28, 1998 through June 30, 2003, a
total of 108,739 Abex Claims were filed, of which 50,689 claims have been
resolved leaving 58,050 Abex Claims pending at June 30, 2003, that are the
responsibility of Federal-Mogul. During the three months ended June 30, 2003,
5,438 claims were filed and 14,748 claims were resolved. Since August 28, 1998,
the average indemnity payment for resolved Abex Claims was $1,166 before
insurance. A total of $44.0 million was spent on defense costs for the period
August 28, 1998 through June 30, 2003. Historically, existing insurance coverage
has provided 50% to 80% of the total defense and indemnity payments for Abex
Claims.

         With the assistance of independent advisors, Bates White & Ballentine,
LLC, in the fourth quarter of 2001 Cooper completed a thorough analysis of its
potential exposure for asbestos liabilities in the event Federal-Mogul rejects
the 1998 Agreement. The analysis included a review of the twenty-year history of
Abex Claims; the average indemnity payments for resolved claims; the
jurisdictions in which claims had been filed; Bates White & Ballentine, LLC data
on the incidence of asbestos exposure and diseases in various industries;
existing insurance coverage including the insurance recovered by Pneumo and
Federal-Mogul for pre-bankruptcy claims and the contractual indemnities.
Assumptions were made regarding future claim filings and indemnity payments,
and, based on the advisor's data, the expected population of persons exposed to
asbestos in particular industries. All of this data was used to determine a
reasonable expectation of future claims, indemnity payments and insurance
coverage. At this time, the manner in which this issue ultimately will be
resolved is not known. Cooper is preserving its rights as a creditor for breach
of Federal-Mogul's indemnification to Cooper and its rights against all
Federal-Mogul subsidiaries. Cooper intends to take all actions to seek a
resolution of the indemnification issues and future handling of the Abex-related
claims within the Federal-Mogul bankruptcy proceedings. At June 30, 2003, the
accrual for potential liabilities related to the Federal-Mogul bankruptcy was
$76.4 million.

                                     - 25 -

<PAGE>

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

         The annual meeting of shareholders was held on April 29, 2003 in
Houston, Texas. Four proposals, as described in Cooper's Proxy statement dated
March 14, 2003, were voted upon at the meeting. Following is a brief description
of the matters voted upon and the results of voting.

         1.       Proposal for the election of four directors for terms expiring
in 2006:

<TABLE>
<CAPTION>
                     Ivor J. Evans   Clifford J. Grum   Ralph E. Jackson, Jr.  James R. Wilson
                     -------------   ----------------   ---------------------  ---------------
<S>                  <C>             <C>                <C>                    <C>
Votes For:            82,260,097        82,205,967          74,810,551           74,716,792
Votes Withheld:        2,367,111         2,421,241           9,816,657            9,910,416
</TABLE>

         2.       Proposal to appoint Ernst & Young LLP as independent auditors
                  for 2003:

                  Votes For:                82,219,640
                  Votes Against:             1,708,816
                  Abstain:                     698,752
                  Non-Vote:                          -

         3.       Proposal relating to social and environmental issues
                  concerning sustainability:

                  Votes For:                29,050,738
                  Votes Against:            36,546,041
                  Abstain:                  10,004,539
                  Non-Vote:                  9,025,890

         4.       Proposal to change Cooper's jurisdiction of incorporation:

                  Votes For:                 8,470,327
                  Votes Against:            65,317,781
                  Abstain:                   1,813,210
                  Non-Vote:                  9,025,890

Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits

         10.1     Cooper Industries, Ltd. Amended and Restated Directors'
                  Retainer Fee Stock Plan (as Amended and Restated April 1,
                  2003).

         10.2     Amended and Restated Cooper Industries, Ltd. Directors' Stock
                  Plan (as Amended and Restated April 29, 2003).

         12.      Computation of Ratios of Earnings to Fixed Charges for the
                  Calendar Years 2002 through 1998 and the Six Months Ended June
                  30, 2003 and 2002.

         23.      Consent of Bates White & Ballentine, LLC.

         31.1     Certifications pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.

         31.2     Certifications pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 2002.

         32.1     Certifications pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

                                     - 26 -

<PAGE>

         32.2     Certifications pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

(b)      Reports on Form 8-K

         Cooper furnished the following reports on Form 8-K during the second
         quarter of 2003:

         -        Form 8-K dated April 1, 2003, which furnished a copy of a
                  press release announcing a board of directors change.

         -        Form 8-K dated April 24, 2003, which furnished a copy of a
                  press release containing Cooper's financial results for the
                  quarter ended March 31, 2003 and "Sales Trends" information to
                  be posted on Cooper's website.

         -        Form 8-K dated April 29, 2003, which furnished a copy of a
                  press release announcing the election of new directors and
                  annual meeting results.

         -        Form 8-K dated May 23, 2003, which furnished "Sales Trends"
                  information to be posted on Cooper's website.

         -        Form 8-K dated June 19, 2003, which furnished "Sales Trends"
                  information to be posted on Cooper's website.

         -        Form 8-K dated June 19, 2003, which furnished a copy of a
                  press release announcing key organization changes.

                                     - 27 -

<PAGE>

                                   Signatures

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

                                                     Cooper Industries, Ltd.
                                           -------------------------------------
                                                          (Registrant)

Date: August 13, 2003                      /s/ Terry A. Klebe
                                           -------------------------------------
                                           Terry A. Klebe
                                           Senior Vice President and
                                             Chief Financial Officer

Date: August 13, 2003                      /s/ Jeffrey B. Levos
                                           -------------------------------------
                                           Jeffrey B. Levos
                                           Vice President and Controller and
                                             Chief Accounting Officer

                                     - 28 -

<PAGE>

                                  Exhibit Index

Exhibit No.

10.1     Cooper Industries, Ltd. Amended and Restated Directors' Retainer Fee
         Stock Plan (as Amended and Restated April 1, 2003).

10.2     Amended and Restated Cooper Industries, Ltd. Directors' Stock Plan (as
         Amended and Restated April 29, 2003).

12.      Computation of Ratios of Earnings to Fixed Charges for the Calendar
         Years 2002 through 1998 and the Six Months Ended June 30, 2003 and
         2002.

23.      Consent of Bates White & Ballentine, LLC.

31.1     Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002.

31.2     Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
         2002.

32.1     Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002.

32.2     Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002.

                                     - 29 -