##### Table of Contents



10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-31330
 Cooper Industries, Ltd.
 
 Bermuda
    
    98-0355628(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)600 Travis, Suite 5600
    
    Houston, Texas 77002(Address of principal executive offices)
    
    (Zip Code)
 
 
 þ o
  þ o o
 o þ




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TABLE OF CONTENTS  PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity SecuritiesItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 6. ExhibitsSignaturesExhibit IndexComputation of Ratio of Earnings to Fixed ChargesConsent of Bates White, LLCCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906    Table of Contents  
 PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 COOPER INDUSTRIES, LTD.
CONSOLIDATED INCOME STATEMENTS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions, where applicable)Revenues
    
    $
    1,463.7
    
    
    $
    1,287.8
    
    
    $
    2,857.7
    
    
    $
    2,528.7Cost of sales
    
    
    981.3
    
    
    
    870.3
    
    
    
    1,926.2
    
    
    
    1,717.1Selling and administrative expenses
    
    
    269.1
    
    
    
    244.3
    
    
    
    524.5
    
    
    
    481.8Operating earnings
    
    
    213.3
    
    
    
    173.2
    
    
    
    407.0
    
    
    
    329.8Interest expense, net
    
    
    12.9
    
    
    
    12.4
    
    
    
    25.8
    
    
    
    24.5Income from continuing operations before
income taxes
    
    
    200.4
    
    
    
    160.8
    
    
    
    381.2
    
    
    
    305.3Income taxes (benefits)
    
    
    (8.8
    )
    
    
    41.0
    
    
    
    40.1
    
    
    
    77.8Income from continuing operations
    
    
    209.2
    
    
    
    119.8
    
    
    
    341.1
    
    
    
    227.5Charge related to discontinued operations,
net of income taxes
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    20.3Net income
    
    $
    209.2
    
    
    $
    99.5
    
    
    $
    341.1
    
    
    $
    207.2Income per common share:Basic:Income from continuing operations
    
    $
    1.14
    
    
    $
    .65
    
    
    $
    1.86
    
    
    $
    1.24Charge from discontinued operations
    
    
    
    
    
    
    .11
    
    
    
    
    
    
    
    .11Net income
    
    $
    1.14
    
    
    $
    .54
    
    
    $
    1.86
    
    
    $
    1.13Diluted:Income from continuing operations
    
    $
    1.12
    
    
    $
    .64
    
    
    $
    1.83
    
    
    $
    1.21Charge from discontinued operations
    
    
    
    
    
    
    .11
    
    
    
    
    
    
    
    .11Net income
    
    $
    1.12
    
    
    $
    .53
    
    
    $
    1.83
    
    
    $
    1.10Cash dividends per common share
    
    $
    .21
    
    
    $
    .185
    
    
    $
    .42
    
    
    $
    .37
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COOPER INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006(in millions)ASSETSCash and cash equivalents
    
    $
    640.0
    
    
    $
    423.5Receivables
    
    
    1,062.8
    
    
    
    896.0Inventories
    
    
    665.9
    
    
    
    607.6Deferred income taxes and other current assets
    
    
    236.3
    
    
    
    266.6Total current assets
    
    
    2,605.0
    
    
    
    2,193.7Property, plant and equipment, less accumulated depreciation
    
    
    680.6
    
    
    
    665.4Goodwill
    
    
    2,414.1
    
    
    
    2,336.9Other noncurrent assets
    
    
    235.6
    
    
    
    178.8Total assets
    
    $
    5,935.3
    
    
    $
    5,374.8LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt
    
    $
    8.7
    
    
    $
    5.0Accounts payable
    
    
    482.3
    
    
    
    471.7Accrued liabilities
    
    
    494.8
    
    
    
    522.3Current discontinued operations liability
    
    
    213.0
    
    
    
    199.6Current maturities of long-term debt
    
    
    400.1
    
    
    
    300.7Total current liabilities
    
    
    1,598.9
    
    
    
    1,499.3Long-term debt
    
    
    907.0
    
    
    
    702.8Postretirement benefits other than pensions
    
    
    81.7
    
    
    
    83.2Long-term discontinued operations liability
    
    
    330.0
    
    
    
    330.0Other long-term liabilities
    
    
    262.8
    
    
    
    284.2Total liabilities
    
    
    3,180.4
    
    
    
    2,899.5Common stock, $.01 par value
    
    
    1.8
    
    
    
    0.9Capital in excess of par value
    
    
    299.2
    
    
    
    278.4Retained earnings
    
    
    2,560.3
    
    
    
    2,324.4Accumulated other nonowner changes in equity
    
    
    (106.4
    )
    
    
    (128.4
    )Total shareholders equity
    
    
    2,754.9
    
    
    
    2,475.3Total liabilities and shareholders equity
    
    $
    5,935.3
    
    
    $
    5,374.8
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COOPER INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30,2007
    
    
    2006(in millions)Cash flows from operating activities:Net income
    
    $
    341.1
    
    
    $
    207.2Plus: charge related to discontinued operations
    
    
    
    
    
    
    20.3Income from continuing operations
    
    
    341.1
    
    
    
    227.5Adjustments to reconcile to net cash provided by operating activities:Depreciation and amortization
    
    
    57.8
    
    
    
    54.6Deferred income taxes
    
    
    5.9
    
    
    
    10.8Excess tax benefits from stock options and awards
    
    
    (20.8
    )
    
    
    (19.8
    )Changes in assets and liabilities: (1)Receivables
    
    
    (133.5
    )
    
    
    (100.2
    )Inventories
    
    
    (25.2
    )
    
    
    (76.3
    )Accounts payable and accrued liabilities
    
    
    (24.7
    )
    
    
    (18.0
    )Other assets and liabilities, net
    
    
    8.7
    
    
    
    97.4Net cash provided by operating activities
    
    
    209.3
    
    
    
    176.0Cash flows from investing activities:Capital expenditures
    
    
    (56.1
    )
    
    
    (40.2
    )Cash paid for acquired businesses
    
    
    (170.5
    )
    
    
    (84.2
    )Proceeds from sales of property, plant and equipment and other
    
    
    0.8
    
    
    
    4.8Net cash used in investing activities
    
    
    (225.8
    )
    
    
    (119.6
    )Cash flows from financing activities:Proceeds from issuances of debt
    
    
    306.7
    
    
    
    Debt issue costs
    
    
    (2.7
    )
    
    
    Proceeds from debt derivatives
    
    
    10.0
    
    
    
    Repayments of debt
    
    
    (3.0
    )
    
    
    (2.1
    )Dividends
    
    
    (77.9
    )
    
    
    (68.9
    )Purchase of common shares
    
    
    (74.0
    )
    
    
    (185.4
    )Excess tax benefits from stock options and awards
    
    
    20.8
    
    
    
    19.8Activity under employee stock plans and other
    
    
    49.5
    
    
    
    69.9Net cash provided by (used in) financing activities
    
    
    229.4
    
    
    
    (166.7
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    3.6
    
    
    
    7.7Increase (decrease) in cash and cash equivalents
    
    
    216.5
    
    
    
    (102.6
    )Cash and cash equivalents, beginning of period
    
    
    423.5
    
    
    
    452.8Cash and cash equivalents, end of period
    
    $
    640.0
    
    
    $
    350.2
 
 (1)
    
    Net of the effects of acquisitions and translation.  -4-




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COOPER INDUSTRIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Accounting Policies
 Basis
of Presentation
  Impact of New Accounting Standards Accounting for Uncertainty in Income Taxes ( . Accounting for Income Taxes.
 Fair Value Measurements
 The Fair
Value Option for Financial Assets and Financial Liabilities
 Note 2. Stock-Based Compensation
  -5-




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Note 3. Acquisitions
     Total(in millions)Accounts receivable
    
    $
    22.0Inventory
    
    
    26.2Property, plant and equipment
    
    
    10.4Goodwill
    
    
    67.0Other intangible assets
    
    
    67.6Accounts payable
    
    
    (11.8
    )Other assets and liabilities, net
    
    
    (10.9
    )Net cash consideration
    
    $
    170.5
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Note 4. Inventories
 June 30,
    
    
    December 31,2007
    
    
    2006(in millions)Raw materials
    
    $
    238.3
    
    
    $
    204.2Work-in-process
    
    
    189.8
    
    
    
    160.7Finished goods
    
    
    375.1
    
    
    
    366.3Perishable tooling and supplies
    
    
    14.8
    
    
    
    14.6818.0
    
    
    
    745.8Allowance for excess and obsolete inventory
    
    
    (77.0
    )
    
    
    (65.6
    )Excess of current standard costs over LIFO costs
    
    
    (75.1
    )
    
    
    (72.6
    )Net inventories
    
    $
    665.9
    
    
    $
    607.6
 Note 5. Long-Term Debt
  Note 6. Shareholders Equity
    -7-




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Note 7. Segment Information
 RevenuesThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Electrical Products
    
    $
    1,272.3
    
    
    $
    1,103.5
    
    
    $
    2,482.9
    
    
    $
    2,164.1Tools
    
    
    191.4
    
    
    
    184.3
    
    
    
    374.8
    
    
    
    364.6Total revenues
    
    $
    1,463.7
    
    
    $
    1,287.8
    
    
    $
    2,857.7
    
    
    $
    2,528.7
 Operating EarningsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Electrical Products
    
    $
    213.9
    
    
    $
    177.5
    
    
    $
    407.4
    
    
    $
    337.6Tools
    
    
    21.6
    
    
    
    19.6
    
    
    
    43.4
    
    
    
    36.9Segment operating earnings
    
    
    235.5
    
    
    
    197.1
    
    
    
    450.8
    
    
    
    374.5General Corporate expenses
    
    
    22.2
    
    
    
    23.9
    
    
    
    43.8
    
    
    
    44.7Total operating earnings
    
    
    213.3
    
    
    
    173.2
    
    
    
    407.0
    
    
    
    329.8Interest expense, net
    
    
    12.9
    
    
    
    12.4
    
    
    
    25.8
    
    
    
    24.5Income from continuing operations before
income taxes
    
    $
    200.4
    
    
    $
    160.8
    
    
    $
    381.2
    
    
    $
    305.3
 Note 8. Pension and Other Postretirement Benefits
   -8-




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Pension BenefitsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Components of net periodic benefit cost:Service cost
    
    $
    1.0
    
    
    $
    3.5
    
    
    $
    2.0
    
    
    $
    8.4Interest cost
    
    
    10.2
    
    
    
    10.4
    
    
    
    20.4
    
    
    
    20.7Expected return on plan assets
    
    
    (12.8
    )
    
    
    (12.1
    )
    
    
    (25.6
    )
    
    
    (24.7
    )Amortization of prior service cost
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    (1.0
    )
    
    
    0.3Recognized actuarial loss
    
    
    2.7
    
    
    
    3.4
    
    
    
    5.3
    
    
    
    7.2Curtailment loss
    
    
    
    
    
    
    4.2
    
    
    
    
    
    
    
    4.2Net periodic benefit cost
    
    $
    0.6
    
    
    $
    9.5
    
    
    $
    1.1
    
    
    $
    16.1
 Other Postretirement BenefitsThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Components of net periodic benefit cost:Service cost
    
    $
    
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    0.1Interest cost
    
    
    1.3
    
    
    
    1.3
    
    
    
    2.6
    
    
    
    2.7Amortization of prior service cost
    
    
    (0.5
    )
    
    
    (0.5
    )
    
    
    (1.0
    )
    
    
    (1.0
    )Recognized actuarial gain
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (1.2
    )
    
    
    (1.4
    )Curtailment gain
    
    
    
    
    
    
    (3.2
    )
    
    
    
    
    
    
    (3.2
    )Net periodic benefit (income) cost
    
    $
    0.2
    
    
    $
    (3.0
    )
    
    $
    0.4
    
    
    $
    (2.8
    )
 Note 9. Income Taxes
    -9-




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Accounting for Uncertainty in
Income Taxes
 (in millions)Balance at January 1, 2007
    
    $
    122.8Additions for tax positions of the current year
    
    
    3.4Additions for tax positions of prior years
    
    
    1.6Reduction in tax positions for statute expirations
    
    
    (1.0
    )Reduction in tax for audit settlements
    
    
    (55.7
    )Balance at June 30, 2007
    
    $
    71.1
   Note 10. Net Income Per Common Share
  -10-




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Basic:Income from continuing operations
    
    $
    209.2
    
    
    $
    119.8
    
    
    $
    341.1
    
    
    $
    227.5Charge from discontinued operations
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    20.3Net income applicable to common stock
    
    $
    209.2
    
    
    $
    99.5
    
    
    $
    341.1
    
    
    $
    207.2Weighted average common shares outstanding
    
    
    183.7
    
    
    
    184.4
    
    
    
    183.4
    
    
    
    184.4Diluted:Income from continuing operations
    
    $
    209.2
    
    
    $
    119.8
    
    
    $
    341.1
    
    
    $
    227.5Charge from discontinued operations
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    20.3Net income applicable to common stock
    
    $
    209.2
    
    
    $
    99.5
    
    
    $
    341.1
    
    
    $
    207.2Weighted average common shares outstanding
    
    
    183.7
    
    
    
    184.4
    
    
    
    183.4
    
    
    
    184.4Incremental shares from assumed conversions:Options, performance-based stock awards and other employee awards
    
    
    3.2
    
    
    
    4.0
    
    
    
    3.3
    
    
    
    4.2Weighted average common shares and common share equivalents
    
    
    186.9
    
    
    
    188.4
    
    
    
    186.7
    
    
    
    188.6
  Note 11. Net Income and Other Nonowner Changes in Equity
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Net income
    
    $
    209.2
    
    
    $
    99.5
    
    
    $
    341.1
    
    
    $
    207.2Foreign currency translation gains
    
    
    12.9
    
    
    
    14.4
    
    
    
    11.8
    
    
    
    19.0Change in fair value of derivatives
    
    
    4.2
    
    
    
    (4.2
    )
    
    
    8.9
    
    
    
    (0.8
    )Net income and other nonowner
changes in equity
    
    $
    226.3
    
    
    $
    109.7
    
    
    $
    361.8
    
    
    $
    225.4
 -11-




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Note 12.
    
    Charge Related to Discontinued Operations
      -12-




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-13-




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-14-




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Note 13.
    
    Consolidating Financial Information
  -15-




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Consolidating Income Statements
Three Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    943.1
    
    
    $
    582.8
    
    
    $
    (62.2
    )
    
    $
    1,463.7Cost of sales
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    658.5
    
    
    
    384.5
    
    
    
    (62.2
    )
    
    
    981.3Selling and administrative
expenses
    
    
    3.0
    
    
    
    4.2
    
    
    
    18.8
    
    
    
    137.2
    
    
    
    105.9
    
    
    
    
    
    
    
    269.1Interest expense, net
    
    
    (0.4
    )
    
    
    11.2
    
    
    
    3.7
    
    
    
    
    
    
    
    (1.6
    )
    
    
    
    
    
    
    12.9Equity in earnings of
subsidiaries, net of tax
    
    
    248.4
    
    
    
    10.2
    
    
    
    111.0
    
    
    
    24.9
    
    
    
    177.0
    
    
    
    (571.5
    )
    
    
    Intercompany income
(expense)
    
    
    (8.0
    )
    
    
    (4.5
    )
    
    
    13.3
    
    
    
    (44.4
    )
    
    
    72.4
    
    
    
    (28.8
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    237.8
    
    
    
    (9.7
    )
    
    
    101.3
    
    
    
    127.9
    
    
    
    343.4
    
    
    
    (600.3
    )
    
    
    200.4Income tax expense
(benefit)
    
    
    
    
    
    
    (7.5
    )
    
    
    (75.7
    )
    
    
    38.0
    
    
    
    36.4
    
    
    
    
    
    
    
    (8.8
    )Income (loss) from
continuing operations
    
    
    237.8
    
    
    
    (2.2
    )
    
    
    177.0
    
    
    
    89.9
    
    
    
    307.0
    
    
    
    (600.3
    )
    
    
    209.2Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    237.8
    
    
    $
    (2.2
    )
    
    $
    177.0
    
    
    $
    89.9
    
    
    $
    307.0
    
    
    $
    (600.3
    )
    
    $
    209.2
 Three Months Ended June 30, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    845.1
    
    
    $
    499.8
    
    
    $
    (57.1
    )
    
    $
    1,287.8Cost of sales
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.2
    )
    
    
    588.0
    
    
    
    339.8
    
    
    
    (57.1
    )
    
    
    870.3Selling and administrative
expenses
    
    
    3.2
    
    
    
    5.5
    
    
    
    15.5
    
    
    
    129.7
    
    
    
    90.4
    
    
    
    
    
    
    
    244.3Interest expense, net
    
    
    (0.2
    )
    
    
    10.9
    
    
    
    2.7
    
    
    
    
    
    
    
    (1.0
    )
    
    
    
    
    
    
    12.4Equity in earnings of
subsidiaries, net of tax
    
    
    131.2
    
    
    
    9.2
    
    
    
    68.8
    
    
    
    25.6
    
    
    
    70.3
    
    
    
    (305.1
    )
    
    
    Intercompany income
(expense)
    
    
    (4.1
    )
    
    
    (3.7
    )
    
    
    2.8
    
    
    
    (118.4
    )
    
    
    147.9
    
    
    
    (24.5
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    124.1
    
    
    
    (10.7
    )
    
    
    53.6
    
    
    
    34.6
    
    
    
    288.8
    
    
    
    (329.6
    )
    
    
    160.8Income tax expense
(benefit)
    
    
    
    
    
    
    (7.7
    )
    
    
    (16.6
    )
    
    
    4.1
    
    
    
    61.2
    
    
    
    
    
    
    
    41.0Income (loss) from
continuing operations
    
    
    124.1
    
    
    
    (3.0
    )
    
    
    70.2
    
    
    
    30.5
    
    
    
    227.6
    
    
    
    (329.6
    )
    
    
    119.8Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income (loss)
    
    $
    124.1
    
    
    $
    (23.3
    )
    
    $
    70.2
    
    
    $
    30.5
    
    
    $
    227.6
    
    
    $
    (329.6
    )
    
    $
    99.5
 -16-




---



##### Table of Contents



Consolidating Income Statements
Six Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,861.6
    
    
    $
    1,119.2
    
    
    $
    (123.1
    )
    
    $
    2,857.7Cost of sales
    
    
    
    
    
    
    0.1
    
    
    
    0.8
    
    
    
    1,303.6
    
    
    
    744.8
    
    
    
    (123.1
    )
    
    
    1,926.2Selling and administrative
expenses
    
    
    5.4
    
    
    
    7.7
    
    
    
    34.5
    
    
    
    270.5
    
    
    
    206.4
    
    
    
    
    
    
    
    524.5Interest expense, net
    
    
    (1.0
    )
    
    
    22.4
    
    
    
    7.4
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    25.8Equity in earnings of
subsidiaries, net of tax
    
    
    417.6
    
    
    
    21.0
    
    
    
    206.7
    
    
    
    45.1
    
    
    
    279.9
    
    
    
    (970.3
    )
    
    
    Intercompany income
(expense)
    
    
    (14.9
    )
    
    
    (8.8
    )
    
    
    28.4
    
    
    
    (83.8
    )
    
    
    136.4
    
    
    
    (57.3
    )
    
    
    Income (loss) from
continuing operations,
before income taxes
    
    
    398.3
    
    
    
    (18.0
    )
    
    
    192.4
    
    
    
    248.8
    
    
    
    587.3
    
    
    
    (1,027.6
    )
    
    
    381.2Income tax expense
(benefit)
    
    
    
    
    
    
    (14.8
    )
    
    
    (87.4
    )
    
    
    76.8
    
    
    
    65.5
    
    
    
    
    
    
    
    40.1Income (loss) from
continuing operations
    
    
    398.3
    
    
    
    (3.2
    )
    
    
    279.8
    
    
    
    172.0
    
    
    
    521.8
    
    
    
    (1,027.6
    )
    
    
    341.1Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    398.3
    
    
    $
    (3.2
    )
    
    $
    279.8
    
    
    $
    172.0
    
    
    $
    521.8
    
    
    $
    (1,027.6
    )
    
    $
    341.1
 Six Months Ended June 30, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,668.2
    
    
    $
    978.2
    
    
    $
    (117.7
    )
    
    $
    2,528.7Cost of sales
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    1,168.8
    
    
    
    666.4
    
    
    
    (117.7
    )
    
    
    1,717.1Selling and administrative
expenses
    
    
    5.5
    
    
    
    7.7
    
    
    
    31.6
    
    
    
    259.8
    
    
    
    177.2
    
    
    
    
    
    
    
    481.8Interest expense, net
    
    
    (0.3
    )
    
    
    21.8
    
    
    
    5.3
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    24.5Equity in earnings of
subsidiaries, net of tax
    
    
    268.3
    
    
    
    18.5
    
    
    
    149.3
    
    
    
    47.2
    
    
    
    150.4
    
    
    
    (633.7
    )
    
    
    Intercompany income
(expense)
    
    
    (7.3
    )
    
    
    (7.0
    )
    
    
    7.8
    
    
    
    (212.8
    )
    
    
    267.9
    
    
    
    (48.6
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    255.8
    
    
    
    (17.6
    )
    
    
    120.2
    
    
    
    74.0
    
    
    
    555.2
    
    
    
    (682.3
    )
    
    
    305.3Income tax expense
(benefit)
    
    
    
    
    
    
    (13.8
    )
    
    
    (30.1
    )
    
    
    11.9
    
    
    
    109.8
    
    
    
    
    
    
    
    77.8Income (loss) from
continuing operations
    
    
    255.8
    
    
    
    (3.8
    )
    
    
    150.3
    
    
    
    62.1
    
    
    
    445.4
    
    
    
    (682.3
    )
    
    
    227.5Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income (loss)
    
    $
    255.8
    
    
    $
    (24.1
    )
    
    $
    150.3
    
    
    $
    62.1
    
    
    $
    445.4
    
    
    $
    (682.3
    )
    
    $
    207.2
 -17-




---



##### Table of Contents



Consolidating Balance Sheets
June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    113.5
    
    
    $
    
    
    
    $
    328.3
    
    
    $
    0.8
    
    
    $
    197.4
    
    
    $
    
    
    
    $
    640.0Receivables
    
    
    0.2
    
    
    
    
    
    
    
    0.8
    
    
    
    584.3
    
    
    
    477.5
    
    
    
    
    
    
    
    1,062.8Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    374.0
    
    
    
    291.9
    
    
    
    
    
    
    
    665.9Deferred income taxes and
other current assets
    
    
    0.3
    
    
    
    123.1
    
    
    
    30.6
    
    
    
    38.4
    
    
    
    43.9
    
    
    
    
    
    
    
    236.3Total current assets
    
    
    114.0
    
    
    
    123.1
    
    
    
    359.7
    
    
    
    997.5
    
    
    
    1,010.7
    
    
    
    
    
    
    
    2,605.0Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    59.7
    
    
    
    323.6
    
    
    
    297.3
    
    
    
    
    
    
    
    680.6Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,247.4
    
    
    
    1,166.7
    
    
    
    
    
    
    
    2,414.1Investment in subsidiaries
    
    
    4,777.3
    
    
    
    593.9
    
    
    
    4,394.7
    
    
    
    1,233.4
    
    
    
    2,248.3
    
    
    
    (13,247.6
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    2,872.2
    
    
    
    
    
    
    
    312.7
    
    
    
    (3,184.9
    )
    
    
    Intercompany accounts
receivable
    
    
    92.8
    
    
    
    807.0
    
    
    
    
    
    
    
    1,069.7
    
    
    
    763.7
    
    
    
    (2,733.2
    )
    
    
    Intercompany notes
receivable
    
    
    
    
    
    
    24.9
    
    
    
    725.3
    
    
    
    0.8
    
    
    
    4,220.4
    
    
    
    (4,971.4
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    13.4
    
    
    
    9.6
    
    
    
    48.3
    
    
    
    164.3
    
    
    
    
    
    
    
    235.6Total assets
    
    $
    4,984.1
    
    
    $
    1,562.3
    
    
    $
    8,421.2
    
    
    $
    4,920.7
    
    
    $
    10,184.1
    
    
    $
    (24,137.1
    )
    
    $
    5,935.3Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    8.7
    
    
    $
    
    
    
    $
    8.7Accounts payable
    
    
    38.7
    
    
    
    16.4
    
    
    
    8.2
    
    
    
    215.7
    
    
    
    203.3
    
    
    
    
    
    
    
    482.3Accrued liabilities
    
    
    5.7
    
    
    
    40.4
    
    
    
    72.3
    
    
    
    231.0
    
    
    
    145.4
    
    
    
    
    
    
    
    494.8Current discontinued
operations liability
    
    
    
    
    
    
    213.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213.0Current maturities of
long-term debt
    
    
    
    
    
    
    400.0
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    400.1Total current liabilities
    
    
    44.4
    
    
    
    669.8
    
    
    
    80.5
    
    
    
    446.7
    
    
    
    357.5
    
    
    
    
    
    
    
    1,598.9Long-term debt
    
    
    
    
    
    
    274.1
    
    
    
    624.0
    
    
    
    8.0
    
    
    
    0.9
    
    
    
    
    
    
    
    907.0Intercompany accounts
payable
    
    
    
    
    
    
    
    
    
    
    2,731.9
    
    
    
    
    
    
    
    
    
    
    
    (2,731.9
    )
    
    
    Intercompany notes
payable
    
    
    648.1
    
    
    
    352.3
    
    
    
    1,834.3
    
    
    
    1,741.7
    
    
    
    395.0
    
    
    
    (4,971.4
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Other long-term
liabilities
    
    
    
    
    
    
    (93.1
    )
    
    
    127.5
    
    
    
    175.7
    
    
    
    134.4
    
    
    
    
    
    
    
    344.5Total liabilities
    
    
    692.5
    
    
    
    1,533.1
    
    
    
    5,398.2
    
    
    
    2,372.1
    
    
    
    887.8
    
    
    
    (7,703.3
    )
    
    
    3,180.4Class A common stock
    
    
    2.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )
    
    
    1.8Class B common stock
    
    
    1.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    Subsidiary common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    501.1
    
    
    
    (501.1
    )
    
    
    Capital in excess of
par value
    
    
    3,473.0
    
    
    
    
    
    
    
    671.5
    
    
    
    1,445.3
    
    
    
    5,873.1
    
    
    
    (11,163.7
    )
    
    
    299.2Retained earnings
    
    
    789.6
    
    
    
    121.5
    
    
    
    2,469.6
    
    
    
    1,092.9
    
    
    
    2,981.9
    
    
    
    (4,895.2
    )
    
    
    2,560.3Accumulated other non-
owner changes in equity
    
    
    25.8
    
    
    
    (92.3
    )
    
    
    (118.1
    )
    
    
    10.4
    
    
    
    (59.8
    )
    
    
    127.6
    
    
    
    (106.4
    )Total shareholders equity
    
    
    4,291.6
    
    
    
    29.2
    
    
    
    3,023.0
    
    
    
    2,548.6
    
    
    
    9,296.3
    
    
    
    (16,433.8
    )
    
    
    2,754.9Total liabilities and
shareholders equity
    
    $
    4,984.1
    
    
    $
    1,562.3
    
    
    $
    8,421.2
    
    
    $
    4,920.7
    
    
    $
    10,184.1
    
    
    $
    (24,137.1
    )
    
    $
    5,935.3
 -18-




---



##### Table of Contents



Consolidating Balance Sheets
December 31, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    11.5
    
    
    $
    
    
    
    $
    204.9
    
    
    $
    (2.8
    )
    
    $
    209.9
    
    
    $
    
    
    
    $
    423.5Receivables
    
    
    0.2
    
    
    
    
    
    
    
    0.4
    
    
    
    469.3
    
    
    
    426.1
    
    
    
    
    
    
    
    896.0Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    348.6
    
    
    
    259.0
    
    
    
    
    
    
    
    607.6Deferred income taxes and
other current assets
    
    
    1.1
    
    
    
    141.4
    
    
    
    51.9
    
    
    
    25.6
    
    
    
    46.6
    
    
    
    
    
    
    
    266.6Total current assets
    
    
    12.8
    
    
    
    141.4
    
    
    
    257.2
    
    
    
    840.7
    
    
    
    941.6
    
    
    
    
    
    
    
    2,193.7Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    49.8
    
    
    
    320.0
    
    
    
    295.6
    
    
    
    
    
    
    
    665.4Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,025.0
    
    
    
    1,311.9
    
    
    
    
    
    
    
    2,336.9Investment in subsidiaries
    
    
    3,554.6
    
    
    
    570.0
    
    
    
    4,081.8
    
    
    
    1,219.2
    
    
    
    1,346.2
    
    
    
    (10,771.8
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    2,811.2
    
    
    
    
    
    
    
    312.8
    
    
    
    (3,124.0
    )
    
    
    Intercompany accounts
receivable
    
    
    686.3
    
    
    
    806.5
    
    
    
    
    
    
    
    1,289.0
    
    
    
    598.6
    
    
    
    (3,380.4
    )
    
    
    Intercompany notes
receivable
    
    
    91.8
    
    
    
    24.9
    
    
    
    758.5
    
    
    
    0.7
    
    
    
    4,067.3
    
    
    
    (4,943.2
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    20.0
    
    
    
    2.0
    
    
    
    23.0
    
    
    
    133.8
    
    
    
    
    
    
    
    178.8Total assets
    
    $
    4,345.5
    
    
    $
    1,562.8
    
    
    $
    7,960.5
    
    
    $
    4,717.6
    
    
    $
    9,007.8
    
    
    $
    (22,219.4
    )
    
    $
    5,374.8Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5.0
    
    
    $
    
    
    
    $
    5.0Accounts payable
    
    
    32.1
    
    
    
    17.2
    
    
    
    4.5
    
    
    
    225.9
    
    
    
    192.0
    
    
    
    
    
    
    
    471.7Accrued liabilities
    
    
    5.2
    
    
    
    43.4
    
    
    
    84.5
    
    
    
    230.0
    
    
    
    159.2
    
    
    
    
    
    
    
    522.3Current discontinued
operations liability
    
    
    
    
    
    
    199.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    199.6Current maturities of
long-term debt
    
    
    
    
    
    
    300.0
    
    
    
    
    
    
    
    
    
    
    
    0.7
    
    
    
    
    
    
    
    300.7Total current liabilities
    
    
    37.3
    
    
    
    560.2
    
    
    
    89.0
    
    
    
    455.9
    
    
    
    356.9
    
    
    
    
    
    
    
    1,499.3Long-term debt
    
    
    
    
    
    
    370.5
    
    
    
    323.9
    
    
    
    8.0
    
    
    
    0.4
    
    
    
    
    
    
    
    702.8Intercompany accounts
payable
    
    
    
    
    
    
    
    
    
    
    3,380.4
    
    
    
    
    
    
    
    
    
    
    
    (3,380.4
    )
    
    
    Intercompany notes
payable
    
    
    552.3
    
    
    
    329.9
    
    
    
    1,901.4
    
    
    
    1,707.3
    
    
    
    452.3
    
    
    
    (4,943.2
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Other long-term
liabilities
    
    
    
    
    
    
    (57.7
    )
    
    
    119.2
    
    
    
    172.9
    
    
    
    133.0
    
    
    
    
    
    
    
    367.4Total liabilities
    
    
    589.6
    
    
    
    1,532.9
    
    
    
    5,813.9
    
    
    
    2,344.1
    
    
    
    942.6
    
    
    
    (8,323.6
    )
    
    
    2,899.5Class A common stock
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    0.9Class B common stock
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    Subsidiary common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500.3
    
    
    
    (500.3
    )
    
    
    Capital in excess of
par value
    
    
    3,392.0
    
    
    
    
    
    
    
    56.2
    
    
    
    1,431.5
    
    
    
    5,174.7
    
    
    
    (9,776.0
    )
    
    
    278.4Retained earnings
    
    
    358.4
    
    
    
    128.3
    
    
    
    2,230.1
    
    
    
    943.3
    
    
    
    2,485.6
    
    
    
    (3,821.3
    )
    
    
    2,324.4Accumulated other non-
owner changes in equity
    
    
    4.0
    
    
    
    (98.4
    )
    
    
    (139.7
    )
    
    
    (1.3
    )
    
    
    (95.4
    )
    
    
    202.4
    
    
    
    (128.4
    )Total shareholders equity
    
    
    3,755.9
    
    
    
    29.9
    
    
    
    2,146.6
    
    
    
    2,373.5
    
    
    
    8,065.2
    
    
    
    (13,895.8
    )
    
    
    2,475.3Total liabilities and
shareholders equity
    
    $
    4,345.5
    
    
    $
    1,562.8
    
    
    $
    7,960.5
    
    
    $
    4,717.6
    
    
    $
    9,007.8
    
    
    $
    (22,219.4
    )
    
    $
    5,374.8
 -19-




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##### Table of Contents



Consolidating Statements of Cash Flows
Six Months Ended June 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (10.1
    )
    
    $
    (21.9
    )
    
    $
    42.1
    
    
    $
    29.6
    
    
    $
    169.6
    
    
    $
    
    
    
    $
    209.3Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (15.1
    )
    
    
    (25.2
    )
    
    
    (15.8
    )
    
    
    
    
    
    
    (56.1
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75.2
    )
    
    
    (95.3
    )
    
    
    
    
    
    
    (170.5
    )Investment in affiliates
    
    
    
    
    
    
    
    
    
    
    (44.3
    )
    
    
    
    
    
    
    
    
    
    
    44.3
    
    
    
    Loans to affiliates
    
    
    (60.0
    )
    
    
    
    
    
    
    (22.4
    )
    
    
    
    
    
    
    (528.9
    )
    
    
    611.3
    
    
    
    Repayments of loans from affiliates
    
    
    151.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    408.2
    
    
    
    (560.0
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    52.8
    
    
    
    15.9
    
    
    
    4.4
    
    
    
    (73.1
    )
    
    
    Proceeds from sale of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    
    
    
    
    0.8Net cash provided by (used in)
investing activities
    
    
    91.8
    
    
    
    
    
    
    
    (29.0
    )
    
    
    (84.1
    )
    
    
    (227.0
    )
    
    
    22.5
    
    
    
    (225.8
    )Cash flows from financing
activities:Proceeds from issuance of debt
    
    
    
    
    
    
    
    
    
    
    300.0
    
    
    
    
    
    
    
    6.7
    
    
    
    
    
    
    
    306.7Debt issue costs
    
    
    
    
    
    
    
    
    
    
    (2.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.7
    )Proceeds from debt derivatives
    
    
    
    
    
    
    
    
    
    
    10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.0Repayments of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (3.0
    )Borrowings from affiliates
    
    
    385.2
    
    
    
    22.4
    
    
    
    203.7
    
    
    
    
    
    
    
    
    
    
    
    (611.3
    )
    
    
    Repayments of loans to affiliates
    
    
    (289.4
    )
    
    
    
    
    
    
    (268.9
    )
    
    
    
    
    
    
    (1.7
    )
    
    
    560.0
    
    
    
    Other intercompany financing
activities
    
    
    58.3
    
    
    
    (0.5
    )
    
    
    (126.7
    )
    
    
    58.1
    
    
    
    10.8
    
    
    
    
    
    
    
    Dividends
    
    
    (77.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77.9
    )Dividends paid to affiliates
    
    
    (57.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15.8
    )
    
    
    73.1
    
    
    
    Purchase of common shares
    
    
    1.4
    
    
    
    
    
    
    
    (75.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (74.0
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    20.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.8Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44.3
    
    
    
    (44.3
    )
    
    
    Employee stock plan activity and
other
    
    
    
    
    
    
    
    
    
    
    49.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49.5Net cash provided by (used in)
financing activities
    
    
    20.3
    
    
    
    21.9
    
    
    
    110.3
    
    
    
    58.1
    
    
    
    41.3
    
    
    
    (22.5
    )
    
    
    229.4Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.6
    
    
    
    
    
    
    
    3.6Increase (decrease) in cash and cash
equivalents
    
    
    102.0
    
    
    
    
    
    
    
    123.4
    
    
    
    3.6
    
    
    
    (12.5
    )
    
    
    
    
    
    
    216.5Cash and cash equivalents,
beginning of period
    
    
    11.5
    
    
    
    
    
    
    
    204.9
    
    
    
    (2.8
    )
    
    
    209.9
    
    
    
    
    
    
    
    423.5Cash and cash equivalents, end of
period
    
    $
    113.5
    
    
    $
    
    
    
    $
    328.3
    
    
    $
    0.8
    
    
    $
    197.4
    
    
    $
    
    
    
    $
    640.0
 -20-




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##### Table of Contents



Consolidating Statements of Cash Flows
Six Months Ended June 30, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (9.8
    )
    
    $
    (10.4
    )
    
    $
    2.4
    
    
    $
    (64.6
    )
    
    $
    258.4
    
    
    $
    
    
    
    $
    176.0Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (7.4
    )
    
    
    (15.7
    )
    
    
    (17.1
    )
    
    
    
    
    
    
    (40.2
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    (42.7
    )
    
    
    (41.5
    )
    
    
    
    
    
    
    
    
    
    
    (84.2
    )Investment in affiliates
    
    
    (12.2
    )
    
    
    
    
    
    
    (36.0
    )
    
    
    
    
    
    
    
    
    
    
    48.2
    
    
    
    Loans to affiliates
    
    
    (22.1
    )
    
    
    
    
    
    
    (12.3
    )
    
    
    
    
    
    
    (275.4
    )
    
    
    309.8
    
    
    
    Repayments of loans from affiliates
    
    
    62.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87.5
    
    
    
    (149.5
    )
    
    
    Dividends from affiliates
    
    
    5.0
    
    
    
    
    
    
    
    44.7
    
    
    
    
    
    
    
    3.9
    
    
    
    (53.6
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    4.2
    
    
    
    
    
    
    
    4.8Net cash provided by (used in)
investing activities
    
    
    32.7
    
    
    
    
    
    
    
    (53.7
    )
    
    
    (56.6
    )
    
    
    (196.9
    )
    
    
    154.9
    
    
    
    (119.6
    )Cash flows from financing
activities:Repayments of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.1
    )
    
    
    
    
    
    
    (2.1
    )Borrowings from affiliates
    
    
    148.9
    
    
    
    12.2
    
    
    
    148.6
    
    
    
    
    
    
    
    0.1
    
    
    
    (309.8
    )
    
    
    Repayments of loans to affiliates
    
    
    (46.5
    )
    
    
    
    
    
    
    (60.7
    )
    
    
    (2.4
    )
    
    
    (39.9
    )
    
    
    149.5
    
    
    
    Other intercompany financing
activities
    
    
    4.3
    
    
    
    (1.8
    )
    
    
    (14.6
    )
    
    
    125.1
    
    
    
    (113.0
    )
    
    
    
    
    
    
    Dividends
    
    
    (68.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (68.9
    )Dividends paid to affiliates
    
    
    (48.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.0
    )
    
    
    53.6
    
    
    
    Subsidiary purchase of parent shares
    
    
    10.3
    
    
    
    
    
    
    
    (195.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (185.4
    )Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48.2
    
    
    
    (48.2
    )
    
    
    Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    19.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.8Employee stock plan activity and
other
    
    
    
    
    
    
    
    
    
    
    69.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69.9Net cash provided by (used in)
financing activities
    
    
    (0.5
    )
    
    
    10.4
    
    
    
    (32.7
    )
    
    
    122.7
    
    
    
    (111.7
    )
    
    
    (154.9
    )
    
    
    (166.7
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.7
    
    
    
    
    
    
    
    7.7Increase (decrease) in cash and cash
equivalents
    
    
    22.4
    
    
    
    
    
    
    
    (84.0
    )
    
    
    1.5
    
    
    
    (42.5
    )
    
    
    
    
    
    
    (102.6
    )Cash and cash equivalents,
beginning of period
    
    
    64.1
    
    
    
    
    
    
    
    144.4
    
    
    
    (3.5
    )
    
    
    247.8
    
    
    
    
    
    
    
    452.8Cash and cash equivalents, end of
period
    
    $
    86.5
    
    
    $
    
    
    
    $
    60.4
    
    
    $
    (2.0
    )
    
    $
    205.3
    
    
    $
    
    
    
    $
    350.2
 -21-




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
 Three Months Ended June 30, 2007 Compared With Three Months Ended June 30, 2006
  Revenues:
    Costs and Expenses:
      -22-




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##### Table of Contents



Operating Earnings:
    Income Taxes:
  Charge Related to Discontinued Operations:
  Six Months Ended June 30, 2007 Compared With Six Months Ended June 30, 2006
  Revenues:
  -23-




---



##### Table of Contents



Costs and Expenses:
        Operating Earnings:
    -24-




---



##### Table of Contents



Income Taxes:
  Liquidity and Capital Resources
 Liquidity
       -25-




---



##### Table of Contents



Capital Resources:
       Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
  Backlog
  June 30,2007
    
    
    2006(in millions)Electrical Products
    
    $
    680.6
    
    
    $
    575.6Tools
    
    
    75.5
    
    
    
    71.8$
    756.1
    
    
    $
    647.4
 -26-




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##### Table of Contents



Recently Issued Accounting Standards
  Private Securities Litigation Reform Act Safe Harbor Statement
  
 Item 4. Controls and Procedures
   -27-




---



##### Table of Contents



PART II  OTHER INFORMATION
 
       -28-




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##### Table of Contents



-29-




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##### Table of Contents



-30-




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##### Table of Contents



Purchases of Equity Securities (1)
 Total Number
    
    
    Maximumof Shares
    
    
    Number ofTotal
    
    
    Average
    
    
    Purchased as Part
    
    
    Shares that MayNumber of
    
    
    Price
    
    
    of Publicly
    
    
    Yet Be PurchasedShares
    
    
    Paid per
    
    
    Announced Plans
    
    
    Under the PlansPeriod
    
    Purchased
    
    
    Share
    
    
    or Programs(2)
    
    
    or Programs(2)As of 3/31/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,346,3004/01/07  4/30/07
    
    
    367,200
    
    
    $
    46.17
    
    
    
    367,200
    
    
    
    8,979,1005/01/07  5/31/07
    
    
    120,600
    
    
    
    51.44
    
    
    
    120,600
    
    
    
    8,858,5006/01/07  6/30/07
    
    
    210,000
    
    
    
    54.96
    
    
    
    210,000
    
    
    
    9,648,500Total
    
    
    697,800
    
    
    $
    49.72
    
    
    
    697,800
 
 (1)
    
    On February 14, 2007, Cooper announced that the Board of Directors approved a
two-for-one stock split of Cooper common stock. The record date for the stock split was
February 28, 2007 and the distribution date was March 15, 2007. All share and per share
information presented in this Form 10-Q has been retroactively restated to reflect the effect
of the stock split.(2)
    
    On November 2, 2004, Coopers Board of Directors authorized the repurchase
of up to ten million shares of Cooper Class A common stock. Cooper has also announced that
the Board authorized the repurchase of shares issued from time to time under its equity
compensation plans, matched savings plan and dividend reinvestment plan in order to offset the
dilution that results from issuing shares under these plans. For 2007, Coopers current
estimate is that 4.0 million shares will be issued under equity compensation plans, which is
reflected in the above table. 
   -31-




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##### Table of Contents



1.
    
    Proposal for the election of four directors for terms expiring in 2010 and one
in 2009:
 Stephen B. Butler
    
    Dan F. Smith
    
    Gerald B. Smith
    
    Mark S. Thompson
    
    Lawrence D. KingsleyVotes For:
    
    
    93,509,805
    
    
    
    94,054,349
    
    
    
    94,020,876
    
    
    
    94,148,764
    
    
    
    94,150,537Votes Withheld:
    
    
    1,790,661
    
    
    
    1,246,116
    
    
    
    1,279,590
    
    
    
    1,151,702
    
    
    
    1,149,928
 2.
    
    Proposal to appoint Ernst & Young LLP as independent auditors for 2007:
 Votes For:
    
    
    94,122,260Votes Against:
    
    
    562,430Abstain:
    
    
    615,775Non-Vote:
    
    
    
 3.
    
    Proposal to amend Coopers Bye-laws to increase authorized common shares:
 Votes For:
    
    
    80,728,730Votes Against:
    
    
    13,829,626Abstain:
    
    
    742,109Non-Vote:
    
    
    
 4.
    
    Shareholder proposal to implement a code of conduct based upon international labor
organization human rights standards:
 Votes For:
    
    
    7,327,811Votes Against:
    
    
    51,863,263Abstain:
    
    
    30,149,311Non-Vote:
    
    
    5,960,081
 
  12.
    
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2002 through 2006 and the Six Months Ended June 30, 2007 and 2006.23.
    
    
    Consent of Bates White, LLC.31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 -32-




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##### Table of Contents



Cooper Industries, Ltd.
(Registrant)Date: August 7, 2007
    /s/ Terry A. KlebeTerry A. KlebeSenior Vice President and Chief Financial OfficerDate: August 7, 2007
    /s/ Jeffrey B. LevosJeffrey B. LevosVice President, Finance and
Chief Accounting Officer -33-




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##### Table of Contents



Exhibit No.12.
    
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2002 through 2006
and the Six Months Ended June 30, 2007 and 2006.23.
    
    
    Consent of Bates White, LLC.31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.