##### Table of Contents



10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 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 Ratios of Earnings to Fixed ChargesConsent of Bates White, LLC.Certification 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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions, where applicable)Revenues
    
    $
    1,501.3
    
    
    $
    1,314.6
    
    
    $
    4,359.0
    
    
    $
    3,843.3Cost of sales
    
    
    1,008.1
    
    
    
    887.2
    
    
    
    2,937.6
    
    
    
    2,604.3Selling and administrative expenses
    
    
    276.7
    
    
    
    240.8
    
    
    
    801.2
    
    
    
    722.6Operating earnings
    
    
    216.5
    
    
    
    186.6
    
    
    
    620.2
    
    
    
    516.4Income from Belden agreement
    
    
    23.5
    
    
    
    
    
    
    
    26.8
    
    
    
    Interest expense, net
    
    
    12.3
    
    
    
    14.0
    
    
    
    38.1
    
    
    
    38.5Income from continuing operations before
income taxes
    
    
    227.7
    
    
    
    172.6
    
    
    
    608.9
    
    
    
    477.9Income taxes
    
    
    55.8
    
    
    
    44.4
    
    
    
    95.9
    
    
    
    122.2Income from continuing operations
    
    
    171.9
    
    
    
    128.2
    
    
    
    513.0
    
    
    
    355.7Charge related to discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    335.4Income per common share:Basic:Income from continuing operations
    
    $
    .94
    
    
    $
    .70
    
    
    $
    2.80
    
    
    $
    1.93Charge from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .11Net income
    
    $
    .94
    
    
    $
    .70
    
    
    $
    2.80
    
    
    $
    1.82Diluted:Income from continuing operations
    
    $
    .93
    
    
    $
    .69
    
    
    $
    2.75
    
    
    $
    1.89Charge from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    .11Net income
    
    $
    .93
    
    
    $
    .69
    
    
    $
    2.75
    
    
    $
    1.78Cash dividends per common share
    
    $
    .21
    
    
    $
    .185
    
    
    $
    .63
    
    
    $
    .555
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COOPER INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2007
    
    
    2006(in millions)ASSETSCash and cash equivalents
    
    $
    307.4
    
    
    $
    423.5Receivables
    
    
    1,117.3
    
    
    
    896.0Inventories
    
    
    665.9
    
    
    
    607.6Deferred income taxes and other current assets
    
    
    262.3
    
    
    
    266.6Total current assets
    
    
    2,352.9
    
    
    
    2,193.7Property, plant and equipment, less accumulated depreciation
    
    
    701.8
    
    
    
    665.4Goodwill
    
    
    2,463.4
    
    
    
    2,336.9Other noncurrent assets
    
    
    250.1
    
    
    
    178.8Total assets
    
    $
    5,768.2
    
    
    $
    5,374.8LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt
    
    $
    15.3
    
    
    $
    5.0Accounts payable
    
    
    544.8
    
    
    
    471.7Accrued liabilities
    
    
    545.7
    
    
    
    522.3Current discontinued operations liability
    
    
    191.0
    
    
    
    199.6Current maturities of long-term debt
    
    
    100.0
    
    
    
    300.7Total current liabilities
    
    
    1,396.8
    
    
    
    1,499.3Long-term debt
    
    
    910.0
    
    
    
    702.8Postretirement benefits other than pensions
    
    
    80.8
    
    
    
    83.2Long-term discontinued operations liability
    
    
    330.0
    
    
    
    330.0Other long-term liabilities
    
    
    336.1
    
    
    
    284.2Total liabilities
    
    
    3,053.7
    
    
    
    2,899.5Common stock, $.01 par value
    
    
    1.8
    
    
    
    0.9Capital in excess of par value
    
    
    119.1
    
    
    
    278.4Retained earnings
    
    
    2,694.0
    
    
    
    2,324.4Accumulated other nonowner changes in equity
    
    
    (100.4
    )
    
    
    (128.4
    )Total shareholders equity
    
    
    2,714.5
    
    
    
    2,475.3Total liabilities and shareholders equity
    
    $
    5,768.2
    
    
    $
    5,374.8
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COOPER INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2007
    
    
    2006(in millions)Cash flows from operating activities:Net income
    
    $
    513.0
    
    
    $
    335.4Plus: charge related to discontinued operations
    
    
    
    
    
    
    20.3Income from continuing operations
    
    
    513.0
    
    
    
    355.7Adjustments to reconcile to net cash provided by operating activities:Depreciation and amortization
    
    
    87.7
    
    
    
    85.0Deferred income taxes
    
    
    5.5
    
    
    
    12.6Excess tax benefits from stock options and awards
    
    
    (19.6
    )
    
    
    (21.4
    )Changes in assets and liabilities: (1)Receivables
    
    
    (161.9
    )
    
    
    (87.8
    )Inventories
    
    
    (11.2
    )
    
    
    (81.5
    )Accounts payable and accrued liabilities
    
    
    36.5
    
    
    
    (0.9
    )Other assets and liabilities, net
    
    
    13.3
    
    
    
    113.0Net cash provided by operating activities
    
    
    463.3
    
    
    
    374.7Cash flows from investing activities:Capital expenditures
    
    
    (91.0
    )
    
    
    (58.1
    )Cash paid for acquired businesses
    
    
    (194.5
    )
    
    
    (279.4
    )Proceeds from sales of property, plant and equipment and other
    
    
    0.8
    
    
    
    18.4Net cash used in investing activities
    
    
    (284.7
    )
    
    
    (319.1
    )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
    
    
    (303.0
    )
    
    
    (13.3
    )Dividends
    
    
    (116.2
    )
    
    
    (103.0
    )Purchase of common shares
    
    
    (274.8
    )
    
    
    (261.7
    )Excess tax benefits from stock options and awards
    
    
    19.6
    
    
    
    21.4Activity under employee stock plans and other
    
    
    54.7
    
    
    
    81.1Net cash used in financing activities
    
    
    (305.7
    )
    
    
    (275.5
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    11.0
    
    
    
    11.0Decrease in cash and cash equivalents
    
    
    (116.1
    )
    
    
    (208.9
    )Cash and cash equivalents, beginning of period
    
    
    423.5
    
    
    
    452.8Cash and cash equivalents, end of period
    
    $
    307.4
    
    
    $
    243.9
 
 (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 and Divestitures
     Total(in millions)Accounts receivable
    
    $
    37.6Inventory
    
    
    33.6Property, plant and equipment
    
    
    20.9Goodwill
    
    
    104.3Other intangible assets
    
    
    75.0Accounts payable
    
    
    (41.9
    )Other assets and liabilities, net
    
    
    (35.0
    )Net cash consideration
    
    $
    194.5
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Note 4. Inventories
 September 30,
    
    
    December 31,2007
    
    
    2006(in millions)Raw materials
    
    $
    230.8
    
    
    $
    204.2Work-in-process
    
    
    186.4
    
    
    
    160.7Finished goods
    
    
    402.2
    
    
    
    366.3Perishable tooling and supplies
    
    
    15.0
    
    
    
    14.6834.4
    
    
    
    745.8Allowance for excess and obsolete inventory
    
    
    (76.1
    )
    
    
    (65.6
    )Excess of current standard costs over LIFO costs
    
    
    (92.4
    )
    
    
    (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
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Electrical Products
    
    $
    1,301.9
    
    
    $
    1,127.4
    
    
    $
    3,784.8
    
    
    $
    3,291.5Tools
    
    
    199.4
    
    
    
    187.2
    
    
    
    574.2
    
    
    
    551.8Total revenues
    
    $
    1,501.3
    
    
    $
    1,314.6
    
    
    $
    4,359.0
    
    
    $
    3,843.3
 -8-




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Operating EarningsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Electrical Products
    
    $
    224.2
    
    
    $
    186.4
    
    
    $
    631.6
    
    
    $
    524.0Tools
    
    
    22.0
    
    
    
    24.3
    
    
    
    65.4
    
    
    
    61.2Segment operating earnings
    
    
    246.2
    
    
    
    210.7
    
    
    
    697.0
    
    
    
    585.2General Corporate expenses
    
    
    29.7
    
    
    
    24.1
    
    
    
    76.8
    
    
    
    68.8Total operating earnings
    
    
    216.5
    
    
    
    186.6
    
    
    
    620.2
    
    
    
    516.4Income from Belden agreement
    
    
    23.5
    
    
    
    
    
    
    
    26.8
    
    
    
    Interest expense, net
    
    
    12.3
    
    
    
    14.0
    
    
    
    38.1
    
    
    
    38.5Income from continuing operations before
income taxes
    
    $
    227.7
    
    
    $
    172.6
    
    
    $
    608.9
    
    
    $
    477.9
 Note 8. Pension and Other Postretirement Benefits
   Pension BenefitsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Components of net periodic benefit cost:Service cost
    
    $
    1.0
    
    
    $
    4.1
    
    
    $
    3.0
    
    
    $
    12.5Interest cost
    
    
    10.2
    
    
    
    10.4
    
    
    
    30.6
    
    
    
    31.1Expected return on plan assets
    
    
    (12.8
    )
    
    
    (12.2
    )
    
    
    (38.4
    )
    
    
    (36.9
    )Amortization of prior service cost
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    (1.5
    )
    
    
    0.4Recognized actuarial loss
    
    
    2.7
    
    
    
    2.9
    
    
    
    8.0
    
    
    
    10.1Curtailment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.2Net periodic benefit cost
    
    $
    0.6
    
    
    $
    5.3
    
    
    $
    1.7
    
    
    $
    21.4
 -9-




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Other Postretirement BenefitsThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Components of net periodic benefit cost:Service cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.1Interest cost
    
    
    1.3
    
    
    
    1.4
    
    
    
    3.9
    
    
    
    4.1Amortization of prior service cost
    
    
    (0.5
    )
    
    
    (0.5
    )
    
    
    (1.5
    )
    
    
    (1.5
    )Recognized actuarial gain
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (1.8
    )
    
    
    (2.1
    )Curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.2
    )Net periodic benefit (income) cost
    
    $
    0.2
    
    
    $
    0.2
    
    
    $
    0.6
    
    
    $
    (2.6
    )
 Note 9. Income Taxes
        -10-




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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
    
    
    5.1Additions for tax positions of prior years
    
    
    3.3Reduction in tax positions for statute expirations
    
    
    (1.6
    )Reduction in tax for audit settlements
    
    
    (55.7
    )Balance at September 30, 2007
    
    $
    73.9
   Note 10. Net Income Per Common Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Basic:Income from continuing operations
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    355.7Charge from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income applicable to common stock
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    335.4Weighted average common shares outstanding
    
    
    182.4
    
    
    
    182.8
    
    
    
    183.0
    
    
    
    184.0Diluted:Income from continuing operations
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    355.7Charge from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income applicable to common stock
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    335.4Weighted average common shares outstanding
    
    
    182.4
    
    
    
    182.8
    
    
    
    183.0
    
    
    
    184.0Incremental shares from assumed conversions:Options, performance-based stock
awards and other employee awards
    
    
    3.1
    
    
    
    3.8
    
    
    
    3.3
    
    
    
    4.0Weighted average common shares
and common share equivalents
    
    
    185.5
    
    
    
    186.6
    
    
    
    186.3
    
    
    
    188.0
 -11-




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Note 11. Net Income and Other Nonowner Changes in Equity
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(in millions)Net income
    
    $
    171.9
    
    
    $
    128.2
    
    
    $
    513.0
    
    
    $
    335.4Foreign currency translation gains
    
    
    2.0
    
    
    
    15.8
    
    
    
    13.8
    
    
    
    34.8Change in fair value of derivatives
    
    
    3.4
    
    
    
    3.9
    
    
    
    12.3
    
    
    
    3.1Net income and other nonowner
changes in equity
    
    $
    177.3
    
    
    $
    147.9
    
    
    $
    539.1
    
    
    $
    373.3
 Note 12. Charge Related to Discontinued Operations
    -12-




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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 September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    956.5
    
    
    $
    622.0
    
    
    $
    (77.2
    )
    
    $
    1,501.3Cost of sales
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    664.2
    
    
    
    420.1
    
    
    
    (77.2
    )
    
    
    1,008.1Selling and administrative
expenses
    
    
    1.8
    
    
    
    8.9
    
    
    
    17.1
    
    
    
    140.2
    
    
    
    108.7
    
    
    
    
    
    
    
    276.7Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23.5
    
    
    
    
    
    
    
    23.5Interest expense, net
    
    
    (0.3
    )
    
    
    5.6
    
    
    
    8.1
    
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    12.3Equity in earnings of
subsidiaries, net of tax
    
    
    211.0
    
    
    
    10.0
    
    
    
    112.8
    
    
    
    26.3
    
    
    
    116.7
    
    
    
    (476.8
    )
    
    
    Intercompany income
(expense)
    
    
    (8.8
    )
    
    
    (9.2
    )
    
    
    15.7
    
    
    
    (39.6
    )
    
    
    70.6
    
    
    
    (28.7
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    200.7
    
    
    
    (13.7
    )
    
    
    102.3
    
    
    
    138.8
    
    
    
    305.1
    
    
    
    (505.5
    )
    
    
    227.7Income tax expense
(benefit)
    
    
    
    
    
    
    (9.4
    )
    
    
    (14.6
    )
    
    
    42.4
    
    
    
    37.4
    
    
    
    
    
    
    
    55.8Net income (loss)
    
    $
    200.7
    
    
    $
    (4.3
    )
    
    $
    116.9
    
    
    $
    96.4
    
    
    $
    267.7
    
    
    $
    (505.5
    )
    
    $
    171.9
 Three Months Ended September 30, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    860.9
    
    
    $
    508.3
    
    
    $
    (54.6
    )
    
    $
    1,314.6Cost of sales
    
    
    
    
    
    
    (0.2
    )
    
    
    0.5
    
    
    
    598.5
    
    
    
    343.0
    
    
    
    (54.6
    )
    
    
    887.2Selling and administrative
expenses
    
    
    2.0
    
    
    
    4.9
    
    
    
    16.8
    
    
    
    126.0
    
    
    
    91.1
    
    
    
    
    
    
    
    240.8Interest expense, net
    
    
    (0.2
    )
    
    
    11.7
    
    
    
    3.6
    
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    14.0Equity in earnings of
subsidiaries, net of tax
    
    
    159.9
    
    
    
    (136.8
    )
    
    
    98.4
    
    
    
    22.3
    
    
    
    96.2
    
    
    
    (240.0
    )
    
    
    Intercompany income
(expense)
    
    
    (4.9
    )
    
    
    145.0
    
    
    
    3.0
    
    
    
    (105.5
    )
    
    
    (12.7
    )
    
    
    (24.9
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    153.2
    
    
    
    (8.2
    )
    
    
    80.5
    
    
    
    53.2
    
    
    
    158.8
    
    
    
    (264.9
    )
    
    
    172.6Income tax expense
(benefit)
    
    
    
    
    
    
    (7.7
    )
    
    
    (15.9
    )
    
    
    11.7
    
    
    
    56.3
    
    
    
    
    
    
    
    44.4Net income (loss)
    
    $
    153.2
    
    
    $
    (0.5
    )
    
    $
    96.4
    
    
    $
    41.5
    
    
    $
    102.5
    
    
    $
    (264.9
    )
    
    $
    128.2
 -16-




---



##### Table of Contents



Consolidating Income Statements
Nine Months Ended September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,818.1
    
    
    $
    1,741.2
    
    
    $
    (200.3
    )
    
    $
    4,359.0Cost of sales
    
    
    
    
    
    
    0.1
    
    
    
    1.8
    
    
    
    1,967.8
    
    
    
    1,168.2
    
    
    
    (200.3
    )
    
    
    2,937.6Selling and administrative
expenses
    
    
    7.2
    
    
    
    16.6
    
    
    
    51.6
    
    
    
    410.7
    
    
    
    315.1
    
    
    
    
    
    
    
    801.2Income from Belden
agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26.8
    
    
    
    
    
    
    
    26.8Interest expense, net
    
    
    (1.3
    )
    
    
    28.0
    
    
    
    15.5
    
    
    
    
    
    
    
    (4.1
    )
    
    
    
    
    
    
    38.1Equity in earnings of
subsidiaries, net of tax
    
    
    628.6
    
    
    
    31.0
    
    
    
    319.5
    
    
    
    71.4
    
    
    
    396.6
    
    
    
    (1,447.1
    )
    
    
    Intercompany income
(expense)
    
    
    (23.7
    )
    
    
    (18.0
    )
    
    
    44.1
    
    
    
    (123.4
    )
    
    
    207.0
    
    
    
    (86.0
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    599.0
    
    
    
    (31.7
    )
    
    
    294.7
    
    
    
    387.6
    
    
    
    892.4
    
    
    
    (1,533.1
    )
    
    
    608.9Income tax expense
(benefit)
    
    
    
    
    
    
    (24.2
    )
    
    
    (102.0
    )
    
    
    119.2
    
    
    
    102.9
    
    
    
    
    
    
    
    95.9Income (loss) from
continuing operations
    
    
    599.0
    
    
    
    (7.5
    )
    
    
    396.7
    
    
    
    268.4
    
    
    
    789.5
    
    
    
    (1,533.1
    )
    
    
    513.0Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    599.0
    
    
    $
    (7.5
    )
    
    $
    396.7
    
    
    $
    268.4
    
    
    $
    789.5
    
    
    $
    (1,533.1
    )
    
    $
    513.0
 Nine Months Ended September 30, 2006
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    2,529.1
    
    
    $
    1,486.5
    
    
    $
    (172.3
    )
    
    $
    3,843.3Cost of sales
    
    
    
    
    
    
    (0.6
    )
    
    
    0.5
    
    
    
    1,767.3
    
    
    
    1,009.4
    
    
    
    (172.3
    )
    
    
    2,604.3Selling and administrative
expenses
    
    
    7.5
    
    
    
    12.6
    
    
    
    48.4
    
    
    
    385.8
    
    
    
    268.3
    
    
    
    
    
    
    
    722.6Interest expense, net
    
    
    (0.5
    )
    
    
    33.5
    
    
    
    8.9
    
    
    
    
    
    
    
    (3.4
    )
    
    
    
    
    
    
    38.5Equity in earnings of
subsidiaries, net of tax
    
    
    428.2
    
    
    
    (118.3
    )
    
    
    247.7
    
    
    
    69.5
    
    
    
    246.6
    
    
    
    (873.7
    )
    
    
    Intercompany income
(expense)
    
    
    (12.2
    )
    
    
    138.0
    
    
    
    10.8
    
    
    
    (318.3
    )
    
    
    255.2
    
    
    
    (73.5
    )
    
    
    Income (loss) from
continuing operations
before income taxes
    
    
    409.0
    
    
    
    (25.8
    )
    
    
    200.7
    
    
    
    127.2
    
    
    
    714.0
    
    
    
    (947.2
    )
    
    
    477.9Income tax expense
(benefit)
    
    
    
    
    
    
    (21.5
    )
    
    
    (46.0
    )
    
    
    23.6
    
    
    
    166.1
    
    
    
    
    
    
    
    122.2Income (loss) from
continuing operations
    
    
    409.0
    
    
    
    (4.3
    )
    
    
    246.7
    
    
    
    103.6
    
    
    
    547.9
    
    
    
    (947.2
    )
    
    
    355.7Charge related to
discontinued operations,
net of income taxes
    
    
    
    
    
    
    20.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3Net income (loss)
    
    $
    409.0
    
    
    $
    (24.6
    )
    
    $
    246.7
    
    
    $
    103.6
    
    
    $
    547.9
    
    
    $
    (947.2
    )
    
    $
    335.4
 -17-




---



##### Table of Contents



Consolidating Balance Sheets
September 30, 2007
 Cooper
    
    
    CooperIndustries,
    
    
    US,
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    27.2
    
    
    $
    
    
    
    $
    73.4
    
    
    $
    (1.2
    )
    
    $
    208.0
    
    
    $
    
    
    
    $
    307.4Receivables
    
    
    0.1
    
    
    
    
    
    
    
    0.1
    
    
    
    586.5
    
    
    
    530.6
    
    
    
    
    
    
    
    1,117.3Inventories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    360.1
    
    
    
    305.8
    
    
    
    
    
    
    
    665.9Deferred income taxes and
other current assets
    
    
    (0.1
    )
    
    
    122.4
    
    
    
    41.7
    
    
    
    52.5
    
    
    
    45.8
    
    
    
    
    
    
    
    262.3Total current assets
    
    
    27.2
    
    
    
    122.4
    
    
    
    115.2
    
    
    
    997.9
    
    
    
    1,090.2
    
    
    
    
    
    
    
    2,352.9Property, plant and
equipment, less
accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    67.9
    
    
    
    324.0
    
    
    
    309.9
    
    
    
    
    
    
    
    701.8Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,251.4
    
    
    
    1,212.0
    
    
    
    
    
    
    
    2,463.4Investment in subsidiaries
    
    
    4,993.1
    
    
    
    604.6
    
    
    
    4,511.1
    
    
    
    1,275.5
    
    
    
    2,345.1
    
    
    
    (13,729.4
    )
    
    
    Investment in parent
    
    
    
    
    
    
    
    
    
    
    2,872.2
    
    
    
    
    
    
    
    312.7
    
    
    
    (3,184.9
    )
    
    
    Intercompany accounts
receivable
    
    
    
    
    
    
    798.9
    
    
    
    
    
    
    
    1,160.6
    
    
    
    766.9
    
    
    
    (2,726.4
    )
    
    
    Intercompany notes
receivable
    
    
    50.0
    
    
    
    25.8
    
    
    
    1,077.3
    
    
    
    0.8
    
    
    
    4,362.8
    
    
    
    (5,516.7
    )
    
    
    Other noncurrent assets
    
    
    
    
    
    
    13.7
    
    
    
    10.7
    
    
    
    52.2
    
    
    
    173.5
    
    
    
    
    
    
    
    250.1Total assets
    
    $
    5,070.3
    
    
    $
    1,565.4
    
    
    $
    8,654.4
    
    
    $
    5,062.4
    
    
    $
    10,573.1
    
    
    $
    (25,157.4
    )
    
    $
    5,768.2Short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    15.3
    
    
    $
    
    
    
    $
    15.3Accounts payable
    
    
    38.1
    
    
    
    7.4
    
    
    
    16.4
    
    
    
    227.5
    
    
    
    255.4
    
    
    
    
    
    
    
    544.8Accrued liabilities
    
    
    6.0
    
    
    
    41.9
    
    
    
    75.5
    
    
    
    240.5
    
    
    
    181.8
    
    
    
    
    
    
    
    545.7Current discontinued
operations liability
    
    
    
    
    
    
    191.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191.0Current maturities of
long-term debt
    
    
    
    
    
    
    100.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100.0Total current liabilities
    
    
    44.1
    
    
    
    340.3
    
    
    
    91.9
    
    
    
    468.0
    
    
    
    452.5
    
    
    
    
    
    
    
    1,396.8Long-term debt
    
    
    
    
    
    
    277.2
    
    
    
    624.1
    
    
    
    8.0
    
    
    
    0.7
    
    
    
    
    
    
    
    910.0Intercompany accounts
payable
    
    
    16.4
    
    
    
    
    
    
    
    2,708.5
    
    
    
    
    
    
    
    
    
    
    
    (2,724.9
    )
    
    
    Intercompany notes
payable
    
    
    758.6
    
    
    
    685.0
    
    
    
    1,916.3
    
    
    
    1,741.8
    
    
    
    415.0
    
    
    
    (5,516.7
    )
    
    
    Long-term discontinued
operations liability
    
    
    
    
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Other long-term
liabilities
    
    
    
    
    
    
    (92.6
    )
    
    
    169.4
    
    
    
    183.3
    
    
    
    156.8
    
    
    
    
    
    
    
    416.9Total liabilities
    
    
    819.1
    
    
    
    1,539.9
    
    
    
    5,510.2
    
    
    
    2,401.1
    
    
    
    1,025.0
    
    
    
    (8,241.6
    )
    
    
    3,053.7Class 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
    
    
    3,293.0
    
    
    
    
    
    
    
    670.2
    
    
    
    1,445.4
    
    
    
    5,848.2
    
    
    
    (11,137.7
    )
    
    
    119.1Retained earnings
    
    
    923.2
    
    
    
    117.2
    
    
    
    2,586.4
    
    
    
    1,189.1
    
    
    
    3,250.1
    
    
    
    (5,372.0
    )
    
    
    2,694.0Accumulated other non-owner changes in equity
    
    
    31.8
    
    
    
    (91.7
    )
    
    
    (112.4
    )
    
    
    26.8
    
    
    
    (51.3
    )
    
    
    96.4
    
    
    
    (100.4
    )Total shareholders equity
    
    
    4,251.2
    
    
    
    25.5
    
    
    
    3,144.2
    
    
    
    2,661.3
    
    
    
    9,548.1
    
    
    
    (16,915.8
    )
    
    
    2,714.5Total liabilities and
shareholders equity
    
    $
    5,070.3
    
    
    $
    1,565.4
    
    
    $
    8,654.4
    
    
    $
    5,062.4
    
    
    $
    10,573.1
    
    
    $
    (25,157.4
    )
    
    $
    5,768.2
 -18-




---



##### Table of Contents



Consolidating Balance Sheets
December 31, 2006
 Cooper
    
    
    Cooper
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    Industries, LLC
    
    
    US, 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
Nine Months Ended September 30, 2007
 Cooper
    
    
    Cooper
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    Industries, LLC
    
    
    US, Inc.
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used in)
operating activities
    
    $
    (19.7
    )
    
    $
    (61.8
    )
    
    $
    83.5
    
    
    $
    135.1
    
    
    $
    326.2
    
    
    $
    
    
    
    $
    463.3Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (26.5
    )
    
    
    (39.4
    )
    
    
    (25.1
    )
    
    
    
    
    
    
    (91.0
    )Cash paid for acquired businesses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75.0
    )
    
    
    (119.5
    )
    
    
    
    
    
    
    (194.5
    )Investment in affiliates
    
    
    
    
    
    
    
    
    
    
    (45.8
    )
    
    
    (17.1
    )
    
    
    
    
    
    
    62.9
    
    
    
    Loans to affiliates
    
    
    (110.1
    )
    
    
    
    
    
    
    (355.1
    )
    
    
    
    
    
    
    (859.3
    )
    
    
    1,324.5
    
    
    
    Repayments of loans from affiliates
    
    
    151.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    603.5
    
    
    
    (755.3
    )
    
    
    Dividends from affiliates
    
    
    
    
    
    
    
    
    
    
    79.3
    
    
    
    33.8
    
    
    
    6.7
    
    
    
    (119.8
    )
    
    
    Proceeds from sale of property,
plant and equipment and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    
    
    
    
    0.8Net cash provided by (used in)
investing activities
    
    
    41.7
    
    
    
    
    
    
    
    (348.1
    )
    
    
    (97.3
    )
    
    
    (393.3
    )
    
    
    512.3
    
    
    
    (284.7
    )Cash flows from financing
activities:Proceeds from issuance of debt
    
    
    
    
    
    
    
    
    
    
    300.0
    
    
    
    
    
    
    
    6.7
    
    
    
    
    
    
    
    306.7Debt issue costs
    
    
    
    
    
    
    
    
    
    
    (2.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.7
    )Proceeds from debt derivatives
    
    
    
    
    
    
    
    
    
    
    10.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.0Repayments of debt
    
    
    
    
    
    
    (300.0
    )
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    
    
    
    
    (303.0
    )Borrowings from affiliates
    
    
    622.7
    
    
    
    354.2
    
    
    
    347.6
    
    
    
    
    
    
    
    
    
    
    
    (1,324.5
    )
    
    
    Repayments of loans to affiliates
    
    
    (416.4
    )
    
    
    
    
    
    
    (337.2
    )
    
    
    
    
    
    
    (1.7
    )
    
    
    755.3
    
    
    
    Other intercompany financing
activities
    
    
    182.5
    
    
    
    7.6
    
    
    
    (177.0
    )
    
    
    (36.2
    )
    
    
    23.1
    
    
    
    
    
    
    
    Dividends
    
    
    (116.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (116.2
    )Dividends paid to affiliates
    
    
    (86.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33.8
    )
    
    
    119.8
    
    
    
    Purchase of common shares
    
    
    (192.9
    )
    
    
    
    
    
    
    (81.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (274.8
    )Excess tax benefits from stock
options and awards
    
    
    
    
    
    
    
    
    
    
    19.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.6Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62.9
    
    
    
    (62.9
    )
    
    
    Employee stock plan activity and
other
    
    
    
    
    
    
    
    
    
    
    54.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.7Net cash provided by (used in)
financing activities
    
    
    (6.3
    )
    
    
    61.8
    
    
    
    133.1
    
    
    
    (36.2
    )
    
    
    54.2
    
    
    
    (512.3
    )
    
    
    (305.7
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.0
    
    
    
    
    
    
    
    11.0Increase (decrease) in cash and cash
equivalents
    
    
    15.7
    
    
    
    
    
    
    
    (131.5
    )
    
    
    1.6
    
    
    
    (1.9
    )
    
    
    
    
    
    
    (116.1
    )Cash and cash equivalents,
beginning of period
    
    
    11.5
    
    
    
    
    
    
    
    204.9
    
    
    
    (2.8
    )
    
    
    209.9
    
    
    
    
    
    
    
    423.5Cash and cash equivalents, end of
period
    
    $
    27.2
    
    
    $
    
    
    
    $
    73.4
    
    
    $
    (1.2
    )
    
    $
    208.0
    
    
    $
    
    
    
    $
    307.4
 -20-




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##### Table of Contents



Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2006
 CooperIndustries,
    
    
    Cooper
    
    
    
    
    
    
    Other
    
    
    ConsolidatingCooper
    
    
    LLC
    
    
    US, Inc
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    TotalNet cash provided by (used
in) operating activities
    
    $
    (15.8
    )
    
    $
    (20.8
    )
    
    $
    45.7
    
    
    $
    (23.4
    )
    
    $
    389.0
    
    
    $
    
    
    
    $
    374.7Cash flows from investing
activities:Capital expenditures
    
    
    
    
    
    
    
    
    
    
    (10.5
    )
    
    
    (24.6
    )
    
    
    (23.0
    )
    
    
    
    
    
    
    (58.1
    )Cash paid for acquired
businesses
    
    
    
    
    
    
    
    
    
    
    (42.4
    )
    
    
    (230.8
    )
    
    
    (6.2
    )
    
    
    
    
    
    
    (279.4
    )Investment in affiliates
    
    
    (12.3
    )
    
    
    
    
    
    
    (36.0
    )
    
    
    
    
    
    
    
    
    
    
    48.3
    
    
    
    Loans to affiliates
    
    
    (102.0
    )
    
    
    
    
    
    
    (36.9
    )
    
    
    
    
    
    
    (384.4
    )
    
    
    523.3
    
    
    
    Repayments of loans from
affiliates
    
    
    64.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101.2
    
    
    
    (165.2
    )
    
    
    Dividends from affiliates
    
    
    5.0
    
    
    
    
    
    
    
    68.6
    
    
    
    
    
    
    
    5.9
    
    
    
    (79.5
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    17.6
    
    
    
    
    
    
    
    18.4Net cash
provided by
    
    
    (45.3
    )
    
    
    
    
    
    
    (57.2
    )
    
    
    (254.6
    )
    
    
    (288.9
    )
    
    
    326.9
    
    
    
    (319.1
    )(used
in) investing activitiesCash flows from financing
activities:Repayments of debt
    
    
    
    
    
    
    (11.0
    )
    
    
    
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    (13.3
    )Borrowings from affiliates
    
    
    197.2
    
    
    
    36.8
    
    
    
    289.2
    
    
    
    
    
    
    
    0.1
    
    
    
    (523.3
    )
    
    
    Repayments of loans to
affiliates
    
    
    (47.3
    )
    
    
    
    
    
    
    (73.6
    )
    
    
    (2.4
    )
    
    
    (41.9
    )
    
    
    165.2
    
    
    
    Other intercompany
financing activities
    
    
    9.5
    
    
    
    (5.0
    )
    
    
    (112.9
    )
    
    
    281.6
    
    
    
    (173.2
    )
    
    
    
    
    
    
    Dividends
    
    
    (103.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (103.0
    )Dividends paid to affiliates
    
    
    (73.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6.0
    )
    
    
    79.5
    
    
    
    Subsidiary purchase of
parent shares
    
    
    14.9
    
    
    
    
    
    
    
    (276.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (261.7
    )Issuance of stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48.3
    
    
    
    (48.3
    )
    
    
    Excess tax benefits from
stock options and awards
    
    
    
    
    
    
    
    
    
    
    21.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.4Employee stock plan
activity and other
    
    
    
    
    
    
    
    
    
    
    81.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81.1Net cash provided by (used
in) financing activities
    
    
    (2.2
    )
    
    
    20.8
    
    
    
    (71.4
    )
    
    
    279.2
    
    
    
    (175.0
    )
    
    
    (326.9
    )
    
    
    (275.5
    )Effect of exchange rate
changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.0
    
    
    
    
    
    
    
    11.0Increase (decrease) in cash
and cash equivalents
    
    
    (63.3
    )
    
    
    
    
    
    
    (82.9
    )
    
    
    1.2
    
    
    
    (63.9
    )
    
    
    
    
    
    
    (208.9
    )Cash and cash equivalents,
beginning of period
    
    
    64.1
    
    
    
    
    
    
    
    144.4
    
    
    
    (3.5
    )
    
    
    247.8
    
    
    
    
    
    
    
    452.8Cash and cash equivalents,
end of period
    
    $
    0.8
    
    
    $
    
    
    
    $
    61.5
    
    
    $
    (2.3
    )
    
    $
    183.9
    
    
    $
    
    
    
    $
    243.9
 -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 September 30, 2007 Compared With Three Months Ended September 30, 2006
  Revenues:
    Costs and Expenses:
     -22-




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##### Table of Contents



Operating Earnings:
    Income Taxes:
  Nine Months Ended September 30, 2007 Compared With Nine Months Ended September 30, 2006
  -23-




---



##### Table of Contents



Revenues:
    Costs and Expenses:
        -24-




---



##### Table of Contents



Operating Earnings:
    Income Taxes:
  Charge Related to Discontinued Operations:
  Liquidity and Capital Resources
 Liquidity
  -25-




---



##### Table of Contents



Capital Resources:
      -26-




---



##### Table of Contents



Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
  Backlog
  September 30,2007
    
    
    2006(in millions)Electrical Products
    
    $
    640.7
    
    
    $
    593.4Tools
    
    
    79.4
    
    
    
    75.5$
    720.1
    
    
    $
    668.9
 Recently Issued Accounting Standards
  Private Securities Litigation Reform Act Safe Harbor Statement
  -27-




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##### Table of Contents



Item 4. Controls and Procedures
   -28-




---



##### Table of Contents



PART II  OTHER INFORMATION
 
       -29-




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##### Table of Contents



-30-




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##### Table of Contents



-31-




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##### Table of Contents



Purchases of Equity Securities
 Total Number of
    
    Maximum Number ofShares Purchased as
    
    Shares that May YetPart of Publicly
    
    Be Purchased UnderAnnounced Plans or
    
    the Plans orTotal Number of
    
    Average Price Paid
    
    Programs
    
    ProgramsPeriod
    
    Shares Purchased
    
    per Share
    
    (1)
    
    (1)As of 6/30/07
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,648,5007/01/07  7/31/07
    
    
    280,000
    
    
    $
    56.59
    
    
    
    280,000
    
    
    
    9,368,5008/01/07  8/31/07
    
    
    3,170,713
    
    
    $
    49.79
    
    
    
    3,170,713
    
    
    
    6,197,7879/01/07  9/30/07
    
    
    536,100
    
    
    $
    50.36
    
    
    
    536,100
    
    
    
    5,661,687Total
    
    
    3,986,813
    
    
    $
    50.34
    
    
    
    3,986,813
 
 (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. 
   -32-




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##### Table of Contents



12.
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2002 through 2006
and the Nine Months Ended September 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.
 
   Cooper Industries, Ltd.(Registrant)Date: October 29, 2007
    /s/ Terry A. KlebeTerry A. KlebeSenior Vice President and
Chief Financial OfficerDate: October 29, 2007
    /s/ Jeffrey B. LevosJeffrey B. LevosVice President, Finance and
Chief Accounting Officer -33-




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##### Table of Contents



12.
    
    Computation of Ratios of Earnings to Fixed Charges for the Calendar Years 2002 through 2006
and the Nine Months Ended September 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.