COOPER B-LINE – Access Cabinets, B-Line, Cent-R-Rail, Dura-Cooper, Dura-Green, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss, Bussmann, Coiltronics, Cubefuse, Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum, Mercury, Optima, Polysurg, PowerStor, TransX, COOPER CROUSE-HINDS – Arktite, Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H, MEDC, Mini-Line, Myers, NexT, Nortem, Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond, Erem, H.K. Porter, Kahnetics, Lufkin, Metromex, Nicholson, Plumb, Weller, Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison, Emerald, Fail-Safe, Halo, Invue, Iris, Lumark, Lumiere, McGraw-Edison, Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Cooper Fire, Crompton, Fulleon, JSB, Luminox, MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock, COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Technologies, Cybectec, Cooper Power Systems, Edison, ELF, EMSA, Envirotemp, EnviroTran, EnviroVR, FR3, Kearney, Kyle, NOVA, MagneX, McGraw-Edison, NX, NX Companion, Storm Trapper, UltraSIL, VariStar, VariGap, X Limiter, COOPER POWER TOOLS – Airetool, Apex, Cleco, Automated Systems, DGD, Dotco, Gardner-Denver*, MasterPower, Quakenbush, Recoules, Rotor Tool, Utica, COOPER WIRING DEVICES – Aspire, Aspire RF, Cooper Wiring Devices, Hart-Lock, Media Sync, Mobile X-Ray, Novitas, Power-Lock, Royer, Shock Sentry, Siena, SurgBloc, AutoGrip, Safety Grip, Microset, Antares, Cooper Sedna, Screw-Catch, Eagle, Arrow-Hart, WeatherBox, G-Tool, Quickeze, Super Plug, COOPER B-LINE – Access Cabinets, B-Line, Cent-R-Rail, Dura-Cooper, Dura-Green, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss, Bussmann, Coiltronics, Cubefuse, Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum, Mercury, Optima, Polysurg, PowerStor, TransX, COOPER CROUSE-HINDS – Arktite, Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H, MEDC, Mini-Line, Myers, NexT, Nortem, Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond, Erem, H.K. Porter, Kahnetics, Lufkin, Metromex, Nicholson, Plumb, Weller, Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison, Emerald, Fail-Safe, Halo, Invue, Iris, Lumark, Lumiere, McGraw-Edison, Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Cooper Fire, Crompton, Fulleon, JSB, Luminox, MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock, COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Technologies, Cybectec, Cooper Power Systems, Edison, ELF, EMSA, Envirotemp, EnviroTran, EnviroVR, FR3, Kearney, Kyle, NOVA, MagneX, McGraw-Edison, NX, NX Companion, Storm Trapper, UltraSIL, VariStar, VariGap, X Limiter, COOPER POWER TOOLS – Airetool, Apex, Cleco, Automated Systems, DGD, Dotco, Gardner-Denver*, MasterPower, Quakenbush, Recoules, Rotor Tool, Utica, COOPER WIRING DEVICES – Aspire, Aspire RF, Cooper Wiring Devices, Hart-Lock, Media Sync, Mobile X-Ray, Novitas, Power-Lock, Royer, Shock Sentry, Siena, SurgBloc, AutoGrip, Safety Grip, Microset, Antares, Cooper Sedna, Screw-Catch, Eagle, Arrow-Hart, WeatherBox, G-Tool, Quickeze, Super Plug, COOPER B-LINE – Access Cabinets, B-Line, Cent-R-Rail, Dura-Cooper, DuraGreen, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss, Bussmann, Coiltronics, Cubefuse, Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum, Mercury, Optima, Polysurg, PowerStor, TransX, COOPER CROUSE-HINDS – Arktite, Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H, MEDC, Mini-Line, Myers, NexT, Nortem, Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond, Erem, H.K. Porter, Kahnetics, Lufkin, Metromex, Nicholson, Plumb, Weller, Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison, Emerald, Fail-Safe, Halo, Invue, Iris, Lumark, Lumiere, McGraw-Edison, Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Cooper Fire, Crompton, Fulleon, JSB, Luminox, MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock, COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Cooper Industries, Ltd. 2006 Annual Report REVENUES RETURN ON SALES (1) (in billions) (% of revenue) FREE CASH FLOW AND CONTINUING INCOME DILUTED EARNINGS PER SHARE (1) (in millions) FCF $5 10% Income $550 $5.50 4 8 440 4.40 3 6 330 3.30 2 4 220 2.20 1 2 110 1.10 0 (1) 0 0 02 03 04 05 06 02 03 04 05 06 0 02 03 04 05 06 02 03 04 05 06 From continuing operations before restructuring and unusual items. Consistent TABLE OF CONTENTS Letter to Shareholders Business Portfolio A Focus on Customers Serving Critical Industries Markets Served 1 4 10 11 Foldout Invigorating the Products 12 Acquisition Highlights 13 Financial Review 14 Report of Management 20 Directors and Management 22 Form 10-K 23 Shareholder Information Inside Back Cover To Our Shareholders, >c'%%+!djg(&!%%%ZbeadnZZhVgdjcYi]ZldgaYVX]^ZkZYVcZl]^\]lViZgbVg` Wn\ZcZgVi^c\i]Zhigdc\ZhigZhjaih^cdjg8dbeVcnÉh&,("nZVg]^hidgn#I]ZYZY^XVi^dc! iVaZciVcY]VgYldg`d[ZkZgndcZldg`^c\[dg8ddeZg>cYjhig^ZhegdeZaaZYjhiddjg gZXdgYnZVg/ GZkZcjZh^cXgZVhZY&%idVgZXdgY*#'W^aa^dc# ¼ 8dci^cj^c\ZVgc^c\h^cXgZVhZY')idVgZXdgY)-)b^aa^dc# ¼ :Vgc^c\heZgh]VgZ[gdbXdci^cj^c\deZgVi^dch^cXgZVhZY'*idVgZXdgY*#&+# ¼ ;gZZXVh]Ódl[gdbdeZgVi^dchlVh*(*b^aa^dcÄi]ZÒghii^bZ8ddeZg]VhWgd`Zci]Z ¼ *%%b^aa^dcbVg`^c[gZZXVh]ÓdlVcYi]Zh^mi]XdchZXji^kZnZVg[gZZXVh]Ódl]Vh ZmXZZYZYZVgc^c\h#GZijgcdc^ckZhiZYXVe^iVagZVX]ZY&(#*kZghjh&%#-^ci]Zeg^dgnZVg# CZiYZWi"id"idiVa"XVe^iVaZcYZYVi&.#&# :aZXig^XVabVg\^ch\gZlid&*#.!je&#(ed^cih!VcYIddahbVg\^chgdhZ'#'ed^cihid&&#(# ¼ ;djgVXfj^h^i^dchZmeVcYZYdjg\adWVagZVX]!egdk^YZYjhl^i]VYY^i^dcVaiZX]cdad\^Zh ¼ VcYWgdVYZcZYdjgXjhidbZgWVhZ# Growth H]VgZ]daYZghd[djg8dbeVcnhVlVidiVagZijgcdc8ddeZghidX`d['+^c'%%+#I]^hWg^c\h djgi]gZZ"nZVgVcYÒkZ"nZVgXdbedjcYVccjVaidiVagZijgchid&-VcY')!gZheZXi^kZan# >cVYY^i^dc!^ca^\]id[djg'%%+gZhjaihVcYXdbb^ibZciid^cXgZVhZh]VgZ]daYZgkVajZ!lZ VccdjcXZYdc;ZWgjVgn&)!'%%,Vild"[dg"dcZhidX`hea^iVcY&)^cXgZVhZ^ci]ZY^k^YZcY# Edgi[da^dHigZc\i] >c'%%+!djg8dbeVcnWZcZÒiZY[gdb]Vk^c\VWgdVY!Y^kZghZVcY\adWVaZcYbVg`Zi ZmedhjgZ#Djg^cYjhig^VaVcYji^a^inbVg`Zihh]dlZYh^\c^ÒXVcibdbZcijb!l]^X]h]djaY Xdci^cjZ^cid'%%,#Cdc"gZh^YZci^VaXdchigjXi^dcd[ÒXZ!]ZVai]XVgZ!^cYjhig^Va!adY\^c\ \V^cZYbdbZcijbdkZgi]ZeVhinZVg!VcYl^i]adlZgXdchigjXi^dcXdhih!adlZg^ciZgZhigViZh VcY^begdk^c\gZci$kVXVcXngViZh!lZZmeZXiidhZZXdci^cjZY\gdli]^c'%%,#GZh^YZci^Va bVg`ZihYZXa^cZYYjg^c\i]ZhZXdcY]Va[d['%%+YjZidi]Zadc\"Vci^X^eViZYXnXa^XVahd[iZc^c\ d[i]Z]djh^c\bVg`Zi#L]Zci]ZXnXaZijgchjelVgY!lZl^aaWZlZaaedh^i^dcZYidiV`Z VYkVciV\Zd[i]ZgZcZlZY\gdli]^cgZh^YZci^VaXdchigjXi^dc# Djg^ckZhibZci^c^ciZgcVi^dcVa\gdli]Xdcig^WjiZYh^\c^ÒXVcianiddjggZhjaih^c'%%+# ;dgi]ZnZVg!hVaZh^cXdjcig^Zhdjih^YZi]ZJ#H#VcYlZhiZgc:jgdeZ\gZlWnbdgZi]Vc'% iddkZg,*%b^aa^dc#I]^hhigZc\i]lVhWgdVYWVhZY!l^i]8]^cV!i]ZB^YYaZ:Vhi!BZm^Xd VcYHdji]6bZg^XVjedkZg(%# Cooper Industries, Ltd. | 1 8ddeZgÉhDeZgVi^c\BdYZa Djg'%%+gZhjaihlZgZVX]^ZkZYWni]ZXddgY^cViZYZ[[dgih VccjVagZkZcjZh[gdbegdYjXih^cigdYjXZYl^i]^ci]ZeVhi d[djg(&!%%%ZbeadnZZh[dXjh^c\dci]Zg^\]iWjh^cZhh i]gZZnZVgh#LZVgZ[dXjh^c\dcZmeVcY^c\iZX]cdad\n ^c^i^Vi^kZhVcYYg^k^c\VXaZVgVcYlZaa"Xdbbjc^XViZY eaVi[dgbh^cZkZgnWjh^cZhh#>ciZgcVaYZkZadebZciVcY higViZ\n^cVcZi]^XVaVcYjcXdbegdb^h^c\bVccZg# VXfj^h^i^dchZcVWaZjhidbV`ZÆYjbWÇegdYjXihÆhbVgiÇ! 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ZVh^ZgidYdWjh^cZhhl^i]!bdgZ\adWVaVcYbdgZiZX]c^XVa l^i]WZiiZgbVg\^chegdYjX^c\\gZVi!Y^kZghZaZVYZgh]^e^c Vaa[jcXi^dcVaVgZVh# Add`^c\6]ZVY L^i]i]ZhjXXZhhd['%%+[gZh]^cdjgb^cYhVcYdjg 8dbeVcn^c^ihhigdc\ZhiÒcVcX^Vaedh^i^dcZkZg!lZVgZ add`^c\[dglVgYid'%%,#DkZgVaa!djgZcYbVg`ZihVgZ \gdl^c\#LZVgZÒcY^c\cZlXjhidbZghVgdjcYi]ZldgaY ZkZgnYVnVcYWg^c\^c\i]ZbcZl^YZVhVcYhdaji^dch# 37% 24% 20% 15% 4% Industrial Commercial Utility Residential Other DjgWVaVcXZh]ZZi\^kZhjhi]ZÓZm^W^a^inidXdci^cjZid ^ckZhi^cdjg^c[gVhigjXijgZ!\adWVa[ddieg^ci!^ccdkVi^dc! SALES BY REGION hnhiZbhVcYeZdeaZ#LZVahd]VkZVlZaa"YZÒcZY!lZaa" (% of revenue) Y^hX^ea^cZYVXfj^h^i^dchigViZ\ni]ViXdbeaZbZcihVcY higZc\i]ZchdjgXdgZWjh^cZhh# LZldjaYa^`Zidi]Vc`djgadnVaXjhidbZgh!hjeea^Zgh! Y^gZXidghVcYZbeadnZZh[dgi]Z^ghjeedgiVcYYZY^XVi^dc# LZVgZeVgi^XjaVganegdjYd[djgiVaZciZYVcYYZY^XViZY ZbeadnZZh#I]gdj\]i]Z^g^cY^k^YjVaVcYXdaaZXi^kZZ[[dgih! i]Zn]VkZh]dlc]dlVcdg\Vc^oVi^dcl^i]hjX]VY^hi^cXi^kZ ]^hidgnXVcZkdakZ^cidVYncVb^XVcYXdbeZi^i^kZ\adWVa Wjh^cZhh#L]^aZlZ]VkZZc_dnZYgZXZcihjXXZhh!lZ`cdl i]Vi\gZViXdbeVc^ZhVgZWj^ai[gdbhigdc\kVajZhVcYg^\dgdjh egdXZhhZh!VcYVgZYZÒcZYWni]Z^gadc\"iZgbhjXXZhhdkZgVaa 67% U.S. 16% Europe, Middle East and Africa 7% Latin America 5% Canada 5% Asia Pacific ZXdcdb^XXnXaZh#DjgV^b^h[dg8ddeZg>cYjhig^ZhidbZZi i]VibZVhjgZd[hjXXZhh# SALES BY CHANNEL (% of revenue) @^g`H#=VX]^\^Vc 8]V^gbVc!EgZh^YZci8:D 54% 18% 16% 12% Distribution Utility OEM/Direct Retail Cooper Industries, Ltd. | 3 1. ELECTRICAL PRODUCTS 8ddeZgÉh:aZXig^XVaEgdYjXihhZ\bZcibVcj[VXijgZh a^\]i^c\[^mijgZh!]Vgh]"VcY]VoVgYdjh"Yjin[^ii^c\h! SEGMENT REVENUES SEGMENT OPERATING EARNINGS (1) (in billions) (in millions) (1) heZX^VainXdccZXidgh!hjeedgihnhiZbh!ZcXadhjgZh! l^g^c\YZk^XZh![jhZh!eaj\h!gZXZeiVXaZhVcYhV[Zin VcYhZXjg^inegdYjXih[dgjhZ^c^cYjhig^Va!XdbbZg" Before restructuring charges. $4.5 $700 3.6 560 2.7 420 1.8 280 .9 140 X^VaVcYgZh^YZci^VaVeea^XVi^dch#I]ZhZ\bZciVahd egdk^YZhY^hig^Wji^dchl^iX]\ZVgVcYigVch[dgbZgh! ZcZg\nVjidbVi^dchdaji^dchVcYdi]ZggZaViZYedlZg hnhiZbXdbedcZcih[dgjhZWnji^a^i^ZhVcYi]ZZaZX" ig^XVaedlZgigVchb^hh^dcVcYY^hig^Wji^dc^cYjhig^Zh# 0 0 02 03 04 05 06 02 03 04 05 Our Business Portfolio 8ddeZgÉhgZhjaihVgZYg^kZcWn^ihldgaY"XaVhhedgi[da^dd[Wjh^cZhhZh!l]^X]^h dg\Vc^oZY^cidildhZ\bZcih/:aZXig^XVaEgdYjXihVcYIddah#L^i]^ci]ZhZild hZ\bZcihVgZide"i^ZgWjh^cZhhZhi]VibV^ciV^cVc^ciZchZ[dXjhdci]ZXjhidbZg VXgdhhVY^kZghZhZid[ZcYbVg`Zih#8ddeZg]VhjceVgVaaZaZYegdYjXi"a^cZWgZVYi] VcYlZaa"ZhiVWa^h]ZYgZejiVWaZWgVcYh!bVcnd[l]^X]VgZhdaYid\Zi]Zgi]gdj\]V XdbbdchVaZhVcYbVg`Zi^c\bdYZa!8ddeZg8dccZXi^dc#Djghigdc\bVg`Zih]VgZ ^cViigVXi^kZ\adWVabVg`ZihVcYY^kZghZeaVi[dgbhegdk^YZhVÒgb[djcYVi^dcid Wj^aYjedc[dg[jijgZ\gdli]# 4 | Cooper Industries, Ltd. 06 ELECTRICAL PRODUCTS 8ddeZg7"A^cZ™bVcj[VXijgZhi]ZaZVY^c\WgVcYd[XVWaZ 8ddeZg7jhhbVcc™^hVaZVY^c\bVcj[VXijgZgd[ZaZXig^XVa igVnVcYWdaiZY[gVb^c\egdYjXih^ci]ZJc^iZYHiViZh# VcYZaZXigdc^XegdYjXih!^cXajY^c\[jhZh!X^gXj^iWgZV`Zgh! 8ddeZg7"A^cZhZgkZhi]ZXdchigjXi^dcbVg`Zi!VhlZaaVh [jhZ\ZVg!edlZgY^hig^Wji^dcegdYjXih!hjg\ZegdiZXidgh! i]ZiZaZXdbbjc^XVi^dch^cYjhign#I]ZY^kZghZegdYjXia^cZ ^cYjXidghVcYl^gZbVcV\ZbZcihnhiZbh#I]ZY^k^h^dcÉh Vahd^cXajYZhZaZXig^XVaVcYXdbbjc^XVi^dchZcXadhjgZh! \adWVabVcj[VXijg^c\VcYY^hig^Wji^dccZildg`hZgk^XZhi]Z bZiZgbdjci^c\!gVX`VcYgjclVn!heg^c\hiZZa[VhiZcZgh ZaZXig^XVa!ZaZXigdc^XVcYigVchedgiVi^dcbVg`Zih!bZZi^c\ VcYe^eZ]Vc\Zgh#8ddeZg7"A^cZYZkZadeh]^\]"fjVa^in!Xdhi" i]ZcZZYhd[XdbbZgX^Va!^cYjhig^VaVcYgZh^YZci^VajhZgh# Z[[ZXi^kZVcYaVWdg"hVk^c\egdYjXihidbZZiXjhidbZgcZZYh I]gdj\]gZXZciVXfj^h^i^dch^c@dgZVVcY8]^cV!8ddeZg VcYXVcWZ[djcYYdbZhi^XVaanVcY^ciZgcVi^dcVaan[dgjhZ^c 7jhhbVcc^hlZaaedh^i^dcZYidhjeedgiVcY\gdl^ih XdbbZgX^Va!^cYjhig^Va!ji^a^inVcYgZh^YZci^VaVeea^XVi^dch# \Zd\gVe]^XVaanY^kZghZXjhidbZgWVhZ# HIGHLIGHTS HIGHLIGHTS ¼ >beaZbZciZYhnhiZbVcYegdXZhh^begdkZbZcihi]gdj\] :meVcYZY\adWVaani]gdj\]i]ZVXfj^h^i^dcd[M^Vc! ¼ 8ddeZgÉh:ciZgeg^hZ7jh^cZhhHnhiZbVcYBKEiddah id[jgi]Zg^begdkZ8ddeZg7"A^cZÉh^cYjhign"aZVY^c\ hZgk^XZaZkZah# ¼ i]ZaVg\Zhi[jhZbVcj[VXijgZg^c8]^cV# CVbZYVEaVci:c\^cZZg^c\EgdYjXid[i]ZNZVg ¼ d[ilVgZ!l]^X]VaadlhXjhidbZgh ;^cVa^hi[dgDH86G®H AVjcX]ZYVWgdVYgVc\Zd[cZlaVWdg"hVk^c\egdYjXih! idYZiZgb^cZi]Zh]dgi"X^gXj^iXjggZcigVi^c\[dgi]Z^g ^cXajY^c\i]Z;a^e8a^e l^gZbZh]XVWaZigVnhnhiZb eVcZahVcYWdmZh# ™ hjeedgi!i]Z@l^`L^gZ™bjai^"ejgedhZ]Vc\^c\hnhiZb VcYVc^ccdkVi^kZbZiZghdX`ZiVYVeiZg# ¼ E^adiZYWgZV`i]gdj\]iZX]cdad\nVihZkZgVa;dgijcZ*%% ¼ ^cYjhig^VaXdbeVc^Zhi]ViXdbW^cZhl^gZaZhhXdbbjc^XV" 6\\gZhh^kZanZmeVcYZYi]ZXdbeVcnÉhedh^i^dc^cheg^c\ i^dcl^i][jhZYZiZXi^dcidZc]VcXZegdYjXi^k^in^cbVcj" hiZZa[VhiZcZghi]gdj\]bjai^eaZcZlegdYjXih!i]Z;VhiZcZg ;dXjh \gdli]egd\gVbVcY^ciZgcVi^dcVaZmeVch^dc# [VXijg^c\[VX^a^i^ZhWngZYjX^c\Ydlci^bZ# ™ ¼ LdchdaZ"hdjgXZegdk^YZghiVijhdchZkZgVabV_dgigVchedg" ¼ 6X]^ZkZYbV_dgegd_ZXil^chl^i]\adWVaXjhidbZgh iVi^dcegd_ZXih!aZkZgV\^c\i]Z+%"edh^i^dcGIBGedlZg ^ci]ZZcZg\n!W^diZX]cdad\n!VZgdheVXZ!]ZVai]VcY Y^hig^Wji^dcbdYjaZ!i]ZIneZ'b^c^X^gXj^iWgZV`ZgVcY bZiVah^cYjhig^Zh# i]ZcZlAB<hZg^Zh("VcY*"edh^i^dc[jhZ]daYZg# Cooper Industries, Ltd. | 5 8ddeZg8gdjhZ"=^cYh™^hVY^kZgh^ÒZYldgaYl^YZbVcj[VX" ^hVc^cYjhign"aZVY^c\bVcj[VXijgZgd[ 8ddeZgA^\]i^c\® ijgZgd[ZaZXig^XVaegdYjXihl^i]VeVgi^XjaVg[dXjhdc]Vgh] ]^\]"fjVa^in!^ccdkVi^kZa^\]i^c\hdaji^dch[dgXdbbZgX^Va! 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HigZZildg`h™VcY Ajb^gZ® >cVYY^i^dc!8ddeZg8gdjhZ"=^cYh^hVaZVYZg^cV^gÒZaY 6bZig^m™# I]ZY^k^h^dcÉhZcZg\n"Z[ÒX^Zcia^\]i^c\iZX]cdad" a^\]i^c\VcYheZX^Va^oZYXdccZXi^k^inhdaji^dch# \^ZhWg^c\VYYZYkVajZidXjhidbZghWngZYjX^c\ZcZg\n Xdchjbei^dcVcYVYYgZhh^c\Zck^gdcbZciVaXdcXZgch# HIGHLIGHTS ¼ HigZc\i]ZcZYedgi[da^d^ci]ZHeZX^Vain8dccZXidg HIGHLIGHTS AVjcX]ZYVcZmiZch^kZVggVnd[cZlegdYjXih!bdhicdiVWan ¼ Wjh^cZhhl^i]i]ZVXfj^h^i^dcd[<=IZX]cdad\^Zh# ¼ ¼ Edh^i^dcZYbVg`Zi^c\iZVbh^chigViZ\^X\adWVabVg`Zih VgdjcYZcZg\nhVk^c\hVcY]^\]"ZcYheZX^ÒXVi^dcbVg`Zih# GZXZ^kZYhigdc\cVi^dcVaWgVcY"gZXd\c^i^dcVlVgYhdc ¼ id[dhiZgXadhZXjhidbZg^ciZgVXi^dcVcYVXXZaZgViZY =VadGZXZhhZYA^\]i^c\Ä'%%+cjbWZgdcZ7gVcYAZVYZg \gdli]^ciVg\ZiZYgZ\^dch# ^c7j^aYZgBV\Vo^cZ# >cigdYjXZYVWgdVYgVc\Zd[egdYjXihYZh^\cZYid ;dXjhZYhdaji^dc"hZaa^c\higViZ\nbdgZi]VcYdjWaZY\gdli] ¼ YZa^kZgXjhidbZgkVajZi]gdj\]gZYjXZY^chiVaaVi^dc XdhiVcYadlZgZcZg\nXdchjbei^dc# ¼ 8dci^cjZYidWj^aY8dbbZgX^VaEgdYjXihWjh^cZhh i]gdj\]8ddeZg8dccZXi^dc!aVjcX]^c\cjbZgdjhcZl egdYjXihhjX]VhY^Z"XVhiÒii^c\hVcYlZVi]Zgegdd[ WdmZhVcYXdkZgh# 6 | Cooper Industries, Ltd. i]gdj\]`Zn\adWVaXjhidbZgl^ch# <gZl^ciZgcVi^dcVaegZhZcXZVhVgZhjaid[ZmeVcYZYbVg`Zi ¼ eZcZigVi^dc^c8]^cV!i]ZB^YYaZ:VhiVcYAVi^c6bZg^XV# ELECTRICAL PRODUCTS 8ddeZgL^g^c\9Zk^XZh® ^hVaZVY^c\bVcj[VXijgZgd[ZaZXig^XVa 8ddeZgBZck^Zg™heZX^Va^oZh^cegdYjXihYZh^\cZYidhVkZ XdccZXi^dcVcYXdcigdaegdYjXih[dggZh^YZci^Va!XdbbZgX^Va a^kZhVcYegdiZXiegdeZgin^cXdbbZgX^Va!^cYjhig^VaVcY VcY^cYjhig^VaXdchigjXi^dcVcYgZcdkVi^dc#I]ZY^k^h^dcÉh gZh^YZci^VaWj^aY^c\h#I]ZY^k^h^dcÉhhiViZ"d["i]Z"Vgi[^gZ egdYjXih^cXajYZhl^iX]Zh!gZXZeiVXaZh!<;8>h!lVaaeaViZh! 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H^ZcV® a^\]i^c\!8ddeZgBZck^Zgd[[ZghidYVnÉhYZbVcY^c\ VcY8ddeZgL^g^c\9Zk^XZh# =Vgi"AdX`® XjhidbZghVl^YZgVc\Zd[egZb^jb"fjVa^inhdaji^dch# HIGHLIGHTS HIGHLIGHTS ™ ¼ >ciZ\gViZYi]ZCdk^iVhVXfj^h^i^dc!ZmXZZY^c\iVg\Zih[dg :meVcYZY^cidCdgi]6bZg^XVl^i]i]ZVXfj^h^i^dc ¼ hVaZh!bVg`ZieZcZigVi^dcVcYegdÒiVW^a^in# ¼ ¼ AVjcX]ZYi]ZcZmi\ZcZgVi^dcd[<;8>gZXZeiVXaZh!^cXajY" d[L]ZZadX`# BV_dg\adWVaegd_ZXil^ch^cXajY^c\ZbZg\ZcXna^\]i^c\[dg ¼ ^c\Vc^ccdkVi^kZhV[Zin[ZVijgZi]ViYZc^ZhedlZgidi]Z i]ZLViZg8jWZVfjVi^XDanbe^Xh^iZ7Z^_^c\'%%-!i]Z jhZg^ci]ZZkZcid[V[V^ajgZidi]ZegdiZXi^dcX^gXj^ign# 9jWV^V^gedgiVcYi]Z7jg_9jWV^ldgaYÉhiVaaZhiWj^aY^c\! ZbZg\ZcXna^\]i^c\Vi:b^gViZhHiVY^jb^cAdcYdcVcY 6X]^ZkZYhigdc\\gdli]^ci]Z8VcVY^VcbVg`Zil^i] a^\]i^c\hdaji^dch[dgHi#EVcXgZVhHiVi^dc!AdcYdc# i]ZXdckZgh^dcd[VaVg\ZgZiV^aXjhidbZgVcY^cXgZVhZY eZcZigVi^dc^ci]Zegd[Zhh^dcVabVg`Zi# ¼ adl"edlZgXdchjbei^dcZbZg\ZcXna^\]i# >cigdYjXZYi]Z^gÒghieVeZgaZhhdgYZgZcignhnhiZb^c XjhidbZghZgk^XZ!gZYjX^c\ZggdghVcY[jgi]Zg^begdk^c\ i]ZXjhidbZgÉhdgYZgXnXaZi^bZ# ¼ AVjcX]d[i]Z=dbZa^c`>cigjYZgVaVgbVcYEaVcZiZ ¼ ;jgi]ZgZmeVch^dc^cZVhiZgc:jgdeZidgdjcYdjidkZgVaa ¼ :jgdeZVcbVg`ZiegZhZcXZ# EZcZigViZY^ciZgcVi^dcVabVg`Zihl^i]i]ZY^k^h^dcÉh egZb^ZgYZXdgVi^kZl^g^c\YZk^XZhnhiZb!6he^gZ# Cooper Industries, Ltd. | 7 ELECTRICAL PRODUCTS 2. TOOLS 8ddeZgÉhIddahhZ\bZcibVcj[VXijgZh]VcYiddah[dg ^cYjhig^Va!XdchigjXi^dcVcYXdchjbZgbVg`Zih!VcY 8ddeZgEdlZgHnhiZbh® egdk^YZhedlZgYZa^kZgn!gZa^VW^a^in ZaZXig^XVcYecZjbVi^X^cYjhig^VaedlZgiddah[dg\ZcZgVa VcYfjVa^inhdaji^dch[dgbZY^jb"VcY]^\]"kdaiV\ZZaZXig^X ^cYjhign!VZgdheVXZVcYVjidbdi^kZbVcj[VXijgZgh# edlZghnhiZbh!VcYYZa^kZghegdYjXi^k^inVcYZ[ÒX^ZcXn ^begdkZbZcihidi]Z>cYjhig^VaVcY8dbbZgX^VabVg`Zih# >i^hVahdVaZVYZg^cegdk^Y^c\XdbegZ]Zch^kZVjidbVi^dc SEGMENT REVENUES SEGMENT OPERATING EARNINGS (1) (in millions) hdaji^dch!^cXajY^c\VjidbViZYbZiZggZVY^c\$VYkVcXZY (in millions) bZiZg^c\^c[gVhigjXijgZ!XVeVX^idgY^heViX]VcYXdcigda!adVY (1) Before Xdcigda!Zfj^ebZcihZchdgh!Xg^i^XVaZfj^ebZcibdc^idg^c\ $750 $90 600 72 450 54 300 36 150 18 restructuring charges. VcYhnhiZb"l^YZ\gVe]^XVajhZg^ciZg[VXZVcYYViVXdaaZXi^dc# 8ddeZgEdlZgHnhiZbhVhh^hihji^a^i^Zh^cbZZi^c\i]Zhig^c" \ZciedlZgVkV^aVW^a^ingZfj^gZbZcihd[idYVnÉhYZbVcY^c\ XjhidbZghVgdjcYi]ZldgaY# 0 0 02 HIGHLIGHTS ¼ 6Xfj^gZY8VccdcIZX]cdad\^Zh!Zc]VcX^c\XVeVW^a^i^Zh idldg`l^i]ji^a^i^Zhl^i]ZcZg\nVjidbVi^dchdaji^dch i]VihdakZi]Z^gXg^i^XVa^hhjZhd[egdk^Y^c\gZa^VWaZVcY V[[dgYVWaZZcZg\n# ¼ 6X]^ZkZY`Zn\adWVal^ch!^cXajY^c\ildbV_dgegd_ZXih ^c8]^cVidVYkVcXZi]Z^g[Vhi"\gdl^c\ZaZXig^XVa^c[gV" higjXijgZcZZYh^ci]ZH]Zco]Zc$<jVc\o]djVgZVVcY 7Z^_^c\idgZ^c[dgXZi]Z\g^Y[dgi]Z'%%-Danbe^Xh# ¼ :meVcYZY^ci]Z8dbbZgX^Va$>cYjhig^VabVg`Zi!^cXajY" ^c\VaVg\ZYViVXZciZgegd_ZXijh^c\:ck^gdiZbe;G( Ój^Y"ÒaaZYhjWhiVi^dcigVch[dgbZghidgZYjXZ]ZVi! cd^hZVcYheVXZgZfj^gZbZcih^ci]ZWj^aY^c\kVjaih# ¼ >beaZbZciZYaZVcegdXZhhZhidh^\c^ÒXVcian^cXgZVhZ XVeVX^inViZm^hi^c\bVcj[VXijg^c\adXVi^dch# 8 | Cooper Industries, Ltd. 03 04 05 06 02 03 04 05 06 TOOLS 8ddeZgEdlZgIddah™d[[Zghi]ZbdhiXdbeaZiZgVc\Zd[ 8ddeZg=VcYIddah™^hVaZVY^c\bVcj[VXijgZgVcY ^cYjhig^VaedlZgiddahVcYVXXZhhdg^Zh!iZX]c^XVahdaji^dch hjeea^Zgd[]VcYiddah!hdaYZg^c\egdYjXihVcYX]V^cVcY VcYZmeZg^ZcXZ^ci]Z^cYjhign#I]ZY^k^h^dcbVcj[VXijgZh VXXZhhdg^Zh#I]ZhZegdYjXihVgZd[[ZgZYldgaYl^YZjcYZg Vl^YZkVg^Zind[^cYjhig^VaecZjbVi^XVcY98ZaZXig^Xiddah! ! 8gZhXZci® ! Aj[`^c® ! lZaa"`cdlcWgVcYhhjX]Vh8VbeWZaa® VjidbViZYVhhZbWanZfj^ebZciVcYgZaViZYhd[ilVgZ!heZX^Va" ! EajbW® ! =#@#EdgiZg!® LZaaZg!® L^hh® VcYMXZa^iZ® # C^X]dahdc® ^oZYYg^aa^c\Zfj^ebZciVcYXjiiZgh!ZaZXigdc^XhZgkdh!idgfjZ I]ZcZZYhd[egd[Zhh^dcVaVcYYd"^i"ndjghZa[ZcYjhZghVgZ bZVhjgZbZciZfj^ebZciVcYXdcigdah!hXgZlYg^kZgW^ihVcY bZiWnV\adWVaY^hig^Wji^dccZildg`hZgk^X^c\i]Z^cYjhig^Va! hdX`Zih!]d^hih!edlZgbdidgh!ijWZXaZVcZghVcYZmeVcYZgh ZaZXigdc^XVcYXdchjbZgbVg`Zih# VcYjc^kZghVa_d^cih#I]ZY^k^h^dcÉheg^bVgnbVg`Zih^cXajYZ VZgdheVXZ!Vjidbdi^kZVcY\ZcZgVa^cYjhign# HIGHLIGHTS 9Za^kZgZYldgaY"XaVhhXjhidb^oZYegZX^h^dcYg^aa^c\hdaj" ¼ HIGHLIGHTS GZXZ^kZYEdejaVgBZX]Vc^Xh>ccdkVi^dc6lVgY[dgi]Z ¼ i^dchidbV_dgVZgdheVXZbVcj[VXijgZgh!VX]^Zk^c\hda^Y hVaZh\gdli]l]^aZh^\c^ÒXVcian^begdk^c\hZgk^XZaZkZah# cZlGVe^YHa^YZlgZcX]# CVbZYÆ=VcYIddaVcYKZcYdgd[i]ZNZVgÇVi9^hig^Wj" ¼ >chiVaaZYhiViZ"d["i]Z"VgiXVe^iVaZc\^cZVhhZbWanhnhiZbh i^dc6bZg^XV!VaVg\Zl]daZhVaZg^ci]Z]VgYlVgZX]VccZa# ¼ [dg:jgdeZVcVjidbdi^kZbVcj[VXijgZg!Yg^k^c\egdXZhh" Xdcigda^cXdgZWjh^cZhh# 9ZkZadeZYVcYaVjcX]ZYldgaYÉhÒghiVc\aZWViiZgnVhhZb" ¼ >beaZbZciZYVg^\dgdjhCZlEgdYjXi9ZkZadebZci ¼ EgdXZhhid^cigdYjXZhZkZgVacZlegdYjXia^cZh!^cXajY^c\ 8gZhXZciGVe^YGZcX]!8gZhXZciEgdHZg^ZhEa^Zgh! Wanidda[dgÆHV[Zin"8g^i^XVa;VhiZc^c\Ç^ci]Z\adWVaVjid" Aj[`^cBV\AdX`iVeZbZVhjgZVcY)"^c"&C^X]dahdc bdi^kZVgZcV#I]^hiddad[[ZghjceVgVaaZaZYZg\dcdb^Xh! =VX`hVl[gVbZ# ÓZm^W^a^inVcYidgfjZVXXjgVXn# Cooper Industries, Ltd. | 9 6i8ddeZg!XjhidbZghXdbZÒghi#DjgZci^gZdg\Vc^oVi^dc^h^chi^iji^dcVa^o^c\ Y^hX^ea^cZYegdXZhhZhidZchjgZi]VilZYZa^kZgdcdjgXdbb^ibZcihiddjghigdc\! \gdl^c\VcYY^kZghZXjhidbZgWVhZ#LZVgZV\\gZhh^kZan^beaZbZci^c\egd\gVbh id^begdkZi]ZZVhZd[Yd^c\Wjh^cZhhl^i]8ddeZg#DjgXjhidbZg"XZcig^XXjaijgZ ^h]Zae^c\jhidZVgccZlWjh^cZhh^c]^\]"egdÒaZegd_ZXihi]ZldgaYdkZg# A Focus on Customers DISNEY CONCERT HALL Invue Vision Flood fixtures by Cooper Lighting illuminate the exterior of the Walt Disney Concert Hall in Los Angeles. 10 | Cooper Industries, Ltd. OLYMPIC WATER CUBE Cooper Menvier CEAG emergency lighting products were selected for the site of the aquatic events at the 2008 Beijing Olympic Games. CHEVRON OFFSHORE DRILLING PLATFORM Cooper Crouse-Hinds products are installed on numerous Chevron offshore facilities in the U.S. Gulf of Mexico and the Benguela Belize-Lobito Tomboco (BBLT) deepwater oilfields in Angola. INDUSTRIAL MARKET Cooper B-Line Cooper B-Line provides a wide range of electrical and mechanical supports and related products for industrial applications, ranging from cable tray and bolted framing systems to industrial enclosures and wireway. Cooper Lighting Industrial lighting from Cooper Lighting provides illumination to maximize productivity and visual comfort in industrial applications. Cooper Wiring Devices Wiring devices, plugs and connectors are designed for the most abusive and harsh conditions. Cooper Power Systems Innovative switchgear provides increased safety, reliability and customerfriendly design. Cooper Bussmann Low-Peak® currentlimiting fuses now offer easyID™ technology to reduce downtime and maintenance costs. Cooper Crouse-Hinds Products from Cooper Crouse-Hinds protect personnel and electrical systems in harsh industrial environments. Cooper Hand Tools Weller® soldering rework and repair products help high-tech electronics manufacturers control production costs. Cooper Power Tools Cooper Power Tools offers a broad range of pneumatic, DC electric and battery-powered tools to drive productivity in industrial applications. Cooper Menvier Cooper Menvier manufactures a wide range of fire detection and security systems, industrial mains and emergency lighting. Major Product Categories Cooper B-Line Bolted Framing Systems Cable Tray Spring Steel Fasteners Electrical Enclosures Meter Mounting Equipment Rack and Runway Systems Electronic Cabinets Pipe Hangers Industrial Lighting Plugs and Receptacles Obstruction Lighting Signals and Alarms Instrumentation Cooper Bussmann Connectors Fuseholders Disconnect Switches Low-Voltage Fuses Medium-Voltage Fuses Cooper Lighting Industrial Lighting Recessed Downlighting Fluorescent Lighting Floodlighting Architectural Area/Site Lighting Emergency/Exit Lighting Security Lighting Cleanroom Lighting Landscape Lighting Cooper Crouse-Hinds Conduit and Cable Fittings Enclosures Interconnect Products Control and Apparatus Equipment Cooper Menvier Emergency Lighting Central Battery Systems Fire Detection Industrial and Hazardous Lighting Cooper Power Systems Capacitors and Monitoring Equipment Pad-Mounted and Substation Transformers Reclosers Insulating Fluids Switchgear Modular Integrated Transportable Substations Cable Accessories Overvoltage Protection Demand Response and Load Control Fault Indicators Maintenance Tools Cooper Wiring Devices Switches and Receptacles Locking Plugs and Connectors Motor Controllers Pin and Sleeve Cooper Hand Tools Measuring Tools Screwdrivers Pliers and Wrenches Hammers Soldering Tools Cutting Tools Chain and Fittings Cooper Power Tools Pneumatic and DC Electric Assembly Tools Automated Assembly Equipment Pneumatic Material-Removal Tools Tube Cleaners and Expanders Bits and Sockets Universal Joints Cutting Tools Torque-Assurance Products Pneumatic Hoists Advanced Drilling Equipment COMMERCIAL MARKET Cooper Lighting Glare-free fluorescent linear lighting from Cooper Lighting provides added protection from eyestrain in computer-intensive environments such as offices. Cooper Wiring Devices Builders of hospitals, hotels, offices and shopping centers meet the high standards set by local and national electrical codes by using receptacles, switches and plugs from Cooper Wiring Devices. Cooper Hand Tools Technicians and service personnel use tools from Cooper Hand Tools for maintenance and repair applications. Cooper Power Tools Cooper Power Tools offers a diverse range of ergonomically designed pneumatic tools for commercial applications. Cooper Crouse-Hinds Electrical products for commercial construction such as Space-Saver EMT connectors from Cooper Crouse-Hinds offer labor-saving features that make installation fast and easy. Cooper B-Line Bolted framing systems, spring steel fasteners, pipe hangers and light duty cable tray systems from Cooper B-Line support commercial wiring and plumbing components. Cooper Power Systems Envirotran™ indoor power center transformers use Envirotemp®FR3,™ providing improved performance, environmental benefits and extended life. Cooper Bussmann The new Coordination Module™ helps electrical contractors meet new electrical code coordination requirements through an all-in-one solution. Cooper Menvier Emergency lighting, mains lighting, fire lighting and security systems from Cooper Menvier are used to enhance safety in commercial applications across Europe. Major Product Categories Cooper B-Line Bolted Framing Systems Commercial Cable Tray Spring Steel Fasteners Electrical Enclosures Meter Mounting Equipment Rack and Runway Systems Electronic Cabinets Pipe Hangers Cooper Lighting Recessed Downlighting Track Lighting Fluorescent Lighting Floodlighting Architectural Area/Site Lighting Emergency/Exit Lighting Security Lighting Landscape Lighting Cooper Bussmann Electrical Disconnects Fused Circuit Protection Elevator Disconnect Panels Cable Limiters Cooper Menvier Fire Detection Security Systems Lighting Systems Emergency Lighting Facility Communications Systems Fire Life Safety Weatherproof Notification Appliances Cooper Crouse-Hinds Commercial Fittings Hubs Outlet Boxes Weatherproof Lighting, Boxes and Covers Cooper Power Systems Monitoring Equipment Pad-Mounted and Substation Transformers Modular Integrated Transportable Substations Insulating Fluids Pad-Mounted Switchgear Power Factor Correction Demand Response Overcurrent Protection Automated Meter Reading Technology Cooper Wiring Devices Specification-Grade Switches and Receptacles Surge-Protection Equipment Straight Blade Plugs and Connectors Hospital-Grade Products Cooper Hand Tools Measuring Tools Screwdrivers Pliers and Wrenches Hammers Soldering Tools Cutting Tools Chain and Fittings Cooper Power Tools Pneumatic Assembly Tools Pneumatic Material-Removal Tools Bits and Sockets Universal Joints UTILITY MARKET Cooper Crouse-Hinds Cooper Crouse-Hinds products have many utility applications, including obstruction lighting to mark towers that may represent hazards to air navigation. Cooper Power Tools Utilities depend on tube cleaners and expanders from Cooper Power Tools for service and maintenance of heat exchangers. Cooper B-Line Meter mounting equipment from Cooper B-Line offers easy, weatherproof installation for years of reliable service. A broad range of Cooper B-Line supports are used in power generation, transmission and distribution. Cooper Bussmann Cable limiters are used for short-circuit protection of service panel cables. Cooper Lighting Area, street and roadway lighting provides excellent optical performance for utility customers. Cooper Hand Tools Utility companies rely on hand tools from Cooper Hand Tools for construction, repair and maintenance. Cooper Power Systems Cooper Power Systems’ Aries™ recloser is the industry’s first integrated electronic recloser that combines multiple functions into a complete intelligent system. Cooper Wiring Devices Utilities use wire mesh pulling grips to install both underground and overhead transmission cables. Major Product Categories Cooper B-Line Bolted Framing Systems Cable Tray Spring Steel Fasteners Electrical Enclosures Meter Mounting Equipment Pipe Hangers Cooper Bussmann Electrical Disconnects Medium-Voltage Fuses Cable Limiters Cooper Crouse-Hinds Conduit and Cable Fittings Control and Apparatus Equipment Industrial Lighting Obstruction Lighting Plugs and Receptacles Signals and Alarms Instrumentation Cooper Lighting Architectural Area/Site Lighting Floodlighting Street/Roadway Lighting Cooper Power Systems Switches Capacitors and Equipment Monitoring Pad-Mounted and Substation Transformers Switchgear Insulating Fluids Reclosers and Controls Relays Cable Accessories Lightning Arresters Feeder Automation Remote Monitoring Substation Automation and Monitoring Automated Meter Reading Technology Demand Response Modular Integrated Transportable Substations Cooper Wiring Devices Wire Mesh Grips Cooper Hand Tools Measuring Tools Pliers and Wrenches Hammers Cutting Tools Chain and Fittings Cooper Power Tools Pneumatic Material-Removal Tools Pneumatic Assembly Tools Bits and Sockets Universal Joints Torque-Assurance Products Tube Cleaners and Expanders RESIDENTIAL MARKET Cooper B-Line Spring Steel Fasteners, box supports and meter sockets from Cooper B-Line are used frequently in multi-dwelling residential construction. Cooper Crouse-Hinds Outlet boxes such as nonmetallic Speed-Mount™ switchboxes from Cooper Crouse-Hinds are designed for ease of installation in residential applications. Cooper Lighting Recessed downlighting fixtures from Cooper Lighting are a mainstay of most modern homes. Cooper Bussmann Two new A/C disconnects save contractors installation time through convenience features such as prewired connections. Cooper Hand Tools Professionals and do-ityourselfers choose tools from Cooper Hand Tools for quality and value. Cooper Power Systems ExpressStat®utility-controlled smart-services thermostat for cost-effective mass-market active control application. Cooper Wiring Devices Receptacles, switches, lighting controls and network wiring from Cooper Wiring Devices are essential in today’s state-of-the-art homes. Cooper Menvier Heightened concern for security and fire safety has created a residential market in Europe for Cooper Menvier’s security and fire-detection products. Cooper Power Tools Cooper Power Tools offers professional-quality woodworking tools for the discerning craftsman. Major Product Categories Cooper B-Line Bolted Framing Systems Spring Steel Fasteners Meter Mounting Equipment Cooper Bussmann A/C Disconnects Fused Circuit Protection Box Cover Units Cooper Crouse-Hinds Outlet Boxes Floor Boxes Weatherproof Lighting, Boxes and Covers Cooper Lighting Recessed Downlighting Track Lighting Fluorescent Lighting Security Lighting Landscape Lighting Cooper Menvier Fire Detection Security Systems Cooper Power Systems Surge Arresters Cable Accessories Pole Transformers Single-Phase, Pad-Mounted Transformers Demand Response Technology Automated Meter Reading Technology Insulating Fluids Switches Overcurrent and Underground Protection Cooper Wiring Devices Switches and Receptacles Aspire® Design System GFCI Devices Dimmers and Fan Speed Controls Wall Plates Home Automation Cooper Hand Tools Measuring Tools Cutting Tools Screwdrivers Pliers and Wrenches Hammers Soldering Tools Chain and Fittings Cooper Power Tools Pneumatic Drills and Sanders UTILITY INDUSTRY Cooper’s unparalleled portfolio of respected world-class products and services provides solutions at every point of the power delivery system, improving reliability, productivity and safety. We help our global utility partners deliver environmentally responsible services to their customers. Investments in the latest technologies allow utility customers to automate their systems and services. Serving PETROCHEMICAL, OIL AND GAS INDUSTRY Strict requirements, harsh and hazardous conditions, accelerating global growth and fluctuating economic conditions are significant challenges for the petrochemical industries. Cooper provides the products and services to deliver safe working conditions and provide protection from the elements. Critical Industries I]ZgZ^hcda^b^iid8ddeZgÉhVW^a^inidZVgccZlWjh^cZhh^c\gdli] bVg`ZihVcY^cYjhig^ZhVgdjcYi]Z\adWZ#I]gdj\]djgjceVgVaaZaZYegdYjXi WgZVYi]VcYiZX]c^XVaZmeZgi^hZ!lZYZa^kZgXdbegZ]Zch^kZhdaji^dchid XdbeaZmVcYY^kZghZXjhidbZghl^i]Xg^i^XVacZZYhl]ZgZgZa^VW^a^in^h ZhhZci^Va!hjX]Vhi]Zji^a^inVcYeZigdX]Zb^XVa^cYjhig^Zh# Cooper Industries, Ltd. | 11 CAPACITOR BANK CONTROLLER Cooper Power Systems offers energy automation solutions that combine nextgeneration technology with best-in-class products, allowing comprehensive technologies, products and expertise for customers worldwide. ASPIRE RF TM Cooper Wiring Devices’ ASPIRE RF ™ product line provides users with the next generation of convenient, dependable and user-friendly controls. DLSTM WALL CONTROLLER The Digital Lighting System (DLS™) is an advanced lighting control system that places the control intelligence in the Cooper Lighting fixture, allowing the user to program zones, scenes and fades. WIRELESS RF TOOLS Cooper Power Tools’ Cleco® cordless tools with infrared communication are designed for safety-critical fastening applications. Invigorating the Products 8ddeZg^h^ckZhi^c\^cdjgegdYjXihVcYhZgk^XZh^ciZgcVaanVcYi]gdj\]VXfj^h^i^dch idZchjgZi]VilZYZa^kZgldgaY"XaVhhd[[Zg^c\hl^i]V[dXjhdc^cXgZVhZYiZX]cdad\n VcYXVeVW^a^i^Zhi]Viegdk^YZZcY"jhZgheZX^ÒZYhdaji^dch#6hVcZmVbeaZ!lZVgZ Y^[[ZgZci^Vi^c\8ddeZg^ci]ZbVg`ZieaVXZWnYZkZade^c\^cYjhign"aZVY^c\gVY^d [gZfjZcXnVcYl^gZaZhhXVeVW^a^i^Zhi]VibV`ZÆYjbWÇegdYjXihÆhbVgi#ÇLZVgZ aZkZgV\^c\i]Vi`cdl"]dlVXgdhh8ddeZg!VcYbdhid[djgY^k^h^dchcdl]VkZVc G;YZk^XZ^ci]Z^gegdYjXiedgi[da^d# 12 | Cooper Industries, Ltd. 8ddeZg]VhVY^kZghZeaVi[dgbd[Wjh^cZhhZhidWj^aYjedc!Wdi]dg\Vc^XVaan VcYi]gdj\]higViZ\^XVXfj^h^i^dchi]ViVaadljhidZmeVcYdjgXdgZXVeVW^a^i^Zh# ;daadl^c\VY^hX^ea^cZYVXfj^h^i^dcegdXZhh!lZZkVajViZXdbeVc^Zhi]ViVgZ XdbeaZbZciVgndgVY_VXZciiddjgWjh^cZhhZh!l^aaVaadljhid\gdldjg\adWVa [ddieg^ci!VcYedhhZhhhigdc\ldg`^c\XVe^iVaX]VgVXiZg^hi^XhVcYiVaZciZY bVcV\ZbZciiZVbh#8ddeZgXadhZY[djgigVchVXi^dch^c'%%+!VYY^c\iddjg heZX^VainXdccZXidgh!ji^a^inVjidbVi^dcVcYÒgZ$hZXjg^incdi^ÒXVi^dceaVi[dgbh# Acquisition Highlights CANNON TECHNOLOGIES The acquisition of Cannon Technologies coupled with the existing Cooper Power Systems business allows Cooper to solve critical utility industry issues around asset productivity and service reliability. WHEELOCK, INC. Wheelock created a U.S.- based fire notification base for the Cooper Menvier division. G&H TECHNOLOGIES G&H Technologies enhanced the existing specialty connector business within the Cooper Crouse-Hinds division. Cooper Industries, Ltd. | 13 Financial Review COOPER STOCK PERFORMANCE The following graph compares the total shareholder return on Cooper’s Class A common shares for the five-year period December 31, 2001 through December 31, 2006 to the total returns for the same period of the Standard & Poor’s 500 Stock Index and a Cooper Peer Group Index. The cumulative total return is based upon an initial investment of $100 on December 31, 2001 with dividends reinvested. We currently operate in two primary business areas: Electrical Products and Tools. The 15 companies in the Cooper Peer Group Index were selected based on their presence in similar markets affected by similar economic and market trends to Cooper, their recognition by the investment community as Cooper peers and the comparability of their market capitalization to Cooper’s market capitalization. The members of the Cooper Peer Group Index are: Acuity Brands, Inc.; Danaher Corporation; Dover Corp.; Eaton Corp.; Emerson Electric Co.; Hubbell Incorporated (Class B); Illinois Tool Works; Ingersoll-Rand Co. Ltd.; Newell Rubbermaid Inc.; Parker-Hannifin Corp.; Pentair Inc.; Snap-On Inc.; SPX Corp.; The Stanley Works; and Thomas & Betts Corporation. The Cooper Peer Group Index has been weighted in accordance with each corporation’s market capitalization (closing stock price multiplied by the number of shares outstanding) as of the beginning of each of the five years covered by the performance graph. The weighted return for each year is the sum of the products obtained by multiplying (a) the percentage that each corporation’s market capitalization represents of the total market capitalization for all corporations in the Index for such year by (b) the total shareholder return for that corporation for such year. DEC 01 DEC 02 DEC 03 DEC 04 DEC 05 DEC 06 Cooper Industries, Ltd. $ 100 $ 108 $ 178 $ 213 $ 234 $ 295 S&P 500® $ 100 $ 78 $ 100 $ 111 $ 117 $ 135 Cooper Peer Group Index $ 100 $ 95 $ 125 $ 146 $ 146 $ 170 CUMULATIVE TOTAL RETURN Based upon an initial investment of $100 on December 31, 2001 with dividends reinvested. $300 Cooper Industries Ltd. S&P 500® Cooper Peer Group Index $250 $200 $150 $100 $50 DEC 01 14 | Cooper Industries, Ltd. DEC 02 DEC 03 DEC 04 DEC 05 DEC 06 Financial Highlights ($ in millions, except per-share data) REVENUES Operating earnings before restructuring Continuing income before restructuring and unusual items Net income DILUTED INCOME PER COMMON SHARE Continuing income before restructuring and unusual items Net income Shares used in computation of earnings per share (in millions) Cash dividends declared per common share 2006 2005 2004 2003 2002 $ 5,184.6 699.2 484.3 464.0 $ 4,730.4 559.8 391.1 163.9 $ 4,462.9 496.6 339.8 339.8 $ 4,061.4 394.6 266.0 148.3 $ 3,960.5 393.8 243.5 213.7 $ $ $ $ $ $ Number of employees Number of record shareholders 5.16 4.95 93.8 1.48 4.12 1.73 95.0 1.48 $ $ 3.58 3.58 94.8 1.40 $ 2.83 1.58 93.8 1.40 2.60 2.28 93.7 1.40 $ 31,000 22,900 29,000 23,100 26,900 24,500 27,200 26,300 28,400 26,800 $ 4,426.0 758.6 $ 3,997.5 732.9 $ 3,722.2 740.7 $ 3,358.4 703.0 $ 3,324.9 635.6 OPERATING EARNINGS BY BUSINESS SEGMENT BEFORE RESTRUCTURING Electrical Products Tools $ $ $ $ $ Total assets Total indebtedness Shareholders’ equity $ 5,374.8 1,008.5 2,475.3 OPERATING REVENUES BY BUSINESS SEGMENT Electrical Products Tools Return on revenues before restructuring and unusual items Return on average shareholders’ equity Return on invested capital before restructuring and unusual items Total debt-to-capitalization ratio 703.2 85.6 585.0 66.7 $ 5,215.1 1,021.9 2,205.2 9.3% 19.8% 13.5% 28.9% 511.2 62.7 $ 5,407.8 1,461.6 2,286.5 8.3% 7.3% 10.8% 31.7% 435.1 39.0 $ 4,965.3 1,343.3 2,118.2 7.6% 15.4% 9.7% 39.0% 400.6 27.3 $ 4,687.9 1,438.6 2,002.4 6.5% 7.2% 8.2% 38.8% 6.1% 10.6% 7.7% 41.8% These Financial Highlights contain non-GAAP financial measures. See the reconciliation of these measures to the most directly comparable GAAP measures on page 17 of this report. REVENUES DILUTED EARNINGS PER SHARE (1) (in billions) (1) From continuing operations before restructuring and unusual items. 7% CAGR 19% CAGR $5.0 $5.0 4.0 4.0 3.0 3.0 2.0 2.0 1.0 1.0 0 0 02 03 04 05 06 02 03 04 05 06 Cooper Industries, Ltd. | 15 Performance Highlights NET DEBT-TO-TOTAL-CAPITALIZATION RATIO 50% 40% 38.9% 36.2% 29.3% 30% 26.1% 20.5% 19.1% 20% 10% Balance sheet strength provides exceptional flexibility. 0% DEC 01 DEC 02 DEC 03 FREE CASH FLOW CONVERSION (1) (1) DEC 04 DEC 05 DEC 06 RETURN ON INVESTED CAPITAL Free cash flow divided by income from continuing operations. 2.5 15% 2.0 12% 1.5 9% 1.0 6% .5 3% 0% 0 02 03 04 05 Sixth consecutive year Free Cash Flow greater than Continuing Income. 06 02 03 04 05 Disciplined capital investment has close to doubled ROIC. These Performance Highlights contain non-GAAP financial measures. See the reconciliation of these measures to the most directly comparable GAAP measures on page 17 of this report. 16 | Cooper Industries, Ltd. 06 Reconciliation of Non-GAAP Financial Measures ($ in millions, except per-share data) 2006 2005 2004 2003 2002 OPERATING EARNINGS Operating earnings Restructuring $ 699.2 – $ 559.8 – $ 496.6 – $ 392.0 2.6 $ 354.7 39.1 Operating earnings before restructuring $ 699.2 $ 559.8 $ 496.6 $ 394.6 $ 393.8 $ 484.3 – – – $ 391.1 – – – $ 339.8 – – – $ 274.3 5.0 9.6 (22.9) $ 213.7 29.8 – – $ 484.3 $ 391.1 $ 339.8 $ 266.0 $ 243.5 $ 4.95 0.21 – $ 1.73 2.39 – $ 3.58 – – $ 1.58 1.34 (0.09) $ 2.28 – 0.32 $ 5.16 $ 4.12 $ 3.58 $ 2.83 $ 2.60 $ 703.2 – $ 585.0 – $ 511.2 – $ 418.7 16.4 $ 376.6 24.0 Operating earnings before restructuring $ 703.2 $ 585.0 $ 511.2 $ 435.1 $ 400.6 TOOLS: Operating earnings Restructuring $ 85.6 – $ 66.7 – $ 62.7 – $ 39.4 (0.4) $ 14.6 12.7 Operating earnings before restructuring $ 85.6 $ 66.7 $ 62.7 $ 39.0 $ 27.3 $ 5.0 300.7 702.8 $ 7.6 11.4 1,002.9 $ 97.6 665.4 698.6 $ 6.2 0.4 1,336.7 $ 4.1 153.8 1,280.7 CONTINUING INCOME Income from continuing operations Restructuring Contribution to Cooper Industries Foundation Interest income on tax refund Continuing income before restructuring and unusual items DILUTED INCOME PER COMMON SHARE Net income Discontinued operations Restructuring and unusual items Continuing income before restructuring and unusual items OPERATING EARNINGS BY BUSINESS SEGMENT ELECTRICAL PRODUCTS: Operating earnings Restructuring DEBT-TO-TOTAL-CAPITALIZATION RATIO Short-term debt Current maturities of long-term debt Long-term debt Total debt Total shareholders’ equity $ 1,008.5 2,475.3 $ 1,021.9 2,205.2 $ 1,461.6 2,286.5 $ 1,343.3 2,118.2 $ 1,438.6 2,002.4 Total capitalization $ 3,483.8 $ 3,227.1 $ 3,748.1 $ 3,461.5 $ 3,441.0 Total debt-to-total-capitalization ratio 28.9% 31.7% 39.0% 38.8% 41.8% Total debt Cash and cash equivalents $ 1,008.5 (423.5) $ 1,021.9 (452.8) $ 1,461.6 (652.8) $ 1,343.3 (463.7) $ 1,438.6 (302.0) Net debt $ $ $ $ $ 1,136.6 Total capitalization Cash and cash equivalents $ 3,483.8 (423.5) $ 3,227.1 (452.8) $ 3,748.1 (652.8) $ 3,461.5 (463.7) $ 3,441.0 (302.0) Total capitalization, net of cash $ 3,060.3 $ 2,774.3 $ 3,095.3 $ 2,997.8 $ 3,139.0 Net debt-to-total-capitalization ratio FREE CASH FLOW Net cash provided by operating activities Capital expenditures Proceeds from sales of property, plant, equipment and other 585.0 19.1% 569.1 20.5% 808.8 26.1% 879.6 29.3% 36.2% $ 601.4 (85.3) 18.9 $ 573.5 (96.7) 13.6 $ 473.6 (102.8) 11.8 $ 445.3 (79.9) 18.1 $ 479.8 (73.8) 22.0 $ 535.0 $ 490.4 $ 382.6 $ 383.5 $ 428.0 $ 699.2 – – $ 559.8 – – $ 496.6 – – $ 392.0 2.6 12.0 $ 354.7 39.1 – Operating earnings before restructuring and unusual items Income tax expenses $ 699.2 176.2 $ 559.8 117.5 $ 496.6 102.8 $ 406.6 81.3 $ 393.8 93.5 Operating earnings before restructuring and unusual items, after tax $ 523.0 $ 442.3 $ 393.8 $ 325.3 $ 300.3 Average total capital before accumulated goodwill amortization $ 3,872.5 Free cash flow RETURN ON INVESTED CAPITAL Operating earnings Restructuring Contribution to Cooper Industries Foundation Return on invested capital 13.5% $ 4,109.4 10.8% $ 4,047.0 9.7% $ 3,972.8 8.2% $ 3,878.5 7.7% Cooper Industries, Ltd. | 17 Electrical Highlights ($ in millions) FINANCIAL STATISTICS Revenues Operating earnings + Depreciation and amortization = EBITDA 2006 2005 2004 2003 2002 $ 4,426.0 $ 703.2 90.4 $ 3,997.5 $ 585.0 88.7 $ 3,722.2 $ 511.2 93.9 $ 3,358.4 $ 418.7 90.3 $ 3,324.9 $ 376.6 89.3 $ 793.6 $ 673.7 $ 605.1 $ 509.0 $ 465.9 $ 703.2 90.4 $ 585.0 88.7 $ 511.2 93.9 $ 435.1 90.3 $ 400.6 89.3 $ 793.6 $ 673.7 $ 605.1 $ 525.4 $ 489.9 Capital expenditures $ 60.8 $ 69.9 $ 73.0 $ 54.7 $ 57.6 Total assets $ 3,960.8 Operating earnings before restructuring charges + Depreciation and amortization = EBITDA before restructuring charges $ 3,600.9 $ 3,591.8 $ 3,433.2 $ 3,394.0 Return on revenues Return on revenues before restructuring charges 15.9% 15.9% 14.6% 14.6% 13.7% 13.7% 12.5% 13.0% 11.3% 12.0% Return on average assets Return on average assets before restructuring charges EBITDA Return on revenues Return on average assets EBITDA before restructuring charges Return on revenues Return on average assets 18.6% 18.6% 16.3% 16.3% 14.6% 14.6% 12.3% 12.7% 11.0% 11.7% 17.9% 21.0% 16.9% 18.7% 16.3% 17.2% 15.2% 14.9% 14.0% 13.5% 17.9% 21.0% 16.9% 18.7% 16.3% 17.2% 15.6% 15.4% 14.7% 14.2% GEOGRAPHIC STATISTICS Revenue by destination Domestic International $ 3,113.5 1,312.5 $ 2,844.9 1,152.6 $ 2,669.7 1,052.5 $ 2,445.1 913.3 $ 2,492.3 832.6 These Electrical Highlights contain non-GAAP financial measures. See the reconciliation of these measures to the most directly comparable GAAP measures on page 17 of this report. REVENUES OPERATING EARNINGS (1) (in billions) (in millions) (1) Before restructuring charges. 7% CAGR 15% CAGR $5.0 $700 4.0 560 3.0 420 2.0 280 1.0 140 0 0 02 03 18 | Cooper Industries, Ltd. 04 05 06 02 03 04 05 06 Tools Highlights ($ in millions) 2006 FINANCIAL STATISTICS Revenues Operating earnings + Depreciation and amortization = EBITDA Operating earnings before restructuring charges + Depreciation and amortization = EBITDA before restructuring charges 2005 2004 2003 2002 $ $ 758.6 85.6 20.0 $ $ 732.9 66.7 20.1 $ $ 740.7 62.7 21.7 $ $ 703.0 39.4 26.9 $ $ 635.6 14.6 29.1 $ 105.6 $ 86.8 $ 84.4 $ 66.3 $ 43.7 $ 85.6 20.0 $ 66.7 20.1 $ 62.7 21.7 $ 39.0 26.9 $ 27.3 29.1 $ 105.6 $ 86.8 $ 84.4 $ 65.9 $ 56.4 Capital expenditures $ 9.1 $ 12.4 $ 10.2 $ 12.8 $ 12.2 Total assets $ 686.6 $ 700.5 $ 737.0 $ 734.6 $ 724.2 Return on revenues Return on revenues before restructuring charges 11.3% 11.3% 9.1% 9.1% 8.5% 8.5% 5.6% 5.5% 2.3% 4.3% Return on average assets Return on average assets before restructuring charges EBITDA Return on revenues Return on average assets EBITDA before restructuring charges Return on revenues Return on average assets 12.3% 12.3% 9.3% 9.3% 8.5% 8.5% 5.4% 5.3% 1.9% 3.5% 13.9% 15.2% 11.8% 12.1% 11.4% 11.5% 9.4% 9.1% 6.9% 5.7% 13.9% 15.2% 11.8% 12.1% 11.4% 11.5% 9.4% 9.0% 8.9% 7.3% GEOGRAPHIC STATISTICS Revenue by destination Domestic International $ 415.6 343.0 $ 420.0 312.9 $ 411.7 329.0 $ 379.0 324.0 $ 354.3 281.3 These Tools Highlights contain non-GAAP financial measures. See the reconciliation of these measures to the most directly comparable GAAP measures on page 17 of this report. REVENUES OPERATING EARNINGS (1) (in millions) (in millions) (1) Before restructuring charges. 5% CAGR 33% CAGR $1,000 $100 800 80 600 60 400 40 200 20 0 0 02 03 04 05 06 02 03 04 05 06 Cooper Industries, Ltd. | 19 Report of Management on Disclosure and Compliance 2006 I]ZHVgWVcZh"DmaZn6Xid['%%'HDM!XdbW^cZYl^i]i]Z gZ\jaVi^dchd[i]ZHZXjg^i^ZhVcY:mX]Vc\Z8dbb^hh^dcH:8 VcYgZaViZYH:8"VeegdkZYXdgedgViZ\dkZgcVcXZa^hi^c\gZfj^gZ" bZcihd[i]ZCZlNdg`HidX`:mX]Vc\ZCNH:!Xdci^cjZid ]VkZVh^\c^ÒXVci^beVXidci]ZXdgedgViZ\dkZgcVcXZ!gZXdgY `ZZe^c\VcYejWa^XY^hXadhjgZdWa^\Vi^dchd[8ddeZgVcYdi]Zg ejWa^XanigVYZYXdbeVc^Zh#8ddeZgXdbea^Zhl^i]VaahZXi^dchd[ HDM!i]ZgZaViZYH:8gjaZhVcYCNH:gZfj^gZbZcih!^cXajY^c\ XZgi^ÒXVi^dcWni]Z8]^Z[:mZXji^kZD[ÒXZgVcY8]^Z[;^cVcX^Va D[ÒXZgd[i]Z^ciZ\g^inVcYVXXjgVXnd[8ddeZgÉhÒcVcX^VahiViZ" bZcih!VcYXZgi^ÒXVi^dcWni]Z8]^Z[:mZXji^kZD[ÒXZgd[Xdb" ea^VcXZl^i]i]ZCNH:XdgedgViZ\dkZgcVcXZhiVcYVgYh# I]ZaVlVahdgZfj^gZh8ddeZgidbV^ciV^cegdXZYjgZhidegdk^YZ gZVhdcVWaZVhhjgVcXZi]Vii]Z8dbeVcn^hVWaZidXdaaZXi!egd" XZhhVcYY^hXadhZi]Z^c[dgbVi^dcgZfj^gZY^ci]Z8dbeVcnÉh fjVgiZganVcYVccjVagZedgih!VhlZaaVhXjggZcigZedgihdc ;dgb-"@#I]ZaVlVahdgZfj^gZheZg^dY^XgZk^ZlVcYZkVajVi^dc d[i]ZhZgZedgi^c\egdXZYjgZh#=ZgZ!idd!8ddeZg[jaanXdbea^Zh l^i]i]ZhZgZ\jaVi^dch# 8ddeZgÉhbVcV\ZbZciXdci^cjZhid]daYeg^bVgngZhedch^W^a^in [dgi]Z8dchda^YViZY;^cVcX^VaHiViZbZcihVcYdi]Zg^c[dgbV" i^dc^cXajYZY]ZgZ^cVcY^ci]Z6ccjVaGZedgidc;dgb&%"@ VcY[dgVhXZgiV^c^c\i]Vii]ZYViV[V^gangZÓZXihi]Z8dbeVcnÉh ÒcVcX^Vaedh^i^dc!gZhjaihd[deZgVi^dchVcYXVh]Ódlh#I]Z 8dbeVcnegZeVgZYi]Z8dchda^YViZY;^cVcX^VaHiViZbZcih^c VXXdgYVcXZl^i]\ZcZgVaanVXXZeiZYVXXdjci^c\eg^cX^eaZh!VcY hjX]hiViZbZcihcZXZhhVg^an^cXajYZVbdjcihi]ViVgZWVhZYdc WZhiZhi^bViZhVcY_jY\bZcih!l^i]Veegdeg^ViZXdch^YZgVi^dc \^kZcidbViZg^Va^in# I]Z8dbeVcnÉhhnhiZbd[^ciZgcVaXdcigdah^hYZh^\cZYidegd" k^YZgZVhdcVWaZVhhjgVcXZi]Vi8dbeVcnVhhZihVgZhV[Z\jVgYZY [gdbadhhdgjcVji]dg^oZYjhZdgY^hedh^i^dcVcYi]ViigVchVX" i^dchVgZZmZXjiZY^cVXXdgYVcXZl^i]bVcV\ZbZciÉhVji]dg^" oVi^dcVcYVgZegdeZgangZXdgYZYideZgb^ii]ZegZeVgVi^dc d[ÒcVcX^VahiViZbZcih^cVXXdgYVcXZl^i]\ZcZgVaanVXXZeiZY VXXdjci^c\eg^cX^eaZh#I]^hhnhiZb^hVj\bZciZYWni]ZXVgZ[ja hZaZXi^dcVcYigV^c^c\d[fjVa^ÒZYeZghdccZa!VegdeZgY^k^h^dc d[gZhedch^W^a^i^ZhVcYi]ZY^hhZb^cVi^dcd[lg^iiZceda^X^ZhVcY egdXZYjgZh#9jg^c\'%%+!i]Z8dbeVcnXdcYjXiZYVcVhhZhh" bZcid[^ih^ciZgcVaXdcigdaegd\gVbVhgZfj^gZYWnHZXi^dc )%)d[HDM#I]^hVhhZhhbZciY^Ycdi^YZci^[nVcnbViZg^Va lZV`cZhhZh^c8ddeZgÉh^ciZgcVaXdcigdah# 20 | Cooper Industries, Ltd. 6c^ciZgcVaVjY^iegd\gVbbdc^idghi]ZZ[[ZXi^kZcZhhd[i]^h XdcigdahnhiZb#I]Z6jY^i8dbb^iiZZd[i]Z7dVgYd[9^gZX" idgh!l]^X]^hXdbeg^hZYhdaZand[^cYZeZcYZciY^gZXidgh!^h gZhedch^WaZ[dgdkZghZZ^c\i]Z8dbeVcnÉhÒcVcX^VagZedgi^c\ egdXZhh#I]Z6jY^i8dbb^iiZZbZZiheZg^dY^XVaanl^i]bVc" V\ZbZciVcY8ddeZgÉh^ciZgcVaVjY^idghidgZk^Zli]Zldg`d[ ZVX]VcYidbdc^idgi]ZY^hX]Vg\ZWnZVX]d[^ihgZhedch^W^a^i^Zh# I]ZK^XZEgZh^YZci!>ciZgcVa6jY^i!gZedgihY^gZXianidi]Z6jY^i 8dbb^iiZZ#I]Z6jY^i8dbb^iiZZVahd]^gZh^cYZeZcYZciVjY^" idghid]ZaeY^hX]Vg\Z^ihgZhedch^W^a^i^ZhVcYbZZiheZg^dY^XVaan l^i]i]ZhZ^cYZeZcYZciVjY^idgh!l]d]VkZ[gZZVXXZhhidi]Z 6jY^i8dbb^iiZZVcYi]Z7dVgYd[9^gZXidgh!idY^hXjhhi]ZfjVa" ^inVcYVXXZeiVW^a^ind[i]Z8dbeVcnÉhÒcVcX^VagZedgi^c\VcY ^ciZgcVaXdcigdah#>cVYY^i^dc!i]Z8dbeVcn!VXi^c\i]gdj\]i]Z 6jY^i8dbb^iiZZ!]Vh^beaZbZciZYVegdXZYjgZegdk^Y^c\[dg i]ZXdcÒYZci^VahjWb^hh^dcWnZbeadnZZhidi]Z8dgedgViZ:i]^Xh 8dbb^iiZZ!l^i]cdi^XZidi]Z6jY^i8dbb^iiZZ!d[XdcXZgch gZ\VgY^c\VcnfjZhi^dcVWaZVXXdjci^c\dgVjY^i^c\bViiZgh# :gchiNdjc\!AAE!8ddeZgÉh^cYZeZcYZciVjY^idgh!^hZc\V\ZY idZmegZhhVcde^c^dcdci]Z8dbeVcnÉh8dchda^YViZY;^cVcX^Va HiViZbZcih#I]Z^gde^c^dc^hWVhZYdcegdXZYjgZhi]Vii]Zn WZa^ZkZidWZhj[ÒX^Zciidegdk^YZgZVhdcVWaZVhhjgVcXZi]Vii]Z ÒcVcX^VahiViZbZcihXdciV^ccdbViZg^VaZggdgh#:gchiNdjc\! 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Butler 1, 4 Retired Chairman and Chief Executive KPMG, LLP SENIOR MANAGEMENT Robert M. Devlin 2, 3, 4 Chairman Curragh Capital Partners Principal Owner and Director Forethought Financial Group Terry A. Klebe Senior Vice President and Chief Financial Officer Ivor J. Evans Partner Thayer Capital Partners Retired Vice Chairman Union Pacific Corporation 3, 4 Kevin M. McDonald Senior Vice President and General Counsel C. Thomas O’Grady Senior Vice President, Business Development Kirk S. Hachigian 2 Chairman, President and Chief Executive Officer Cooper Industries, Ltd. James P. Williams Senior Vice President, Human Resources Linda A. Hill Professor Harvard Business School DIVISION PRESIDENTS 3, 4 James J. Postl Retired President and Chief Executive Officer Pennzoil Quaker State Company 1, 4 Dan F. Smith 2, 3 President and Chief Executive Officer Lyondell Chemical Company Gerald B. Smith 1, 4 Chairman and Chief Executive Officer Smith Graham & Company James R. Wilson 1, 2, 4 Deputy Chairman and Presiding Non-Management Director Cooper Industries, Ltd. Retired Chairman, President and Chief Executive Officer Cordant Technologies Inc. 22 | Cooper Industries, Ltd. Kirk S. Hachigian Chairman, President and Chief Executive Officer Curt J. Andersson President Cooper Crouse-Hinds Syracuse, New York Neil Schrimsher President Cooper Lighting Peachtree City, Georgia Kevin C. Kissling President Cooper B-Line Highland, Illinois Gary A. Masse Group President Cooper Tools Apex, North Carolina Jeffrey M. Roberts President Cooper Wiring Devices Peachtree City, Georgia Axel Haack President Cooper Europe Royal Leamington Spa Warwickshire, England 1 Member of the Audit Committee 2 Member of the Executive Committee 3 Member of the Management Development and Compensation Committee 4 Member of the Committee on Nominations and Corporate Governance Kevin M. Stein President Cooper Bussmann Ellisville, Missouri Michael A. Stoessl Group President Cooper Power Systems Waukesha, Wisconsin CORPORATE OFFICERS Grant L. Gawronski Vice President International Operations David T. Gunther Vice President Internal Audit Terrance V. Helz Associate General Counsel and Secretary Stephen M. Kole Treasurer Jeffrey B. Levos Vice President Finance David L. Pawl Vice President Operations James T. Pendley Chief Marketing Officer John B. Reed Vice President Taxes Melissa Scheppele Vice President Business Systems Robert W. Teets Vice President Environmental Affairs and Risk Management TRANSFER AGENT, REGISTRAR AND DIVIDEND DISBURSING AGENT Computershare Trust Company, N. A. General correspondence about your shares should be addressed to: Computershare Trust Company, N. A. 250 Royal Street Canton, MA 02021 Correspondence related to the Dividend Reinvestment Plan, including optional cash payment inquiries, should be addressed to: Computershare Trust Company, N. A. P.O. Box 43081 Providence, RI 02940-3081 Requests to transfer Cooper shares should be addressed to: Computershare Trust Company, N. A. P.O. Box 43070 Providence, RI 02940-3070 Telephone inquiries can be made to the Telephone Response Center at (781) 575-2725, Monday–Friday, 9:00 a.m. to 5:00 p.m., Eastern time. An automated inquiry service is available seven days a week, 24 hours per day. For hearing-impaired service call (800) 490-1493 within the U.S. and (781) 575-4592 outside the U.S. Cooper’s transfer agent also may be contacted on the Internet at www.computershare.com. SHAREHOLDER INFORMATION LINE For the latest news about Cooper, including the quarterly financial results and dividend information, call (800) 371-9242. Through this line, you also can access the transfer agent regarding stock information, and request faxed or mailed copies of news releases and other Cooper information. ADDITIONAL SHAREHOLDER ASSISTANCE For additional assistance regarding your shareholdings, contact: Corporate Governance Department Cooper Industries, Ltd. P.O. Box 4446 Houston, Texas 77210-4446 Telephone (713) 209-8673 INVESTOR RELATIONS CONTACT Jon Safran Director, Investor Relations Cooper Industries, Ltd. P.O. Box 4446 Houston, Texas 77210-4446 Telephone (713) 209-8610 E-mail address: safran@cooperindustries.com ANNUAL MEETING The Annual Meeting of Shareholders will be held at 11:00 a.m. Central time on April 24, 2007, 64th Floor, 600 Travis Street, Houston, Texas. A meeting notice and proxy materials are being mailed to all shareholders of record as of February 28, 2007. CORPORATE HEADQUARTERS Cooper Industries, Ltd. 600 Travis Street, Suite 5800 Houston, Texas 77002-1001 Telephone (713) 209-8400 Internet address: www.cooperindustries.com E-mail address: info@cooperindustries.com FORWARD-LOOKING STATEMENTS Certain statements in this annual report are forward-looking under the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect Cooper’s expectations, objectives and goals with respect to future events and financial performance, and are based on assumptions and estimates that Cooper believes are reasonable. Forward-looking statements include, but are not limited to, any statements regarding future revenues, earnings, margins, cash flows, dividends and capital expenditures. Cooper wishes to caution readers not to put undue reliance on these statements and that actual results could differ materially from anticipated results. These statements are subject to various risks and uncertainties, many of which are outside the control of Cooper, including, without limitation, market and economic conditions; changes in raw material and energy costs; industry competition; the ability to execute and realize the expected benefits from strategic initiatives, including revenue growth plans and cost-control and productivity improvement programs; the magnitude of any disruptions from manufacturing rationalizations and the implementation of the Enterprise Business System; mergers and acquisitions and their integration; political developments; changes in tax laws, tax treaties or tax regulations; the resolution of potential liability exposure resulting from the Federal-Mogul bankruptcy; the timing and amount of share repurchases by Cooper; and other risk factors as discussed from time to time in Cooper’s Securities and Exchange Commission filings. The trademarks listed on the cover are owned by Cooper Industries or its related affiliates and subsidiaries. *Gardner-Denver is a registered trademark of Gardner Denver Machinery, Inc. and is used by Cooper Industries under license. Design: Savage Design Group, Inc., Houston, Texas COOPER B-LINE – Access Cabinets, B-Line, Cent-R-Rail, Dura-Cooper, Dura-Green, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss, Bussmann, Coiltronics, Cubefuse, Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum Mercury, Optima, Polysurg, PowerStor, TransX, COOPER CROUSE-HINDS – Arktite, Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H MEDC, Mini-Line, Myers, NexT, Nortem, Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond Erem, H.K. Porter, Kahnetics, Lufkin, Metromex, Nicholson, Plumb, Weller, Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison Emerald, Fail-Safe, Halo, Invue, Iris, Lumark, Lumiere, McGraw-Edison, Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Cooper Fire, Crompton, Fulleon, JSB, Luminox, MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Technologies, Cybectec, Cooper Power Systems, Edison, ELF, EMSA, Envirotemp, EnviroTran EnviroVR, FR3, Kearney, Kyle, NOVA, MagneX, McGraw-Edison, NX, NX Companion, Storm Trapper, UltraSIL, VariStar, VariGap, X Limiter, COOPER POWER TOOLS – Airetool, Apex, Cleco, Automated Systems, DGD, Dotco, Gardner-Denver*, MasterPower, Quakenbush, Recoules, Rotor Tool, Utica, COOPER WIRING DEVICES – Aspire, Aspire RF, Cooper Wiring Devices, Hart-Lock, Media Sync, Mobile X-Ray, Novitas, Power-Lock, Royer, Shock Sentry, Siena, SurgBloc, AutoGrip, Safety Grip, Microset, Antares, Cooper Sedna, Screw-Catch, Eagle, Arrow-Hart, WeatherBox, G-Tool, Quickeze, Super Plug, COOPER B-LINE – Access Cabinets, B-Line Cent-R-Rail, Dura-Cooper, Dura-Green, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss Bussmann, Coiltronics, Cubefuse, Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum, Mercury, Optima, Polysurg, PowerStor, TransX COOPER CROUSE-HINDS – Arktite, Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H, MEDC, Mini-Line, Myers, NexT, Nortem Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond, Erem, H.K. Porter, Kahnetics, Lufkin Metromex, Nicholson, Plumb, Weller, Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison, Emerald, Fail-Safe, Halo, Invue, Iris Lumark, Lumiere, McGraw-Edison, Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Coope Fire, Crompton, Fulleon, JSB, Luminox, MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock, COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Technologies, Cybectec, Cooper Power Systems, Edison, ELF, EMSA, Envirotemp, EnviroTran, EnviroVR, FR3, Kearney Kyle, NOVA, MagneX, McGraw-Edison, NX, NX Companion, Storm Trapper, UltraSIL, VariStar, VariGap, X Limiter, COOPER POWER TOOLS – Airetool, Apex, Cleco Automated Systems, DGD, Dotco, Gardner-Denver*, MasterPower, Quakenbush, Recoules, Rotor Tool, Utica, COOPER WIRING DEVICES – Aspire, Aspire RF, Coope Wiring Devices, Hart-Lock, Media Sync, Mobile X-Ray, Novitas, Power-Lock, Royer, Shock Sentry, Siena, SurgBloc, AutoGrip, Safety Grip, Microset, Antares, Coope Sedna, Screw-Catch, Eagle, Arrow-Hart, WeatherBox, G-Tool, Quickeze, Super Plug, COOPER B-LINE – Access Cabinets, B-Line, Cent-R-Rail, Dura-Cooper, Dura Green, E2 & Design, Enviroshield, Kwik Wire, RCM+, Redi-Rail, Ruff-In Willsher & Quick, COOPER BUSSMANN – B&S, Buss, Bussmann, Coiltronics, Cubefuse Edison, Eletromec, ELF, easyID, Fusetron, Karp, Limitron, Low-Peak, Magnum, Mercury, Optima, Polysurg, PowerStor, TransX, COOPER CROUSE-HINDS – Arktite Cam-Lok, CEAG, Champ, Condulet, Crouse-Hinds, Domex, Ex-Cell, eXLink, G&H, MEDC, Mini-Line, Myers, NexT, Nortem, Posi-Break, Posi-Lok, PowerPlus, Spec 1 Fire, WPI COOPER HAND TOOLS – Atila, Campbell, Collins, Crescent, Diamond, Erem, H.K. Porter, Kahnetics, Lufkin, Metromex, Nicholson, Plumb, Weller Wire-Wrap, Wiss, Xcelite, COOPER LIGHTING – Ametrix, AtLite, Corelite, DLS, Edison, Emerald, Fail-Safe, Halo, Invue, Iris, Lumark, Lumiere, McGraw-Edison Metalux, MWS, Neo-Ray, Portfolio, Regent, RSA, Shaper, Streetworks, Sure-Lites, COOPER MENVIER – Capri, CEAG, Cooper Fire, Crompton, Fulleon, JSB, Luminox MEDC, Menvier, Nugelec, Pretronica, Regalsafe, SAFEPATH, Scantronic, Univel, Wheelock, COOPER POWER SYSTEMS – Aries, Cannon Technologies, Combined Cooper Industries, Ltd. P.O. Box 4446 Houston, Texas 77210-4446