Document B5bM9pqar8ym23dqaDdvy8Nj8

elOvk Page 52 of 84 Table of Contents COOPER INDUSTRIES, LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 2: RESTRUCTURING During the fourth quarter of 2003, Cooper recorded net restructuring charges of $16 9 million, or $13 6 million after taxes ($ 14 per diluted common share) This represented costs associated with restructuring projects undertaken in 2003 of $18 4 million, partially offset by a $1 5 million adjustment of estimates for restructuring projects initiated in 2002 The most significant action included in the charges was an announcement of the closing of Cooper Wiring Devices' manufacturing operations in New York City This action will include the withdrawal from a multiple-employer pension plan Cooper recorded a $12 5 million obligation as an estimate of Cooper's portion of unfunded benefit obligations of the plan The remaining $5 9 million charge primarily represents severance for announced employment reductions at several locations The 2003 net impact of the charges was $16 4 million on the Electrical Products segment, $(0 4) million on the Tools & Hardware segment and $0 9 million related to General Corporate As of December 31, 2004 and 2003, Cooper had paid $4 9 million and $2 7 million, respectively, for the actions, all of which was for severance costs A total of 114 salaried and 150 hourly personnel were eliminated as a result of these actions A total of 106 personnel were terminated as of December 31,2003 and the remainder terminated in 2004 The majority of the remaining severance obligation was paid in the first half of 2004 The multiple-employer pension obligation is expected to be paid over 15 years, beginning in 2005 In 2001, Cooper accrued $35 million reflecting the contractual amount due to financial advisors associated with Cooper's strategic alternatives review Cooper paid $5 million to the advisors in the 2001 fourth quarter and $15 7 million during 2002, leaving a balance of $14 3 million payable upon the occurrence of certain events During the second quarter of 2003, the terms of the agreements with the financial advisors expired with the contingent events that required payment not occurring Accordingly, the accrual was reversed and reflected as a $14 3 million negative restructuring charge ($8 6 million, net of taxes) on the consolidated income statement Restructuring activity for 2003 totaled $2 6 million consisting of the fourth quarter net restructuring charge of $16 9 million, less the $14 3 million negative restructuring charge During the fourth quarter of 2002, Cooper committed to (1) the closure of ten manufacturing facilities, (2) further employment reductions to appropriately size Cooper's workforce to market conditions, and (3) the write-off of assets related to production rationalization activities These actions were taken as a part of Cooper management's ongoing assessment of required production capacity in consideration of the current demand levels In connection with these commitments, certain production capacity and related assets were sold, outsourced, discontinued or moved to a lower cost environment Cooper recorded a provision for these announced actions of$39 1 million ($15 0 million of which was non-cash), or $29 8 million after taxes ($ 32 per diluted common share) Of this amount, $24 0 million ($110 million of which was non-cash) was associated with the Electrical Products segment, $12 7 million ($3 4 million of which was non-cash) was associated with the Tools & Hardware segment and the remainder was related to General Corporate During the fourth quarter of 2003, Cooper reduced estimates of the cost related to those actions by $ 1 5 million F-l 1 http //www sec.gov/Archives/edgar/data/1141982/000095012905001490/h22660el0vk htm 2/6/2006