Document g2g491KdpOOKO559DpY6DJx69

elOvk Page 24 of 84 Table of Contents The following table reflects activity related to the fourth quarter 2001 severance, facility consolidation and closure and financial advisors and other cost accruals A total of 77 salaried and 196 hourly positions were eliminated as a result of these consolidation activities Balance at December 31, 2001 Employees terminated Cash expenditures Balance at December 31, 2002 Reversal of accrual Balance at December 31, 2003 Number of Employees 273 (273) -- -- -- -- Accrued Severance $ 30 -- (3 0) -- -- $-- Facilities Consolidation and Closure ($ in millions) $ 21 Financial Advisors and Other $ 30 0 -- (2 1) -- (15 7) -- 14 3 -- (14 3) $ --$ -- Cash provided by operating activities was the source for funding the expenditures During the second quarter of 2003, the terms of the agreements with the financial advisors expired with the contingent events that required payment not occurring Accordingly, the accrual was reversed and reflected as a $14 3 million negative restructuring charge ($8 6 million, net of taxes) on the consolidated income statement See Note 2 of the Notes to the Consolidated Financial Statements for additional information on restructuring charges General Corporate Expense General Corporate expense was $77 3 million m 2004, compared to $66 1 million in 2003 Included m General Corporate expense in 2003 was a $0 9 million restructuring charge offset by a $14 3 million reversal of a previously accrued restructuring charge Also included in 2003 General Corporate expense was a $12 0 million discretionary contribution to the Cooper Industries Foundation Excluding the net restructuring amount and the contribution from 2003, General Corporate expense increased $9 8 million over 2003 The increase in General Corporate expense was primarily due to higher incentive and stock-based compensation expenses and the audit and other costs associated with compliance with the regulations enacted in the Sarbanes-Oxley Act of 2002 General Corporate expense was $66 1 million in 2003, compared to $36 5 million in 2002 Included in General Corporate expense in 2003 was a $0 9 million restructuring charge and a $14 3 million reversal of a previously accrued restructuring charge General Corporate expense in 2002 included a $2 4 million restructuring charge Excluding these charges in both years, General Corporate expense increased $45 4 million in 2003 compared to 2002 During 2002, General Corporate expense was reduced by income of $12 0 million under an agreement with Belden, Inc ("Belden") In 1993, Cooper completed an initial public offering of the stock of Belden, formerly a division of Cooper Under the agreement, Belden and Cooper made an election that increased the tax basis of certain Belden assets Belden is required to pay Cooper ninety percent of the amount by which Belden has actually reduced tax payments that would otherwise have been payable if the increase in the tax basis of assets had not occurred, as realized on a quarterly basis over substantially fifteen years If Belden does not have sufficient future taxable income, it is possible that Belden will not be able to utilize the tax deductions arising from the increases m the tax basis of the assets resulting in a tax loss carryforward Belden can carry any loss forward twenty years to offset future taxable income Cooper concluded that, for 2003 and 2004, no income should be recognized under the agreement Also, m 2003 Cooper made a discretionary $12 0 million contribution to the Cooper Industries Foundation, which will be used to fulfill commitments to match future employee contributions to non-profit organizations and corporate contributions No such discretionary contribution was made in 2002 The remaining General Corporate expense increase resulted primarily from increased employee benefit-related expenses, pension expense and stock-based compensation expense Interest Expense, Net Interest expense, net decreased $6 0 million in 2004 compared to 2003 Slightly lower average interest rates on debt and an increase in interest income earned on higher cash and cash equivalent balances resulted in the decrease from prior year Average debt balances in each year were 20 http://www sec gov/Archives/edgar/data/1141982/000095012905001490/h22660el0vk htm 2/6/2006