Document oZw3Xyez3q2V1qXyBX0MyawE

elOvk Page 34 of 84 Table of Contents U S Dollar Functional Currency Buy Mexican Pesos / Sell U S Dollars Notional amount Average contract rate 2004 (in millions, where applicable) $ 92 0855 The following transactions were implemented to partially align Cooper's interest rate exposure profile with its short term interest rate expectations in an economically efficient manner that is consistent with its tax position During 2002, Cooper sold at a premium U S Treasury securities due August 15, 2003 with a face amount of $750 million Cooper obtained these securities pursuant to a repurchase agreement containing provisions that limited Cooper's interest rate exposure under this agreement to a maximum amount of $7 2 million During the fourth quarter of 2002, Cooper settled the interest rate exposure with a cash payment of $7 0 million which was funded with cash provided by operatmg activities During 2001, Cooper sold at a premium U S Treasury securities due November 2002 with a face amount of $1 0 billion Cooper obtained these securities pursuant to a repurchase agreement containing provisions that limited Cooper's interest rate exposure under this agreement to a maximum amount of $7 0 million During the second quarter of 2002, Cooper settled the interest rate exposure with a cash payment of $6 0 million, which was funded with cash provided by operating activities The repurchase agreements were settled immediately prior to the maturity of the securities Settlement of these transactions did not require any financing by Cooper and the transactions did not create an asset or liability, other than as described above Also during 2001, Cooper purchased at a discount Federal Home Loan Mortgage Corporation Notes due February 2003 and immediately transferred these notes pursuant to a securities loan agreement Subsequently, Cooper eliminated any interest rate exposure under the securities loan agreement and received a cash payment of approximately $1 9 million upon maturity of the notes The securities loan agreement was settled immediately prior to the maturity of the notes Settlement of this transaction will not require any financing by Cooper and this transaction did not create a liability The face amount of the notes was $480 million See Note 17 of the Notes to the Consolidated Financial Statements for additional information regarding the fair value of Cooper's financial instruments Recently Issued Accounting Standards See Note 1 of the Notes to the Consolidated Financial Statements ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this Item is included under "Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations " ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Cooper's consolidated financial statements, together with the report thereon of Ernst & Young LLP and the supplementary financial data are set forth on pages F-l through F-40 hereof (See Item 15 for Index) ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable 29 http.//www sec gov/Archives/edgar/data/1141982/000095012905001490/h22660el0vk.htm 2/6/2006