Document vBxQra2pb94Zw4dKnaY4On3Z9

including machinery and equipment modernization and enhancement, toolmg and computer hardware and software projects, 19% for new product development, 12% for capacity expansion, 4% related to environmental matters, and 4% for other items Interest Rate and Foreign Currency Risk Changes in interest rates and foreign currency exchange rates affect Cooper's earnings and cash flows As a result of havmg sales, purchases and certain intercompany transactions denominated in currencies other than the functional currencies used by Cooper's businesses, Cooper is exposed to the effect of foreign exchange rate changes on its cash flows and earnings Cooper enters mto foreign currency forward exchange contracts to hedge significant foreign currency denominated transactions for periods consistent with the terms of the underlying transactions Contracts generally have maturities that do not exceed one year The table below provides information about Cooper's financial instruments at December 31, 2001 that are sensitive to changes m interest rates The table presents principal cash flows by expected maturity dates and weighted average mterest rates for debt obligations Long-term debt Fixed rate Average interest rate Variable rate Average interest rate 2002 2003 2004 2005 2006 (in millions, where applicable) Thereafter Total $ 60 9 6 4% $2 6% $ 153 6 6 4% $2 6% $ 04 6 5% $280 0 2 6% $501 2 6 4% $ 24 7 2 6% $ 114 6 4% $ 65 2 3% $ 107 9 $ 835 4 6 4% 6 4% $ 21 3 $ 332 5 2 3% 2 6% The table below provides information about Cooper's foreign currency forward exchange contracts m excess of $5 million at December 31, 2001 The contracts mature during 2002 All amounts are presented m U S dollar equivalents. The table presents the notional amounts and the weighted average contractual exchange rates These notional amounts are used to calculate the contractual payments exchanged under the contracts U S Dollar Functional Currency 2002 (m millions, where applicable) Buy Euros / Sell U S Dollars Notional amount Average contract rate $ 74 0 8992 The table below provides information about Cooper's financial instruments at December 31,2000 that are sensitive to changes in mterest rates The table presents principal cash flows by expected maturity dates and weighted average mterest rates for debt obligations Long-term debt Fixed rate Average interest rate Variable rate Average mterest rate 2001 2002 2003 2004 2005 (in millions, where applicable) Thereafter Total $ 50 6 6 3% $ 05 6 7% $ 61 5 6 3% $ 05 6 7% $ 153 8 6 4% $ 05 6 7% $ 05 6 5% $400 5 6 7% $510 5 6 4% $ 25 7 5 7% $ 1195 6 5% $ 27 8 5 7% $896 4 6 3% $455 5 6 7% 22