Document wrxwbrdgvXk491w6jOYYyV3ed

COOPER INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Gams or losses on derivative instruments are reported m the same lme item as the underlying hedged transaction in the consolidated statements of mcome At December 31, 2001, Cooper expects to reclassify $0 3 million of net losses on derivative instruments designated as cash flow hedges from accumulated nonowner changes m equity to earnings during the next twelve months The amount of discontinued cash flow hedges during 2001 was not material The table below summarizes, by currency, the U S dollar equivalent contractual amounts of Cooper's forward exchange contracts at December 31, 2001 and 2000 _______ December 31, 2001 2000 (m millions) British Pound Sterling . $ 08 $ 17 6 Euro 85 15 1 Mexican Peso 44 22 Swiss Franc Australian Dollar 29 27 . . 22 Norwegian Krone 15 - Other 20 1 2 $ 20 1 $ 41 0 Other Instruments In the normal course of business, Cooper executes letters of credit, performance bonds and other guarantees that ensure Cooper's performance or payment to third parties that are not reflected m the consolidated balance sheets The aggregate notional value of these instruments was $112 0 million and $1119 million at December 31, 2001 and 2000, respectively. In the past, no significant claims have been made against these financial instruments. Management believes the likelihood of demand for payment under these instruments is minimal and expects no material losses to occur m connection with these instruments The following transactions were implemented to partially align Cooper's mterest rate exposure profile with its short term mterest rate expectations in an economically efficient manner that is consistent with its tax position During 2001, Cooper sold at a premium U S Treasury securities due November 2002 Cooper obtained these securities pursuant to a repurchase agreement containing provisions that limit Cooper's mterest rate exposure under this agreement to a maximum cost of $7 0 million The repurchase agreement will be settled immediately pnor to the maturity of the securities Settlement of this transaction will not require any financing by Cooper and this transaction does not create an asset or liability, other than as described above The face amount of the securities was $10 billion 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 potential cost under the securities loan agreement and realized a gam of approximately $1 9 million The securities loan agreement will be settled immediately pnor to the matunty of the notes Settlement of this transaction will not require any financing by Cooper and this transaction does not create a liability The face amount of the notes was $480 million In 1999 Cooper entered into a similar executory contract Upon settlement of the contract m 2000, Cooper realized a $7 3 million cost, its maximum exposure under the 1999 executory contract F-25