Cooper Industries Reports Record Second Quarter; Continuing Earnings of $1.27 Per Share, Up 25 Percent

Cooper Industries, Ltd. (NYSE:CBE) today reported second quarter2006 earnings per share from continuing operations of $1.27 (diluted),an increase of 25 percent compared with $1.02 earnings per share forthe second quarter of 2005. Second quarter 2006 revenues increased 8percent to $1.29 billion, compared with $1.19 billion for the sameperiod last year. Income from continuing operations rose 23 percent to$119.8 million, compared with the prior year amount of $97.3 million.

"With a second consecutive record quarter, our businesses continueto deliver excellent results, powered by strong core demand in keyserved markets, including industrial, utility and commercialconstruction, plus a growing global economy," said Cooper IndustriesChairman, President and Chief Executive Officer Kirk S. Hachigian."This quarter is again characterized by good execution oncustomer-focused initiatives, including marketing programs, newproduct introductions, continued global expansion and increasedproductivity and service, all of which contribute to organic growth,increased margins and strong cash flow."

As previously announced, the Company and other parties involved inthe resolution of the Federal-Mogul Corporation ("FMC") bankruptcyproceedings reached a revised agreement regarding Cooper'sparticipation in FMC's 524(g) asbestos claimants' trust. In light ofthe revised agreement, the Company recognized an after-taxdiscontinued operations charge in the 2006 second quarter of $20.3million, or $.21 per diluted share. Inclusive of the charge, netincome for the second quarter of 2006 was $99.5 million, or $1.06 pershare, compared with $97.3 million, or $1.02 per share, for the prioryear's second quarter.

"Cooper's financial position remains very strong. The Company'sdebt-to-total capitalization ratio, net of cash at June 30, 2006, was22.6 percent, compared with 24.0 percent at the same time last year,"said Hachigian.

Revenues for the first six months of 2006 were $2.53 billion, an 8percent increase from the $2.33 billion in revenues for the first sixmonths of 2005. Earnings per share from continuing operations for thefirst six months of 2006 were $2.41, compared with $1.94 for the sameperiod in 2005, an increase of 24 percent. Income from continuingoperations for the first six months of 2006 rose 23 percent to $227.5million, compared with $185.1 million for the first six months of lastyear.

Segment Results

Electrical Products segment revenues for the second quarter of2006 increased 9 percent to $1.10 billion, compared with $1.01 billionin the second quarter of 2005. Recent acquisitions contributedapproximately 2 percent to the year-over-year growth. Favorablecurrency translation had a negligible impact on the second quarter.Segment operating earnings were $177.5 million, an increase of 20percent from $148.2 million in the prior year's second quarter.Segment operating margin improved 140 basis points to 16.1 percent forthe second quarter of 2006.

The increase in revenues for the Electrical Products segmentreflects continued strong growth in industrial and utility markets,and improved activity in commercial markets. Sales to the retailchannel were soft, against very strong comparables in the secondquarter of 2005.

Electrical Products segment revenues for the first half of 2006grew 9 percent to $2.16 billion, compared with $1.98 billion in 2005.Segment operating earnings for the first six months increased 19percent to $337.6 million compared with $283.6 million for the sameperiod last year.

Tools segment revenues for the second quarter of 2006 increased 3percent to $184.3 million, compared with 2005 second quarter revenuesof $178.6 million. Currency translation increased revenuesapproximately 1 percent in the quarter. Segment operating earnings forthe period were $19.6 million, an increase of 24 percent, comparedwith $15.8 million for the second quarter of 2005. Segment operatingmargin for the second quarter of 2006 improved 180 basis points to10.6 percent, compared with 8.8 percent for the same period last year.The increase in revenues in the Tools segment reflects improved demandfor both hand and power tools from industrial markets, and increasedshipments of assembly equipment.

Revenues for the first six months of 2006 increased 3 percent to$364.6 million, compared with $355.1 million for the same period lastyear. Segment operating earnings for the first half of 2006 grew 21percent to $36.9 million, compared with $30.5 million in theprior-year period.

Outlook

"While recent political events and higher interest rates are aconcern, the worldwide economic environment remains strong, and ourbusiness performance remains on track, which provides us with cautiousoptimism for the remainder of 2006," said Hachigian. "The globalenergy infrastructure continues to grow, with solid demand fromutilities and the industrial sector, and improving nonresidentialconstruction offsetting slower residential construction. Whilecommodity pricing and energy continue to drive cost pressures, ourinitiatives provide the foundation for the Company to deliver recordearnings.

"We now expect 2006 revenues to increase in the range of 7 to 9percent, with earnings per share from continuing operations between$4.90 and $5.05, an increase of $ .15 per share from the Company'sprevious outlook. This represents a 19 to 23 percent increase,compared with full-year results for 2005. Third quarter 2006 revenueincreases are expected to be in the range of 7 to 9 percent, withearnings per share of $1.28 to $1.35."

About Cooper Industries

Cooper Industries, Ltd. is a global manufacturer of electricalproducts and tools, with 2005 revenues of $4.7 billion, approximately30 percent of which are international sales. Incorporated in Bermudawith administrative headquarters in Houston, Cooper employsapproximately 29,000 people and operates eight divisions: CooperB-Line, Cooper Bussmann, Cooper Crouse-Hinds, Cooper Lighting, CooperMenvier, Cooper Power Systems, Cooper Wiring Devices and Cooper ToolsGroup. Cooper Connection provides a common marketing and sellingplatform for Cooper's sales to electrical distributors. For moreinformation, visit the website at www.cooperindustries.com.

Comparisons of 2006 and 2005 second quarter and year-to-dateresults appear on the following pages.

Statements in this news release are forward looking under thePrivate Securities Litigation Reform Act of 1995. Forward-lookingstatements include, but are not limited to, statements regarding theCompany's earnings outlook. These statements are subject to variousrisks and uncertainties, many of which are outside the control of theCompany, and actual results may differ materially from anticipatedresults. Important factors which may affect the actual resultsinclude, but are not limited to: 1) competitive pressures and futureglobal economic conditions, including the level of market demand forthe Company's products; 2) changes in raw material, transportation andenergy costs; 3) the ability to execute and realize the expectedbenefits from strategic initiatives including revenue growth plans,and cost-control and productivity improvement programs; 4) anydisruptions from manufacturing rationalizations and the implementationof the Enterprise Business System; 5) mergers and acquisitions, andtheir integration; 6) political developments; 7) changes in financialmarkets including currency exchange fluctuations; 8) changes inlegislation and regulations including changes in the tax laws, taxtreaties or tax regulations; 9) the timing and amount of sharerepurchases by the Company; and 10) the resolution of potentialliability exposure resulting from Federal-Mogul Corporation'sbankruptcy filing.

Conference Call

Cooper will hold a conference call today at 12:00 noon EDT toprovide shareholders and other interested parties an overview of theCompany's second quarter 2006 performance. Those interested in hearingthe conference call may listen via telephone by dialing 866-510-0712,using pass code 77723553, or over the Internet through the InvestorCenter section of the Company's website, using the "ManagementPresentations" link. International callers should dial 617-597-5380and use pass code 77723553.

A replay briefing will be available by telephone until 11:00 p.m.EDT on July 27, 2006, and over the Internet through August 3, 2006.The telephone number to access the replay is 888-286-8010, and thepass code is 53271922. International callers should dial 617-801-6888and use the same pass code.

The conference call may include non-GAAP financial measures.Cooper will post a reconciliation of those measures to the mostdirectly comparable GAAP measures in the Investor Center section ofthe Company's website under the heading "Management Presentations."

Informational exhibits concerning the Company's second quarterperformance that may be referred to during the conference call will beavailable in the Investor Center section of the Company's websiteunder the heading "Management Presentations" prior to the beginning ofthe call.
CONSOLIDATED RESULTS OF OPERATIONS

Quarter Ended June 30,
-------------------------
2006 2005
------------ ------------
(in millions where
applicable)

Revenues $1,287.8 $1,189.2

Cost of sales 870.3 814.7
Selling and administrative expenses 244.3 232.9
------------ ------------
Operating earnings 173.2 141.6

Interest expense, net 12.4 17.7
------------ ------------
Income from continuing operations before
income taxes 160.8 123.9
Income taxes 41.0 26.6
------------ ------------
Income from continuing operations 119.8 97.3
Charge related to discontinued operations 20.3 -
------------ ------------

Net income $99.5 $97.3
============ ============

Net Income Per Common share:
Basic:
Continuing operations $1.30 $1.05
Discontinued operations charge .22 --
------------ ------------
Net income $1.08 $1.05
============ ============

Diluted:
Continuing operations $1.27 $1.02
Discontinued operations charge .21 --
------------ ------------
Net income $1.06 $1.02
============ ============

Shares Utilized in Computation of Income Per
Common Share:
Basic 92.2 million 93.0 million
Diluted 94.2 million 95.4 million


PERCENTAGE OF REVENUES

Quarter Ended June 30,
-------------------------
2006 2005
------------ ------------

Revenues 100.0% 100.0%
Cost of sales 67.6% 68.5%
Selling and administrative expenses 19.0% 19.6%
Operating earnings 13.4% 11.9%
Income from continuing operations before
income taxes 12.5% 10.4%
Income from continuing operations 9.3% 8.2%


CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Quarter Ended June 30
Segment Information

Quarter Ended June 30,
-------------------------
2006 2005
------------ ------------
(in millions)

Revenues:
Electrical Products $1,103.5 $1,010.6
Tools 184.3 178.6
------------ ------------
Total $1,287.8 $1,189.2
============ ============

Segment Operating Earnings:
Electrical Products $177.5 $148.2
Tools 19.6 15.8
------------ ------------
Total Segment Operating Earnings 197.1 164.0

General Corporate Expense 23.9 22.4
Interest expense, net 12.4 17.7
------------ ------------
Income from continuing operations before
income taxes $160.8 $123.9
============ ============


Quarter Ended June 30,
-------------------------
2006 2005
------------ ------------

Return on Sales:
Electrical Products 16.1% 14.7%
Tools 10.6% 8.8%
Total Segments 15.3% 13.8%


CONSOLIDATED RESULTS OF OPERATIONS

Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------
(in millions where
applicable)

Revenues $2,528.7 $2,334.0

Cost of sales 1,717.1 1,602.3
Selling and administrative expenses 481.8 460.4
------------ ------------
Operating earnings 329.8 271.3

Interest expense, net 24.5 35.5
------------ ------------
Income from continuing operations before
income taxes 305.3 235.8
Income taxes 77.8 50.7
------------ ------------
Income from continuing operations 227.5 185.1
Charge related to discontinued operations 20.3 -
------------ ------------

Net Income $207.2 $185.1
============ ============

Net Income Per Common share:
Basic:
Continuing operations $2.47 $1.99
Discontinued operations charge .22 --
------------ ------------
Net income $2.25 $1.99
============ ============

Diluted:
Continuing operations $2.41 $1.94
Discontinued operations charge .21 --
------------ ------------
Net income $2.20 $1.94
============ ============

Shares Utilized in Computation of Income Per
Common Share:
Basic 92.2 million 93.0 million
Diluted 94.3 million 95.5 million


PERCENTAGE OF REVENUES

Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------

Revenues 100.0% 100.0%
Cost of sales 67.9% 68.7%
Selling and administrative expenses 19.1% 19.7%
Operating earnings 13.0% 11.6%
Income from continuing operations before
income taxes 12.1% 10.1%
Income from continuing operations 9.0% 7.9%


CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Six Months Ended June 30
Segment Information

Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------
(in millions)

Revenues:
Electrical Products $2,164.1 $1,978.9
Tools 364.6 355.1
------------ ------------
Total $2,528.7 $2,334.0
============ ============

Segment Operating Earnings:
Electrical Products $337.6 $283.6
Tools 36.9 30.5
------------ ------------
Total Segment Operating Earnings 374.5 314.1

General Corporate Expense 44.7 42.8
Interest expense, net 24.5 35.5
------------ ------------
Income from continuing operations before
income taxes $305.3 $235.8
============ ============


Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------

Return on Sales:
Electrical Products 15.6% 14.3%
Tools 10.1% 8.6%
Total Segments 14.8% 13.5%


CONSOLIDATED BALANCE SHEETS
(PRELIMINARY)

June 30, Dec. 31,
------------ ------------
2006 2005
------------ ------------
(in millions)

ASSETS
Cash and cash equivalents $350.2 $452.8
Receivables 961.6 842.4
Inventories 631.1 538.7
Deferred income taxes and other assets 273.4 297.2
------------ ------------
Total current assets 2,216.3 2,131.1
------------ ------------
Property, plant and equipment, less
accumulated depreciation 664.8 673.7
Goodwill 2,181.2 2,084.0
Deferred income taxes and other noncurrent
assets 284.4 326.3
------------ ------------
Total assets $5,346.7 $5,215.1
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt $6.4 $7.6
Accounts payable 469.6 427.8
Accrued liabilities 479.9 518.0
Current discontinued operations liability 218.7 196.3
Current maturities of long-term debt 11.6 11.4
------------ ------------
Total current liabilities 1,186.2 1,161.1
------------ ------------
Long-term debt 1,000.8 1,002.9
Postretirement benefits other than pensions 154.8 163.0
Long-term discontinued operations liability 330.0 330.0
Other long-term liabilities 389.6 352.9
------------ ------------
Total liabilities 3,061.4 3,009.9
------------ ------------
Common stock 0.9 0.9
Capital in excess of par value 306.8 383.2
Retained earnings 2,135.7 1,997.4
Accumulated other nonowner changes in equity (158.1) (176.3)
------------ ------------
Total shareholders' equity 2,285.3 2,205.2
------------ ------------
Total liabilities and shareholders' equity $5,346.7 $5,215.1
============ ============


RATIOS OF DEBT-TO-TOTAL CAPITALIZATION
AND NET DEBT-TO-TOTAL CAPITALIZATION
(PRELIMINARY)

June 30, Dec. 31,
------------ ------------
2006 2005
------------ ------------
(in millions where
applicable)

Short-term debt $6.4 $7.6
Current maturities of long-term debt 11.6 11.4
Long-term debt 1,000.8 1,002.9
------------ ------------
Total debt 1,018.8 1,021.9
Total shareholders' equity 2,285.3 2,205.2
------------ ------------
Total capitalization $3,304.1 $3,227.1
============ ============

Total debt-to-total-capitalization ratio 30.8% 31.7%

Total debt $1,018.8 $1,021.9
Less cash and cash equivalents 350.2 452.8
------------ ------------
Net debt 668.6 569.1
============ ============
Total capitalization 3,304.1 3,227.1
Less cash and cash equivalents 350.2 452.8
------------ ------------
Total capitalization net of cash $2,953.9 $2,774.3
============ ============

Net debt-to-total-capitalization ratio 22.6% 20.5%


CONSOLIDATED STATEMENTS OF CASH FLOWS
(PRELIMINARY)

Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------
(in millions)

Cash flows from operating activities:
Net income $207.2 $185.1
Plus: charge for discontinued operations 20.3 -
------------ ------------
Income from continuing operations 227.5 185.1
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 54.6 57.5
Deferred income taxes 10.8 5.3
Excess tax benefits from stock options
and awards (19.8) -
Restructuring charge payments - (0.4)
Changes in assets and liabilities(1)
Receivables (100.2) (74.9)
Inventories (76.3) (69.4)
Accounts payable and accrued
liabilities (18.0) 14.0
Other assets and liabilities, net 97.4 64.2
------------ ------------
Net cash provided by operating
activities 176.0 181.4
------------ ------------
Cash flows from investing activities:
Capital expenditures (40.2) (47.9)
Cash paid for acquired businesses (84.2) (2.4)
Proceeds from sales of property, plant and
equipment and other 4.8 4.3
------------ ------------
Net cash used in investing activities (119.6) (46.0)
------------ ------------
Cash flows from financing activities:
Repayments of debt (2.1) (117.9)
Dividends (68.9) (69.4)
Subsidiary purchase of parent shares (185.4) (77.2)
Excess tax benefits from stock options and
awards 19.8 -
Activity under employee stock plans and
other 69.9 41.2
------------ ------------
Net cash used in financing activities (166.7) (223.3)
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 7.7 (27.9)
------------ ------------
Decrease in cash and cash equivalents (102.6) (115.8)
Cash and cash equivalents, beginning of
period 452.8 652.8
------------ ------------
Cash and cash equivalents, end of period $350.2 $537.0
============ ============
(1) Net of the effects of translation and
acquisitions


Free Cash Flow Reconciliation

Three Months Ended June
30,
-------------------------
2006 2005
------------ ------------
(in millions)

Net cash provided by operating activities $150.4 $161.2
Less capital expenditures (23.5) (28.0)
Add proceeds from sales of property, plant
and equipment and other 4.6 3.8
------------ ------------
Free cash flow $131.5 $137.0
============ ============