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| Cooper Industries, Incorporated 2001 10-K Report (Partial 10-K shown; subscribers can see the entire 10-K report.) |
0000950129-02-000828.hdr.sgml : 20020221
ACCESSION NUMBER: 0000950129-02-000828
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20011231
FILED AS OF DATE: 20020220
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: COOPER INDUSTRIES INC
CENTRAL INDEX KEY: 0000024454
STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640]
IRS NUMBER: 314156620
STATE OF INCORPORATION: OH
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-01175
FILM NUMBER: 02554366
BUSINESS ADDRESS:
STREET 1: 600 TRAVIS STE 5800
STREET 2: CHASE TOWER
CITY: HOUSTON
STATE: TX
ZIP: 77002
BUSINESS PHONE: 7132098400
MAIL ADDRESS:
STREET 1: P O BOX 4446
CITY: HOUSTON
STATE: TX
ZIP: 77210
FORMER COMPANY:
FORMER CONFORMED NAME: COOPER BESSEMER CORP
DATE OF NAME CHANGE: 19710505
10-K405
1
h94230e10-k405.txt
COOPER INDUSTRIES INC - DECEMBER 31, 2001
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
---------------
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to __________
COMMISSION FILE NUMBER 1-1175
COOPER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
OHIO 31-4156620
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
600 TRAVIS, SUITE 5800, HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
713/209-8400
(Registrant's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
COMMON STOCK, $5 PAR VALUE THE NEW YORK STOCK EXCHANGE
PACIFIC EXCHANGE
RIGHTS TO PURCHASE PREFERRED STOCK THE NEW YORK STOCK EXCHANGE
PACIFIC EXCHANGE
SECURITIES REGISTERED PURSUANT TO
SECTION 12(g) OF THE ACT: NONE
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
The aggregate value of the registrant's voting stock held by
non-affiliates of the registrant as of January 31, 2002 was $3,345,382,140.75.
NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK AS OF
JANUARY 31, 2002 - 93,851,135
DOCUMENTS INCORPORATED BY REFERENCE
Cooper Industries, Inc. Proxy Statement to be filed
for the Annual Meeting of Shareholders
to be held on April 30, 2002 (Part III - Items 10, 11 and 12)
TABLE OF CONENTS
Page
----
Part I
Item 1: Business.................................................................. 2
Item 2: Properties................................................................ 2
Item 3: Legal Proceedings......................................................... 8
Item 4: Submission of Matters to a Vote of Security Holders....................... 9
Part II
Item 5: Market for Registrant's Common Equity and Related Stockholder Matters..... 10
Item 6: Selected Financial Data................................................... 11
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations..................................................... 12
Item 7A: Quantitative and Qualitative Disclosures about Market Risk................ 24
Item 8: Financial Statements and Supplementary Data............................... 24
Item 9: Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures..................................................... 24
Part III
Item 10: Directors and Executive Officers of the Registrant........................ 24
Item 11: Executive Compensation.................................................... 24
Item 12: Security Ownership of Certain Beneficial Owners and Management............ 24
Item 13: Certain Relationships and Related Transactions............................ 24
Part IV
Item 14: Exhibits, Financial Statements Schedules, and Reports on Form 8-K......... 25
PART I
ITEM 1. BUSINESS; ITEM 2. PROPERTIES
GENERAL
The term "Cooper" refers to the registrant, Cooper Industries, Inc.,
which was incorporated under the laws of the State of Ohio on January 8, 1919.
Cooper operates in two business segments: Electrical Products and Tools
& Hardware. Cooper manufactures, markets and sells its products and provides
services throughout the world. Cooper has manufacturing facilities in 21
countries and currently employs approximately 30,500 people. On December 31,
2001, the plants and other facilities used by Cooper throughout the world
contained an aggregate of approximately 20,192,100 square feet of space, of
which approximately 72 percent was owned and 28 percent was leased. The charts
on the next page show the number of employees, square footage of facilities
owned and leased and location of manufacturing facilities for each industry
segment. Certain equipment and production facilities have been financed by
industrial revenue bonds issued by local government authorities and are subject
to security arrangements customary in such financings.
2
SQUARE FOOTAGE OF
NUMBER AND NATURE OF FACILITIES PLANTS AND FACILITIES
------------------------------------------------- ---------------------
NUMBER OF
SEGMENT EMPLOYEES MANUFACTURING WAREHOUSE SALES OTHER OWNED LEASED
- ------- --------- ------------- --------- ----- ----- ----- ------
Electrical Products 23,660 88 51 114 12 10,335,000 4,865,100
Tools & Hardware 6,650 27 13 19 2 4,186,600 656,500
Other 210 -- -- 1 2 -- 148,900
------ --- -- --- -- ---------- ---------
Total 30,520 115 64 134 16 14,521,600 5,670,500
* Multi-purpose facilities at a single location are listed in each
applicable column.
MANUFACTURING PLANT LOCATIONS
EUROPE
UNITED (OTHER UNITED SOUTH REPUBLIC OF
SEGMENT STATES THAN UK) KINGDOM MEXICO AMERICA AUSTRALIA CANADA CHINA INDIA MALAYSIA
- ------- ------ -------- ------- ------ ------- --------- ------ ----- ----- --------
Electrical 47 11 11 10 3 1 2 1 1 1
Products
Tools & 14 8 -- 2 2 1 -- -- -- --
Hardware
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total 61 19 11 12 5 2 2 1 1 1
3
Operations in the United States are conducted by unincorporated
divisions and wholly-owned subsidiaries of Cooper, organized by the two business
segments. Activities outside the United States contribute significantly to the
revenues and operating earnings of both segments of Cooper. These activities are
conducted in major commercial countries by wholly-owned subsidiaries and
jointly-owned companies, the management of which is structured through Cooper's
two business segments. As a result of these international operations, sales and
distribution networks are maintained throughout most of the industrialized
world. Cooper generally believes that there are no substantial differences in
the business risks associated with these international operations compared with
domestic activities, although Cooper is subject to certain political and
economic uncertainties encountered in activities outside the United States,
including trade barriers, restrictions on foreign exchange and currency
fluctuations. As the U.S. dollar strengthens against foreign currencies at a
rate greater than inflation in those countries, Cooper may experience lower
segment revenues and operating earnings. The five countries in which Cooper
generates the most international revenues are Canada, Germany, France, Mexico
and the United Kingdom. Cooper has operations in India and Malaysia and has
several joint ventures with operations in China. Investments in India, Malaysia
and China are subject to greater risks related to economic and political
uncertainties as compared to most countries where Cooper has operations. Exhibit
21.0 contains a list of Cooper's subsidiaries.
Financial information with respect to Cooper's industry segments and
geographic areas is contained in Note 15 of the Notes to Consolidated Financial
Statements. A discussion of acquisitions and divestitures is included in Notes
2, 3, 7 and 17 of the Notes to Consolidated Financial Statements.
With its two business segments, Cooper serves three major markets:
industrial, construction and electrical power distribution. Markets for Cooper's
products and services are worldwide, though the United States is the largest
market. Within the United States, there is no material geographic concentration
by state or region. Cooper experiences substantial competition in both of its
business segments. The number and size of competitors vary considerably
depending on the product line. Cooper cannot specify with exactitude the number
of competitors in each product category or their relative market position.
However, most operating units experience significant competition from both
larger and smaller companies with the key competitive factors being price,
quality, brand name and availability. Cooper considers its reputation as a
manufacturer of a broad line of quality products and premier brands to be an
important factor in its businesses. Cooper believes that it is among the leading
manufacturers in the world of electrical distribution equipment, wiring devices,
support systems, hazardous duty electrical equipment, emergency lighting,
lighting fixtures, fuses, nonpower hand tools and industrial power tools.
Cooper's research and development activities are for purposes of
improving existing products and services and originating new products. During
2001, approximately $55.8 million was spent for research and development
activities as compared with approximately $57.7 million in 2000 and $54.0
million in 1999. Cooper obtains and holds patents on products and designs in the
United States and many foreign countries where operations are conducted or
products are sold. Although in the aggregate Cooper's patents are important in
the operation of its businesses, the loss by expiration or otherwise of any one
patent or license or group of patents or licenses would not materially affect
its business.
Cooper does not presently anticipate that compliance with currently
applicable environmental regulations and controls will significantly change its
competitive position, capital spending or earnings during 2002. Cooper has been
a party to administrative and legal proceedings with governmental agencies that
have arisen under statutory provisions regulating the discharge or potential
discharge of material into the environment. Orders and decrees consented to by
Cooper have contained agreed-upon timetables for fulfilling reporting or
remediation obligations or maintaining specified air and water discharge levels
in connection with permits for the operations of various plants. Cooper believes
it is in compliance with the orders and decrees, and such compliance is not
material to the business or financial condition of Cooper. For additional
information concerning Cooper's accruals for environmental liabilities, see Note
7 of the Notes to Consolidated Financial Statements.
4
Approximately 54% of the United States hourly production work force of
Cooper is employed in 49 manufacturing facilities, distribution centers and
warehouses not covered by labor agreements. Numerous agreements covering
approximately 46% of all hourly production employees exist with 24 bargaining
units at 24 operations in the United States and with various unions at 30
international operations. During 2001, new agreements were concluded covering
hourly production employees at 7 operations in the United States. Cooper
considers its employee relations to be excellent.
Sales backlog at December 31, 2001 was approximately $308 million, all
of which is for delivery during 2002, compared with backlog of approximately
$456 million at December 31, 2000.
Cooper's financial condition and performance are subject to various
risks and uncertainties including, but not limited to: (1) the condition of the
domestic economy and European and Latin American markets; (2) spending on
commercial and residential construction and by utilities; (3) worldwide
energy-related project spending; (4) demand for products in the electronics and
telecommunications markets; (5) raw material and energy costs; (6) mix of
products sold; (7) realization of benefits of cost reduction programs; (8)
competitive conditions; (9) the relationship of the U.S. dollar to the
currencies of countries in which Cooper does business; and (10) mergers and
acquisitions and their integration into Cooper.
The following describes the business conducted by each of Cooper's
business segments. Additional information regarding the products, markets and
distribution methods for each segment is set forth on the table at the end of
this Item. Information concerning market conditions, as well as information
concerning revenues and operating earnings for each segment, is included under
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."
ELECTRICAL PRODUCTS
The Electrical Products segment manufactures, markets and sells
electrical and circuit protection products, including fittings, support systems,
enclosures, wiring devices, plugs, receptacles, lighting fixtures, fuses,
emergency lighting, fire detection systems and security products for use in
residential, commercial and industrial construction, maintenance and repair
applications. The segment also manufactures, markets and sells products for use
by utilities and in industry for electrical power transmission and distribution,
including distribution switchgear, transformers, transformer terminations and
accessories, capacitors, voltage regulators, surge arresters, pole line hardware
and other related power systems components.
The principal raw material requirements include copper, tin, lead,
plastics, insulating materials, pig iron, aluminum ingots, steel, aluminum and
brass. These raw materials are available from and supplied by numerous sources
located in the United States and abroad.
Demand for Electrical Products follows general economic conditions and
is generally sensitive to activity in the construction market, industrial
production levels, electronic component production and spending by utilities for
replacements, expansions and efficiency improvements. The segment's product
lines are marketed directly to original equipment manufacturers and utilities
and to a variety of end users through major distributor chains, retail home
centers and thousands of independent distributors.
TOOLS & HARDWARE
The Tools & Hardware segment manufactures, markets and sells hand tools
for industrial, construction and consumer markets; automated assembly systems
for industrial markets; and electric and pneumatic industrial power tools for
general industry, primarily automotive and aerospace manufacturers.
5
The principal raw material requirements include flat and bar stock
steel, brass, copper, tin plate, fiberglass, aluminum, iron castings, wood,
plastic pellets and plastic sheet. These materials are available from and
supplied by numerous sources in the United States and abroad.
Demand for nonpowered hand tools, assembly systems and industrial power
tools is driven by employment levels and industrial activity in major industrial
countries and by consumer spending. In addition, demand for industrial power
tools is influenced by automotive and aerospace production. The segment's
products are sold by a company sales force, independent distributors and
retailers.
6
COOPER INDUSTRIES, INC.
PRODUCTS, MARKETS AND DISTRIBUTION METHODS BY SEGMENT
ELECTRICAL PRODUCTS
MAJOR PRODUCTS AND BRANDS*
ARKTITE plugs and receptacles. JSB, LUMINOX and MENVIER emergency lighting and fire
detection systems.
ARROW-HART wiring devices.
KARP, EDISON, MERCURY and B&S electrical fuses.
ATLITE indoor commercial lighting.
KEARNEY fuses, connectors, tools and switches.
B-LINE support systems, enclosures, fasteners.
KYLE distribution switchgear.
BLESSING, CSA, PRETRONICA and UNIVEL emergency lighting and
power systems. LOW-PEAK electric fuses.
BUSSMANN and BUSS electrical and electronic fuses. LUMIERE specification grade landscape lighting.
CAM-LOK electrical connectors. MAGNUM terminal strips and disconnect blocks.
CAPRI-CODEC cable accessories and flexible conduits. MCGRAW-EDISON and LUMARK indoor and outdoor lighting.
CEAG emergency lighting systems. METALUX fluorescent lighting.
CHAMP and HAZARD-GARD HID and fluorescent lighting. MINI-LINE molded-to-cable miniature connectors.
COILTRONICS inductors and transformers. MOLDED PRODUCTS connectors and systems.
COMBINED TECHNOLOGIES current-limiting fuses. MWS modular wiring systems.
CONDULET fittings and outlet bodies. MYERS electrical hubs.
COOPER POWER SYSTEMS distribution transformers, power NOVA reclosers, sectionalizers and switches.
capacitors, voltage regulators, surge arresters, pole
line hardware and SCADA master stations. OPTIANCE fiber optic lighting.
COOPER WIRING DEVICES circuit protective devices. PORTFOLIO architectural recessed lighting.
CORELITE and NEO-RAY indirect lighting products. POSI-LOK electrical panel units.
CROMPTON lighting fixtures and specialty lamps. POWERPLUS panel boards.
CROUSE-HINDS and CEAG electrical construction materials and POWERSTOR carbon aerogel supercapacitors.
CROUSE-HINDS aviation lighting products.
REGALSAFE signaling and life saving apparatus.
DLS electrical wiring and control systems.
REGENT security lighting systems.
EAGLE wiring devices, sockets and switches.
ROYER wiring devices, sockets and switches.
EDISON and EDISON PRO relays.
MCGRAW-EDISON and RTE transformer components, cable
ELETROMEC DIN style fuses. accessories and fuses.
EMERALD consumer recessed and track lighting. SCANTRONIC and MENVIER security systems.
EMSA power transformers. SHAPER specification and commercial grade lighting
fixtures.
ENKLOSURES electrical enclosures.
SPECONE controls, lighting, plugs and receptacles.
ENVIROTEMP dielectric fluids.
STREETWORKS outdoor lighting.
FAIL-SAFE high abuse, clean room and vandal-resistant
lighting fixtures. SURE-LITES and ATLITE exit and emergency lighting.
FULLEON, NUGELEC and TRANSMOULD fire detection systems. TERMINATOR metal clad cable connectors.
FUSETRON electric fuses and protectors. THEPITT electrical outlet and switch boxes.
HALO recessed and track lighting fixtures. TRANSX transient voltage protection devices.
IRIS lighting systems. ULTRASIL surge arresters.
USL sports lighting.
WILLSHER & QUICK electrical enclosures.
TOOLS & HARDWARE
MAJOR PRODUCTS AND BRANDS*
AIRETOOL, ASSEMBLY SYSTEMS, BUCKEYE, CLECO, COOPER AUTOMATION, LUFKIN measuring tapes.
DGD, DOLER, DOTCO, GARDNER-DENVER, GARDOTRANS, QUACKENBUSH,
ROTOR TOOL and RECOULES industrial power tools and assembly MASTER POWER industrial air tools.
equipment.
METRONIX servos and drive controls.
APEX and GETA screwdriver bits, impact sockets and universal
joints. NICHOLSON files and saws.
CAMPBELL chain products. PLUMB hammers.
CRESCENT pliers and wrenches. UTICA torque measuring and controls.
DIAMOND farrier tools and horseshoes. WELLER soldering equipment.
EREM precision cutters and tweezers. WIRE-WRAP solderless connection equipment.
KAHNETICS dispensing systems. WISS and H.K. PORTER cutting products.
KME industrial tools and machines. XCELITE screwdrivers and nutdrivers.
- ----------
* Brand names appearing in bold type are registered trademarks in the
United States or abroad of Cooper Industries, Inc. or its subsidiaries,
except the following which are unregistered trademarks: Assembly
Systems, AtLite, Blessing, B&S, Capri-Codec, Combined Technologies,
Cooper Automation, Cooper Wiring Devices, Corelite, CSA, DLS, Edison
Pro, EnKlosures, Geta, Hazard-Gard, KME, Luminox, Metronix, Mini-Line,
Molded Products, Myers, Neo-Ray, Nugelec, Optiance, Portfolio,
Powerplus, PowerStor, Pretronica, Regalsafe, SpecOne, Streetworks,
Terminator, Thepitt, Transmould, TransX, Univel, USL and Willsher &
Quick. Gardner-Denver is a registered trademark of Gardner Denver
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