110157602.xls.

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COOPER INDUSTRIES, INC.

Harvard Business School Case Software 2-292-707 Copyright (c) 1989 by the President and Fellows of Harvard College. Developed in conjunction with MicroMentor, Inc., Cambridge, MA. This case was prepared as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.
This worksheet contains the data from the following exhibits:

Exhibit 1: Exhibit 2: Exhibit 3: Exhibit 4: Exhibit 5: Exhibit 6: Exhibit 7: Exhibit 8:

Condensed Operating and Stockholder Information Balance Sheet Summary of Recent Acquisitions Cond. Oper. and Stkhldr Info. for Nicholson File Co. Balance Sheet for Nicholson File Company Condensed Operating & Stockholder Information for VLN Estimated Distribution of Nicholson File Company Stock Five-Year Forecast of Earnings Excluding Nicholson

REVISION HISTORY Date Name 10/25/84 K. Gustafson 04/30/85 D. Stenberg 04/13/87 D. Lustiber 04/01/88 D. Lustiber 01/30/90 P. Brantley 11/28/1991 6/4/1992 7/2/1997 J. Royo J. Royo M. Sarmiento

Explanation of Change Data Resources, Inc, Lexington, MA Final changes made Update to Lotus 2.01 Changed all formulas to constants MicroMentor, Inc., Cambridge, MA. Converted to MicroMentor format Converted to Excel Stripped HBSUTIL Upgraded to Excel 7.0

Page 1

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EXHIBIT 1

Condensed Operating and Stockholder Information, 1967-1971 1967 198 141 4 23 1 29 13.8 15.2 1 14.2 1968 206 145 5 25 2 29 15 14 0.9 13 1969 212 154 4 29 3 22 11.4 10.6 0.9 9.7 1970 226 165 4 29 4 24 11.6 12.4 0.9 11.5 1971 208 161 4 29 3 11 5.4 5.6 0.9 4.7

OPERATIONS ($ MILLIONS) Net sales Cost of goods sold Depreciation Selling & admin expenses Interest expense INCOME BEFORE TAXES extraordinary items Income taxes INCOME BEFORE EX.ITEMS Preferred dividend NET INCOME APPLICABLE TO COMMON STOCK

PER SHARE OF COMMON STOCK Earnings before extraordinary items Dividends Book value Market price - low Market price - high P/E ratio - low P/E ratio - high

1967 3.34 1.2 16.43 23 59 6.89 17.66

1968 3.07 1.25 17.26 36 57 11.73 18.57

1969 2.33 1.4 18.28 22 50 9.44 22.00

1970 2.75 1.4 19.68 22 35 8.00 12.73

1971 1.12 1.4 18.72 18 38 16.07 33.93

Cooper Industrials

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EXHIBIT 2

Balance Sheet as of December 31, 1971 ($ millions)

ASSETS Cash Accounts receivable Inventories Other TOTAL CURRENT ASSETS Net plant and equipment Other TOTAL ASSETS

12/71 9 49 57 2 117 47 8 172

LIABILITIES & NET WORTH Accounts payable Accrued taxes Long-term debt due TOTAL CURRENT LIABILITIES Long-term debt (a) Deferred taxes Preferred stock Common equity (b) TOTAL LIABILITIES & NET WORTH (a) Maturities of long-term debt were $5.5, $6.0, $4.0, $2.0 and $2.0 million in the years 1972 through 1976 respectively. (b) 4,218,691 shares outstanding.

12/71 30 3 5 38 34 4 11 85 172

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EXHIBIT 3

Summary of Recent Acquisitions ($ millions) Year Preceding Acquisition by Cooper Net Book Sales Income Value 22 1.4 15 16 -0.04 4.9 10 0.9 4.4

Lufkin Rule Co. Crescent Niag. Weller Electric

Acquis. Price Paid 20.6 12.5 14.6

Form of Transactions Convert. preferred Cash Common Stock

Cooper Industrials

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EXHIBIT 4

Condensed Operating and Stockholder Information for Nicholson File Company, 1967-1971

OPERATIONS ($ MILLIONS) Net sales Cost of goods sold Selling, general & admin. Depreciation expense Interest expense Other deductions INCOME BEFORE TAXES Taxes (a) NET INCOME PERCENTAGE OF SALES Cost of goods sold Selling, general & admin. Income before taxes STOCKHOLDER INFORMATION Earnings per share Dividends per share Book value per share Market price - low Market price - high P/E ratio - low P/E ratio - high

1967 48.5 32.6 10.7 2 0.4 0.27 2.53 0.6 1.93 1967 67% 22% 5%

1968 49.1 33.1 11.1 2.3 0.7 0.05 1.85 0.84 1.01 1968 67% 23% 4%

1969 53.7 35.9 11.5 2.4 0.78 0.15 2.97 1.31 1.66 1969 67% 21% 6%

1970 54.8 37.2 11.9 2.3 0.8 0.18 2.42 0.88 1.54 1970 68% 22% 4%

1971 55.3 37.9 12.3 2.1 0.8 0.18 2.02 0.67 1.35 1971 69% 22% 4%

3.19 1.6 45.66 33 46 10.34 14.42

1.65 1.6 48.03 35 48 21.21 30.00

2.88 1.6 49.31 29 41 10.07 14.24

2.64 1.6 50.2 25 33 9.47 12.50

2.32 1.6 51.25 23 32 9.91 13.79

(a) The ratio of income taxes to income before taxes had been reduced primarily by the investment tax credit & by the inclusion in income of equity in net income of partially owned foreign companies, the taxes for which were provided in the accounts of such companies and not in the tax provision of Nicholson. It was estimated that the average tax rate would be 40% in future years.

Cooper Industrials

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EXHIBIT 5

Balance Sheet of Nicholson File Company as of December 31, 1971 ($ millions) 12/71 1 8 18 1 28 3 16 47 12/71 2 2 4 12 31 47

ASSETS Cash Accounts receivable Inventories Other TOTAL CURRENT ASSETS Net plant and equipment Other TOTAL ASSETS LIABILITIES & NET WORTH Accounts payable Other TOTAL CURRENT LIABILITIES Long-term debt Common stock TOTAL LIABILITIES & NET WORTH

(a) Inventories in the amount of $11.8 million were priced at cost on the lifo method. The estimated replacement cost exceeded the carrying amounts by $9.2 million. The remaining inventories were priced at the lower of cost on the fifo method or market.

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EXHIBIT 6

Condensed Operating and Stockholder Information for VLN Corporation, 1967-1971 1967 45 1.97 1968 97 3.2 1969 99 3.2 1970 98 1.13 1971 100 2.98

OPERATIONS ($ MILLIONS) Net sales Net income FINANCIAL POSITION Current assets Current liabilities Net working capital Long-term debt Shareholders' equity STOCKHOLDER INFORMATION Earnings per share Dividends per share Shareholder eq/share ($) Market price - low Market price - high P/E ratio - low P/E ratio - high

25 6 19 10 21

46 11 35 18 36

49 15 34 16 40

41 10 31 15 39

46 13 33 17 41

0.78 -8.23 6 17 7.69 21.79

0.61 -9.64 10 18 16.39 29.51

0.53 -10 7 18 13.21 33.96

0.27 0.2 9.24 4 10 14.81 37.04

0.54 -9.69 5 8 9.26 14.81

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EXHIBIT 7 SHARES SUPPORTING COOPER H.K. Porter Cooper Industries TOTAL SHARES SUPPORTING VLN Nicholson family and management Owned by VLN TOTAL SHARES OUTSTANDING Shares owned by speculators Shares unaccounted for TOTAL

Estimated Distribution of Nicholson File Company Stock

177,000 29,000 206,000

117,000 14,000 131,000

50,000 - 100,000 197,000 - 147,000 584,000

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EXHIBIT 8

Five-Year Forecast of Earnings, Excluding Nicholson File Company, 1972-1976 1972 1973 11.9 1974 12.8 1975 13.8 1976 15

Net income available to common stockholders($mm) Number of shares outstanding (millions) Primary earnings/share

11

4.21 $2.61

4.21 $2.83

4.21 $3.04

4.21 $3.27

4.21 $3.56

Note: Casewriter's estimates

Cooper Industrials