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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 20: DISCONTINUED OPERATIONS RECEIVABLE AND LIABILITY</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In October 1998 Cooper sold its Automotive Products business to Federal-Mogul Corporation
(“Federal-Mogul”). These discontinued businesses (including the Abex Friction product line
obtained from Pneumo-Abex Corporation (“Pneumo”) in 1994) were operated through subsidiary
companies, and the stock of those subsidiaries was sold to Federal-Mogul pursuant to a Purchase and
Sale Agreement dated August 17, 1998 (“1998 Agreement”). In conjunction with the sale,
Federal-Mogul indemnified Cooper for certain liabilities of these subsidiary companies, including
liabilities related to the Abex Friction product line and any potential liability that Cooper may
have to Pneumo pursuant to a 1994 Mutual Guaranty Agreement (the “Mutual Guaranty Agreement”)
between Cooper and Pneumo. On October 1, 2001, Federal-Mogul and several of its affiliates filed a
Chapter 11 bankruptcy petition. The Bankruptcy Court for the District of Delaware confirmed
Federal-Mogul’s plan of reorganization and Federal-Mogul emerged from bankruptcy in December 2007.
As part of Federal-Mogul’s Plan of Reorganization, Cooper and Federal-Mogul reached a settlement
agreement that was subject to approval by the Bankruptcy Court resolving Federal-Mogul’s
indemnification obligations to Cooper. As discussed further below, on September 30, 2008, the
Bankruptcy Court issued its final ruling denying Cooper’s participation in the proposed
Federal-Mogul 524(g) trust resulting in implementation of the previously approved Plan B
Settlement. As part of its obligation to Pneumo for any asbestos-related claims arising from the
Abex Friction product line (“Abex Claims”), Cooper has rights, confirmed by Pneumo, to significant
insurance for such claims. Based on information provided by representatives of Federal-Mogul and
recent claims experience, from August 28, 1998 through December 31, 2010, a total of 149,350 Abex
Claims were filed, of which 133,874 claims have been resolved leaving 15,476 Abex Claims pending at
December 31, 2010. During the years ended December 31, 2010, 2009 and 2008 claims filed were
1,610; 1,565; and 2,641, respectively and claims resolved were 8,963; 2,424; and 8,403,
respectively. Since August 28, 1998, the average indemnity payment for resolved Abex Claims was
$2,065 before insurance. A total of $189.4 million was spent on defense costs for the period
August 28, 1998 through December 31, 2010. Because of the exhaustion of primary layers of coverage
and litigation with certain excess insurers, existing insurance coverage currently provides
approximately 30% recovery of the total defense and indemnity payments for Abex Claims, although,
in certain periods, insurance recoveries can be higher due to new settlements with insurers.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u>2005 - 2007</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In December 2005 Cooper reached an initial agreement in negotiations with the representatives
of Federal-Mogul, its bankruptcy committees and the future claimants (the “Representatives”)
regarding Cooper’s participation in Federal Mogul’s proposed 524(g) asbestos trust. By
participating in this trust, Cooper would have resolved its liability for asbestos claims arising
from Cooper’s former Abex Friction Products business. The proposed settlement agreement was
subject to court approval and certain other approvals. Future claims would have been resolved
through the bankruptcy trust.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Although the final determination of whether Cooper would participate in the Federal-Mogul
524(g) trust was unknown, Cooper’s management concluded that, at the date of the filing of its 2005
Form 10-K, the most likely outcome in the range of potential outcomes was a settlement
approximating the December 2005 proposed settlement. Accordingly, the accrual for potential
liabilities related to the Automotive Products sale and the Federal-Mogul bankruptcy was $526.3
million at December 31, 2005. The December 31, 2005 discontinued operations accrual included
payments to a 524(g) trust over 25 years that were undiscounted, and included $215 million of
insurance recoveries where insurance in place agreements, settlements or policy recoveries were
probable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Throughout 2006 and 2007 Cooper continued to believe that the most likely outcome in the range
of potential outcomes was a revised settlement with Cooper resolving its asbestos obligations
through participation in the proposed Federal-Mogul 524(g) trust. Although the details of the
proposed settlement agreement evolved during the on-going negotiations throughout 2006 and 2007,
the underlying principles of
the proposed settlement arrangements being negotiated principally
included fixed payments to a 524(g) trust over 25 years that were subject to reduction for
insurance proceeds received in the future.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As a result of the then current status of settlement negotiations, Cooper recorded a $20.3
million after-tax discontinued operations charge, net of an $11.4 million income tax benefit, in
the second quarter of 2006 to reflect the revised terms of the proposed settlement agreement at
that time. The discontinued operations accrual was $509.1 million and $529.6 million as of
December 31, 2007 and 2006, respectively, and included payments to a 524(g) trust over 25 years
that were undiscounted, and included insurance recoveries of $230 million and $239 million,
respectively, where insurance in place agreements, settlements or policy recoveries were probable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The U.S. Bankruptcy Court for the District of Delaware confirmed Federal-Mogul’s plan of
reorganization on November 8, 2007, and the U.S. District Court for the District of Delaware
affirmed the Bankruptcy Court’s order on November 14, 2007. As part of its ruling, the Bankruptcy
Court approved the Plan B Settlement between Cooper and Federal-Mogul, which would require payment
of $138 million to Cooper in the event Cooper’s participation in the Federal-Mogul 524(g) trust is
not approved for any reason, or if Cooper elected not to participate or to pursue participation in
the trust. The Bankruptcy Court stated that it would consider approving Cooper’s participation in
the Federal-Mogul 524(g) trust at a later time, and that its order confirming the plan of
reorganization and approving the settlement between Cooper and Federal-Mogul did not preclude later
approval of Cooper’s participation in the 524(g) trust. Accordingly, in an effort to continue
working towards approval of Cooper’s participation in the trust and to address certain legal issues
identified by the Court, Cooper, Pneumo-Abex, Federal-Mogul, and other plan supporters filed the
Modified Plan A Settlement Documents on December 13, 2007. The Modified Plan A Settlement
Documents would have required Cooper to make an initial payment of $248.5 million in cash to the
Federal-Mogul trust upon implementation of Plan A with additional annual payments of up to $20
million each due over 25 years. If the Bankruptcy Court had approved the modified settlement and
that settlement was implemented, Cooper, through Pneumo-Abex LLC, would have continued to have
access to Abex insurance policies.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><u>2008-2010</u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During the first quarter of 2008 the Bankruptcy Court concluded hearings on Plan A. On
September 30, 2008, the Bankruptcy Court issued its ruling denying the Modified Plan A Settlement
resulting in Cooper not participating in the Federal-Mogul 524(g) trust and instead proceeding with
the Plan B Settlement that had previously been approved by the Bankruptcy Court. As a result of
the Plan B Settlement, Cooper received the $138 million payment, plus interest of $3 million, in
October 2008 from the Federal-Mogul Bankruptcy estate and will continue to resolve through the tort
system the asbestos related claims arising from the Abex Friction product line that it had sold to
Federal-Mogul in 1998. Cooper continues to have access to Abex insurance policies.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The accrual for potential liabilities related to the Automotive Products sale and the
Federal-Mogul bankruptcy and a progression of the activity is presented in the following table
assuming resolution through participation in the Federal-Mogul 524(g) trust up until September 30,
2008 when the accounting was adjusted to reflect the Plan B Settlement.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td align="center" colspan="2">(in millions)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrual at beginning of period (under Plan A)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">509.1</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indemnity and defense payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(16.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance recoveries
</div></td>
<td> </td>
<td> </td>
<td align="right">25.4</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.6</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrual at end of period (under Plan A) <sup style="font-size: 85%; vertical-align: text-top">1</sup>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">516.0</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">1</td>
<td> </td>
<td>The $516.0 million liability reflects the estimated liability under Plan A
immediately prior to adjusting the accounting on September 30, 2008 to reflect the Plan
B Settlement.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As a result of the September 30, 2008 Bankruptcy Court ruling discussed above, Cooper
adjusted its accounting in the third quarter of 2008 to reflect the separate assets and liabilities
related to the on-going activities to resolve the potential asbestos related claims through the
tort system. Cooper recorded income from discontinued operations of $16.6 million, net of a $9.4
million income tax expense, in the third quarter of 2008 to reflect the Plan B Settlement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table presents the separate assets and liabilities under the Plan B settlement and
the cash activity subsequent to the September 30, 2008 Plan B Settlement date.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>31, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>31, 2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>31, 2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>30, 2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">(in millions)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Asbestos liability analysis (undiscounted):</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liability for unpaid, pending and
future indemnity and defense costs at end of
period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">747.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">784.5</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">815.1</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">823.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Asbestos receivable analysis (undiscounted):</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Receivable from Federal-Mogul Bankruptcy
estate (received in Oct. 2008)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">141.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance receivable for previously paid
claims and insurance settlements
</div></td>
<td> </td>
<td> </td>
<td align="right">59.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">72.7</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance-in-place agreements available for
pending and future claims
</div></td>
<td> </td>
<td> </td>
<td align="right">104.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">117.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">119.6</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total estimated asbestos receivable at end of
period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">163.6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">179.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">192.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">333.3</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Three Months</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Year Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Year Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10">(in millions)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Cash Flow:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indemnity and defense payments
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(35.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(29.9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7.9</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance recoveries
</div></td>
<td> </td>
<td> </td>
<td align="right">15.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54.6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payment from Federal-Mogul Bankruptcy Estate
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141.0</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.2</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.3</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net cash flow (excluding related income taxes)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21.7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">24.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">132.8</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During 2009 Cooper recognized an after tax gain from discontinued operations of $25.5 million,
which is net of a $16.2 million income tax expense, from negotiated insurance settlements
consummated in 2009 that were not previously recognized. Cooper expects that additional insurance
recoveries will be obtained as new insurance-in-place agreements are consummated or settlements
with insurance carriers are completed. Timing and value of these agreements and settlements cannot
currently be estimated as they may be subject to extensive additional negotiation and litigation.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Asbestos Liability Estimate</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2010, Cooper estimates that the undiscounted liability for pending and
future indemnity and defense costs for the next 45 years will be $747.1 million. The amount
included for unpaid indemnity and defense costs is not significant at December 31, 2010. The
estimated liability is before any tax benefit or insurance recoveries and is not discounted as the
timing of the actual payments is not reasonably predictable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The methodology used to project Cooper’s liability estimate relies upon a number of
assumptions including Cooper’s recent claims experience and declining future asbestos spending
based on past trends and publicly available epidemiological data, changes in various jurisdictions,
management’s judgment about the current and future litigation environment, and the availability to
claimants of other payment sources.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Abex discontinued using asbestos in the Abex Friction product line in the 1970’s and
epidemiological studies that are publicly available indicate the incidence of asbestos-related
disease is in decline and should continue to decline steadily. Although Cooper believes that its
estimated liability for pending and future indemnity and defense costs represents the best estimate
of its future obligation, Cooper utilized scenarios that it believes are reasonably possible that
indicate a broader range of potential estimates from $500 to $785 million (undiscounted).
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Asbestos Receivable Estimate</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2010, Cooper, through Pneumo-Abex LLC, has access to Abex insurance
policies with remaining limits on policies with solvent insurers in excess of $670 million.
Insurance recoveries reflected as receivables in the balance sheet include recoveries where
insurance-in-place agreements, settlements or policy recoveries are probable. As of December 31,
2010, Cooper’s receivable for recoveries of costs from insurers amounted to $163.6 million, of
which $59.5 million relate to costs previously paid or insurance settlements. Cooper’s
arrangements with the insurance carriers may defer certain amounts of insurance and settlement
proceeds that Cooper is entitled to receive beyond twelve months. Approximately 92% of the $163.6
million receivable from insurance companies at December 31, 2010 is due from domestic insurers
whose AM Best rating is Excellent (A-) or better. The remaining balance of the insurance
receivable has been significantly discounted to reflect management’s best estimate of the
recoverable amount.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cooper expects that additional insurance recoveries will be obtained as new insurance-in-place
agreements are consummated or settlements with insurance carriers are completed. Timing and value
of these agreements and settlements cannot currently be estimated as they may be subject to
extensive additional negotiation and litigation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Critical Accounting Assumptions</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The amounts recorded by Cooper for its asbestos liability and related insurance receivables
are not discounted and rely on assumptions that are based on currently known facts and strategy.
The value of the liability on a discounted basis net of the amount of insurance recoveries likely
to materialize in the future would be significantly lower than the net amounts currently recognized
in the balance sheet. As the estimated liability is not discounted and extends over 45 years, any
changes in key assumptions could have a significant impact on the recorded liability. Key
variables in these assumptions include the number and type of new claims filed each year, the
average indemnity and defense costs of resolving claims, the number of years these assumptions are
projected into the future, and the resolution of on-going negotiations of additional settlement or
coverage-in-place agreements with insurance carriers. Other factors that may affect Cooper’s
liability and ability to recover under its insurance policies include uncertainties surrounding the
litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be
made by state and federal courts, and the passage of state or federal tort reform legislation.
Cooper will review these assumptions on a periodic basis to determine whether any adjustments are
required to the estimate of its recorded asbestos liability and related insurance receivables.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cooper anticipates that the annual cash outlay for its potential asbestos liability, net of
insurance recoveries, will vary from year to year and could be material to Cooper’s operating cash
flow for a particular reporting period or year, depending upon the case load for a particular year
and the outcome of trials and settlement negotiations. In 2010 payments for indemnity and defense
costs exceeded insurance recoveries, while in 2009 insurance recoveries exceeded cash outlays due
to negotiated insurance settlements consummated during 2009.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On February 1, 2011, Cooper entered into a settlement agreement that upon closing would
resolve its asbestos liability regarding the Automotive Products segment. The settlement
contemplates termination of the 1994 Mutual Guaranty Agreement between Cooper and Pneumo and the
creation of a Settlement Trust. Upon closing of the
transactions contemplated by the settlement agreement, a subsidiary of Cooper will make payments to
the Settlement Trust totaling $307.5 million, subject to certain reductions ($250 million at
closing and the remainder due in installments over four years). After the closing, the Company and
its subsidiaries will have no further obligations under the Mutual Guaranty Agreement.
Consummation of the settlement is expected during the second quarter of 2011, subject to a favorable ruling regarding the tax treatment of the Settlement Trust from the
Internal Revenue Service and other closing conditions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As discussed above, the Company has recorded an estimated accrual on an undiscounted basis for
pending and future indemnity and defense costs under the Mutual Guaranty. In addition, the Company
has recorded a receivable for related insurance recoveries where insurance-in-place agreements,
settlements or policy recoveries are probable. Upon completion of the transactions contemplated by
the settlement agreement, the Company expects that it will adjust its estimated net liability
currently recorded for its obligations under the Mutual Guaranty with the amount payable under the
settlement agreement, which is expected to result in a pre-tax, noncash gain for the difference
between the two amounts. There can be no assurance that the settlement agreement will be
consummated or such pre-tax noncash gain will be realized.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure includes the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain or loss recognized in the income statement and the income statement caption that includes that gain or loss, amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
falsefalse12Discontinued Operations Receivable and LiabilityUnKnownUnKnownUnKnownUnKnownfalsetrue