FORM 10-Q

10-Q 1 d320752d10q.htm FORM 10-Q FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

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 1-4682

Thomas & Betts Corporation

(Exact name of registrant as specified in its charter)


Tennessee		22-1326940
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8155 T&B Boulevard Memphis, Tennessee		38125
(Address of principal executive offices)		(Zip Code)

(901) 252-8000

(Registrant’s telephone number, including area code)

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title of Each Class

Outstanding Shares

at May 2, 2012

Common Stock, $.10 par value

52,832,675

Thomas & Betts Corporation and Subsidiaries

TABLE OF CONTENTS


		Page

PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements — Unaudited:		3
	Consolidated Statements of Operations for the Quarter Ended March 31, 2012 and 2011		3
	Consolidated Statements of Comprehensive Income for the Quarter Ended March 31, 2012 and 2011		4
	Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011		5
	Consolidated Statements of Cash Flows for the Quarter Ended March 31, 2012 and 2011		6
	Notes to Consolidated Financial Statements		7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		29
ITEM 4.	Controls and Procedures		29

PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings		30
ITEM 1A.	Risk Factors		30
ITEM 2.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		30
ITEM 5.	Other Information		30
ITEM 6.	Exhibits		30
SIGNATURE			31
EXHIBIT INDEX			32

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Report includes “forward-looking comments and statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts regarding Thomas & Betts Corporation and are subject to risks and uncertainties in our operations, business, economic and political environment. For further explanation of these risks and uncertainties, see Item 1A. “Risk Factors” in our Form 10-K for the year ended December 31, 2011. Forward looking statements contain words such as:


• “achieve”	• “anticipates”	• “intends”

• “should”	• “expects”	• “predict”

• “could”	• “might”	• “will”

• “may”	• “believes”	• other similar expressions

These forward-looking statements are not guarantees of future performance. Many factors could affect our future financial condition or results of operations. Accordingly, actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking statements contained in this Report. We undertake no obligation to revise any forward-looking statement included in this Report to reflect any future events or circumstances.

A reference in this Report to “we”, “our”, “us”, “Thomas & Betts” or the “Corporation” refers to Thomas & Betts Corporation and its consolidated subsidiaries.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Thomas & Betts Corporation and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Quarter Ended March 31,
	2012			2011
Net sales	$	607,088		$	523,135
Cost of sales		407,195			359,532

Gross profit		199,893			163,603
Selling, general and administrative		115,564			104,101

Earnings from operations		84,329			59,502
Interest expense, net		(6,185	)		(7,765	)
Other (expense) income, net		(574	)		(985	)

Earnings from continuing operations before income taxes		77,570			50,752
Income tax provision		22,495			15,226

Net earnings	$	55,075		$	35,526

Earnings per share:
Basic	$	1.06		$	0.69

Diluted	$	1.03		$	0.67

Average shares outstanding:
Basic		51,960			51,546
Diluted		53,226			52,917

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Thomas & Betts Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Quarter Ended March 31,
	2012			2011
Net income	$	55,075		$	35,526

Other comprehensive income, before tax:
Foreign currency translation adjustments		22,438			30,044
Net unrealized gains on cash flow hedge		2,069			3,418
Amortization of net prior service costs and net actuarial losses		3,078			2,010

Other comprehensive income, before tax		27,585			35,472

Income tax expense related to items of other comprehensive income		(1,922	)		(1,907	)

Other comprehensive income, net of tax		25,663			33,565

Comprehensive income	$	80,738		$	69,091

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Thomas & Betts Corporation and Subsidiaries

Consolidated Balance Sheets

(In thousands)

(Unaudited)


	March 31, 2012			December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	598,253		$	552,256
Receivables, net		326,730			284,855
Inventories		266,828			236,409
Deferred income taxes		44,073			41,915
Other current assets		28,319			28,498

Total Current Assets		1,264,203			1,143,933

Property, plant and equipment, net		299,880			299,218
Goodwill		980,485			974,287
Other intangible assets, net		318,557			324,564
Other assets		74,285			81,719

Total Assets	$	2,937,410		$	2,823,721


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current maturities of long-term debt	$	528		$	339
Accounts payable		204,677			213,052
Accrued liabilities		123,642			123,266
Income taxes payable		7,185			10,230

Total Current Liabilities		336,032			346,887

Long-Term Liabilities
Long-term debt, net of current maturities		574,165			574,416
Long-term benefit plan liabilities		204,482			207,705
Deferred income taxes		43,082			42,792
Other long-term liabilities		49,505			49,634
Contingencies (Note 13)
Shareholders’ Equity
Common stock		5,240			5,130
Additional paid-in capital		85,094			38,085
Retained earnings		1,766,073			1,710,998
Accumulated other comprehensive income (loss)		(126,263	)		(151,926	)

Total Shareholders’ Equity		1,730,144			1,602,287

Total Liabilities and Shareholders’ Equity	$	2,937,410		$	2,823,721

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Thomas & Betts Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Quarter Ended March 31,
	2012			2011
Cash Flows from Operating Activities:
Net earnings	$	55,075		$	35,526
Adjustments:
Depreciation and amortization		20,220			21,037
Share-based compensation expense		3,216			3,742
Deferred income taxes		4,437			3,599
Incremental tax benefits from share-based payment arrangements		(8,404	)		(1,326	)
Changes in operating assets and liabilities, net:
Receivables		(38,604	)		(41,364	)
Inventories		(28,849	)		(35,505	)
Accounts payable		(10,233	)		(7,487	)
Accrued liabilities		(842	)		786
Income taxes payable		5,660			(11,001	)
Other		(1,076	)		(5,213	)

Net cash provided by (used in) operating activities		600			(37,206	)

Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(10,480	)		(12,111	)
Other		165			2

Net cash provided by (used in) investing activities		(10,315	)		(12,109	)

Cash Flows from Financing Activities:
Stock options exercised		35,740			18,518
Repayment of debt and other borrowings		(133	)		(78	)
Incremental tax benefits from share-based payment arrangements		8,404			1,326

Net cash provided by (used in) financing activities		44,011			19,766


Effect of exchange-rate changes on cash and cash equivalents		11,701			8,634


Net increase (decrease) in cash and cash equivalents		45,997			(20,915	)
Cash and cash equivalents, beginning of period		552,256			455,198

Cash and cash equivalents, end of period	$	598,253		$	434,283

Cash payments for interest	$	3,531		$	4,716
Cash payments for income taxes	$	10,406		$	26,768

The accompanying Notes are an integral part of these Consolidated Financial Statements.

Thomas & Betts Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The financial information presented as of any date other than December 31 has been prepared from the books and records without audit. Financial information as of December 31 has been derived from the Corporation’s audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information for the periods indicated have been included. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the periods ended March 31, 2012 and 2011 are not necessarily indicative of the operating results for the full year.

2. Basic and Diluted Earnings Per Share

The following is a reconciliation of the basic and diluted earnings per share computations:


	Quarter Ended March 31,
	2012		2011
(In thousands, except per share data)
Net earnings	$	55,075	$	35,526

Basic shares:
Average shares outstanding		51,960		51,546

Basic earnings per share	$	1.06	$	0.69

Diluted shares:
Average shares outstanding		51,960		51,546
Additional shares on the potential dilution from stock options, nonvested restricted stock and performance units		1,266		1,371

		53,226		52,917

Diluted earnings per share	$	1.03	$	0.67

The Corporation had stock options that were out-of-the-money which were excluded because of their anti-dilutive effect. Such out-of-the money stock options were negligible for the first quarter of 2012 and 2011.

3. Inventories

The Corporation’s inventories at March 31, 2012 and December 31, 2011 were:


	March 31, 2012		December 31, 2011
(In thousands)
Finished goods	$	115,713	$	109,345
Work-in-process		37,543		29,470
Raw materials		113,572		97,594

Total inventories	$	266,828	$	236,409

4. Property, Plant and Equipment

The Corporation’s property, plant and equipment at March 31, 2012 and December 31, 2011 were:


	March 31, 2012		December 31, 2011
(In thousands)
Land	$	32,995	$	32,590
Building		206,815		206,239
Machinery and equipment		668,617		660,455
Construction-in-progress		16,687		12,293

Gross property, plant and equipment		925,114		911,577
Less: Accumulated depreciation		625,234		612,359

Net property, plant and equipment	$	299,880	$	299,218

5. Goodwill and Other Intangible Assets

The following table reflects activity for goodwill by segment during the first quarter of 2012:


	Quarter Ended March 31, 2012
	Balance at Beginning of Period		Additions		Other — Primarily Currency Translation		Balance at End of Period
(In thousands)
Electrical	$	901,632	$	—	$	6,060	$	907,692
Steel Structures		64,759		—		—		64,759
HVAC		7,896		—		138		8,034

	$	974,287	$	—	$	6,198	$	980,485

The following table reflects activity for other intangible assets during the first quarter of 2012:


	Quarter Ended March 31, 2012
	Balance at Beginning of Period			Additions		Amortization Expense			Other — Primarily Currency Translation			Balance at End of Period
(In thousands)
Intangible assets subject to amortization	$	340,098		$	—	$	—		$	2,292		$	342,390
Accumulated amortization		(125,697	)		—		(8,466	)		(474	)		(134,637	)

		214,401			—		(8,466	)		1,818			207,753
Other intangible assets not subject to amortization		110,163			—		—			641			110,804

Total	$	324,564		$	—	$	(8,466	)	$	2,459		$	318,557

6. Income Taxes

The Corporation’s income tax provision for the first quarter of 2012 was $22.5 million, or an effective rate of 29.0% of pre-tax income, compared to an income tax provision in the first quarter of 2011 of $15.2 million, or an effective rate of 30.0% of pre-tax income. The effective tax rate for each period reflects benefits from the Puerto Rican manufacturing operations, which have a significantly lower effective tax rate than the Corporation’s blended statutory tax rate in other jurisdictions.

During the first quarter of 2011, the Corporation concluded a Canada Revenue Agency audit of the Corporation’s Canadian income tax returns for the tax years 2005 — 2009, resulting in an assessment of approximately $8 million, including interest. Substantially all of this assessment was paid during the second quarter of 2011. The Canadian tax assessment is offset by an expected recovery of U.S. federal and state income taxes of approximately $7 million, resulting from the Corporation’s petition for tax relief under the competent authority administrative process.

The Corporation had net deferred tax assets totaling $17.4 million as of March 31, 2012 and net deferred tax assets totaling $24.6 million as of December 31, 2011. Realization of the deferred tax assets is dependent upon the Corporation’s ability to generate sufficient future taxable income. Management believes that it is more-likely-than-not that future taxable income, based on tax laws in effect as of March 31, 2012, will be sufficient to realize the recorded deferred tax assets, net of any valuation allowance.

7. Fair Value of Financial Instruments

The Corporation’s financial instruments include cash and cash equivalents, marketable securities, short-term receivables and payables, and debt. Included in cash and cash equivalents are money market funds which are valued based on the published net asset value (“NAV”). Financial instruments also include an interest rate swap agreement, which is discussed further in Note 9 below. The carrying amounts of the Corporation’s financial instruments generally approximated their fair values at

March 31, 2012 and December 31, 2011, except that, based on the borrowing rates available to the Corporation under current market conditions, the fair value of long-term debt (including current maturities) using Level 2 fair value inputs was approximately $610 million at March 31, 2012 and $601 million at December 31, 2011.

8. Debt

The Corporation’s long-term debt at March 31, 2012 and December 31, 2011 was:


	March 31, 2012		December 31, 2011
(In thousands)
Senior credit facility due August 2016^(a)	$	—	$	—
Senior credit facility due October 2012^(a)		325,000		325,000
Unsecured 5.625% Senior Notes due 2021^(b)		248,635		248,570
Other, including capital leases		1,058		1,185

Long-term debt (including current maturities)		574,693		574,755
Less current maturities		528		339

Long-term debt, net of current maturities	$	574,165	$	574,416

^(a)	Interest is paid monthly.

^(b)	Interest is paid semi-annually.

As of March 31, 2012 and December 31, 2011, the Corporation had outstanding $250 million of 5.625% Senior Notes due 2021. The indentures underlying the unsecured notes contain standard covenants such as restrictions on mergers, liens on certain property, sale-leaseback of certain property and funded debt for certain subsidiaries. The indentures also include standard events of default such as covenant default and cross-acceleration.

The Corporation has an unsecured, senior credit facility (“new revolving credit facility”) with total availability of $500 million and a five year term expiring in August 2016. As of March 31, 2012 and December 31, 2011, no borrowings were outstanding under this facility. Under the new revolving credit facility agreement, the Corporation will select an interest rate at the time of its initial draw reflecting LIBOR plus a margin based on the Corporation’s credit rating or the highest rate based on several other benchmark rates, including: (i) JPMorgan Chase Bank’s New York Prime rate, (ii) the federal funds effective rate, or (iii) an adjusted LIBOR rate, plus a margin based on our credit rating.

All borrowings and other extensions of credit under the Corporation’s new revolving credit facility are subject to the satisfaction of customary conditions, including absence of defaults and accuracy in material respects of representations and warranties. The proceeds of any loans under the facility may be used for general operating needs and for other general corporate purposes in compliance with the terms of the facility agreement. The Corporation pays an annual commitment fee to maintain the facility of 20 basis points.

Fees to access the facility and letters of credit are based on a pricing grid related to the Corporation’s debt ratings with Moody’s, S&P, and Fitch during the term of the facility.

The Corporation’s new revolving credit facility requires that it maintain:

•

a maximum leverage ratio of 3.75 to 1.00; and

•

a minimum interest coverage ratio of 3.00 to 1.00.

The new revolving credit facility also contains customary covenants that could restrict the Corporation’s ability to: incur additional indebtedness; grant liens; make investments, loans, or guarantees; declare dividends; or repurchase company stock.

Outstanding letters of credit, which reduced availability under the new revolving credit facility, amounted to $17.7 million at March 31, 2012. The letters of credit relate primarily to third-party insurance claims.

Concurrent to entering into the new revolving credit facility, the Corporation amended its existing unsecured, senior credit facility (“existing revolving credit facility”) to reduce the total availability under this facility from $750 million to the $325 million of debt outstanding plus open letters of credit outstanding under the facility at the time of the amendment. Letters of credit under this facility at March 31, 2012 amounted to $2.3 million. The letters of credit relate primarily to environmental assurances. As borrowings and letters of credit under the facility are reduced, the amount of the facility will decrease.

The amendment to the existing revolving credit facility conformed all covenants and obligations to those found in the new revolving credit facility, except those related to interest on borrowings and fees, which remain unchanged. At March 31, 2012 and December 31, 2011, $325 million was outstanding under this facility. The existing revolving credit facility has a five-year term expiring October 2012. The outstanding balance of the existing revolving credit facility has been classified as long-term debt in the Corporation’s consolidated balance sheet based on the Corporation’s ability and intent to refinance this debt on a long-term basis through use of funds available under its new revolving credit facility or through borrowings in private or public capital markets.

The Corporation has a EUR 10 million (approximately US$13.3 million) committed revolving credit facility with a European bank. The Corporation pays an annual commitment fee of 20 basis points on the undrawn balance to maintain this facility. This credit facility contains standard covenants and events of default such as covenant default and cross-default. This facility has an indefinite maturity, and no borrowings were outstanding as of March 31, 2012 and December 31, 2011. Outstanding letters of credit which reduced availability under the European facility amounted to EUR 1.8 million (approximately US$2.4 million) at March 31, 2012.

The Corporation has a CAN 10 million (approximately US$10.1 million) committed revolving credit facility with a Canadian bank. The Corporation pays an annual commitment fee of 20 basis points on the undrawn balance to maintain this facility. This credit facility contains standard covenants and events of default such as covenant default and cross-default. This facility matures in 2016, and no borrowings were outstanding as of March 31, 2012 and December 31, 2011.

As of March 31, 2012, the Corporation’s aggregate availability of funds under its credit facilities is approximately $503 million, after deducting outstanding letters of credit. The Corporation has the option, at the time of drawing funds under any of the credit facilities, of selecting an interest rate based on a number of benchmarks including LIBOR, the federal funds rate, or the prime rate of the agent bank.

As of March 31, 2012, the Corporation also had letters of credit in addition to those discussed above that do not reduce availability under the Corporation’s credit facilities. The Corporation had $21.5 million of such additional letters of credit that relate primarily to third-party insurance claims processing, performance bonds, performance guarantees and acquisition obligations.

9. Derivative Instruments

The Corporation is exposed to market risk from changes in interest rates, foreign exchange rates and raw material prices, among others. At times, the Corporation may enter into various derivative instruments to manage certain of those risks. The Corporation does not enter into derivative instruments for speculative or trading purposes.

Interest Rate Swap Agreement

The Corporation has a forward-starting amortizing interest rate swap for a notional amount of $200 million. The interest rate swap agreement expires on October 1, 2012. The interest rate swap hedges the Corporation’s exposure to changes in interest rates on $200 million of borrowings under its existing revolving credit facility. The Corporation has designated the receive variable/pay fixed interest rate swap as a cash flow hedge for accounting purposes. Under the interest rate swap, the Corporation receives one-month London Interbank Offered Rate (“LIBOR”) and pays an underlying fixed rate of 4.86%. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the applicable periods during which the hedged transaction affects earnings. Gains or losses on the derivative representing hedge ineffectiveness are recognized in current period earnings.

The Corporation values the interest rate swap at fair value. Fair value is the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Measuring fair value involves a hierarchy of valuation inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly; and, Level 3 inputs are unobservable inputs in which little or no market data exists, therefore requiring a company to develop its own valuation assumptions.

The Corporation’s interest rate swap was reflected in the Corporation’s consolidated balance sheet in other long-term liabilities at its fair value of $5.1 million as of March 31, 2012 and $7.2 million as of December 31, 2011. This swap is measured at fair value at the end of each reporting period. The Corporation’s fair value estimate was determined using significant unobservable inputs and assumptions (Level 3) and, in addition, the liability valuation reflects the Corporation’s credit standing. The valuation technique utilized by the Corporation to calculate the swap fair value is the income approach. Using inputs for current market expectations of LIBOR rates, Eurodollar futures prices, treasury yields and interest rate swap spreads, this approach compares the present value of a constructed zero coupon yield curve and the present value of an extrapolated forecast of future interest rates. This determined value is then reduced by a credit valuation adjustment that takes into effect the current credit risk of the interest rate swap counterparty or the Corporation, as applicable. The credit valuation adjustment was negligible as of March 31, 2012 and December 31, 2011.

The Corporation’s balance of accumulated other comprehensive income has been reduced by $3.2 million, net of tax of $1.9 million, as of March 31, 2012 and $4.4 million, net of tax of $2.7 million, as of December 31, 2011 to reflect the above interest rate swap liability.

The following is a reconciliation associated with the interest rate swap of the fair value activity using Level 3 inputs during the first quarter of 2012 and 2011:


	Quarter Ended
	March 31, 2012			March 31, 2011
(In millions)
Asset (liability) at beginning of period	$	(7.2	)	$	(21.3	)
Total realized/unrealized gains or losses:
Included in earnings		(2.3	)		(3.7	)
Increase (decrease) in fair value included in comprehensive income		2.1			3.4
Settlements		2.3			3.8

Asset (liability) at end of period	$	(5.1	)	$	(17.8	)

Interest expense, net reflects a negligible benefit during the first quarter of 2012 and 2011 for the ineffective portion of the swap.

Forward Foreign Exchange Contracts

The Corporation had no outstanding forward sale or purchase contracts as of March 31, 2012 or December 31, 2011. The Corporation is exposed to the effects of changes in exchange rates primarily from the Canadian dollar and European currencies. From time to time, the Corporation utilizes forward foreign exchange contracts for the sale or purchase of foreign currencies to mitigate this risk.

Commodities Futures Contracts

The Corporation had no outstanding commodities futures contracts as of March 31, 2012 or December 31, 2011. The Corporation is exposed to risk from fluctuating prices for certain materials used to manufacture its products, such as: steel, aluminum, copper, zinc, resins and rubber compounds. At times, some of the risk associated with usage of aluminum, copper and zinc has been mitigated through the use of futures contracts that mitigate the price exposure to these commodities.

10. Share-Based Payment Arrangements

Share-based compensation expense, net of tax, of $2.0 million and $2.3 million was charged against income during the first quarter of 2012 and 2011, respectively. During the first quarter of 2012, the Corporation had 1,088,428 stock options exercised at a weighted average exercise price of $32.84 per share and had 4,313 stock options forfeited or expired.

11. Pension and Other Postretirement Benefits

Net periodic cost for the Corporation’s pension and other postretirement benefits included the following components:


	Quarter Ended
	Pension Benefits						Other Postretirement Benefits
	March 31, 2012			March 31, 2011			March 31, 2012		March 31, 2011
(In thousands)
Service cost	$	897		$	1,039		$	2	$	—
Interest cost		6,618			7,344			160		203
Expected return on plan assets		(8,311	)		(8,524	)		—		—
Plan net loss (gain)		2,658			1,596			35		58
Prior service cost (gain)		197			283			193		(63	)
Transition obligation (asset)		(3	)		(5	)		5		192
Net curtailment/settlement loss (gain)		—			—			—		—

Net periodic benefit cost	$	2,056		$	1,733		$	395	$	390

Contributions to our qualified pension plans during the quarters ended March 31, 2012 and 2011 were not significant. We expect required contributions to our qualified pension plans during the remainder of 2012 to be minimal.

12. Segment Disclosures

The Corporation has three reportable segments: Electrical, Steel Structures and HVAC. The Corporation’s reportable segments are based primarily on product lines and represent the primary mode used to assess allocation of resources and performance. The Corporation evaluates its business segments primarily on the basis of segment earnings, with segment earnings defined as earnings before corporate expense, depreciation and amortization expense, share-based compensation expense, interest, income taxes and certain other items. Corporate expense includes legal, finance and administrative costs. The Corporation has no material inter-segment sales.

The Electrical segment designs, manufactures and markets thousands of different electrical connectors, components and other products for industrial, construction and utility applications. The Steel Structures segment designs, manufactures and markets highly engineered steel transmission structures. The HVAC segment designs, manufactures and markets heating and ventilation products for commercial and industrial buildings. The Corporation’s U.S. Electrical and International Electrical operating segments have been aggregated in the Electrical reporting segment since they have similar economic characteristics as well as similar products and services, production processes, types of customers and methods used for distributing their products.


	Quarter Ended March 31,
	2012			2011
(In thousands)
Net Sales
Electrical	$	483,964		$	443,520
Steel Structures		82,108			50,945
HVAC		41,016			28,670

Total	$	607,088		$	523,135

Segment Earnings
Electrical	$	100,422		$	86,936
Steel Structures		19,389			4,292
HVAC		7,664			4,562

Segment earnings		127,475			95,790
Corporate expense		(19,710	)		(11,509	)
Depreciation and amortization expense		(20,220	)		(21,037	)
Share-based compensation expense		(3,216	)		(3,742	)
Interest expense, net		(6,185	)		(7,765	)
Other (expense) income, net		(574	)		(985	)

Earnings before income taxes	$	77,570		$	50,752

13. Contingencies

Legal Proceedings

The Corporation is involved in legal proceedings and litigation arising in the ordinary course of business. In those cases where the Corporation is the defendant, plaintiffs may seek to recover large or sometimes unspecified amounts or other types of relief and some matters may remain unresolved for several years. Such matters may be subject to many uncertainties and outcomes which are not predictable with assurance. The Corporation has provided for losses to the extent probable and estimable. The legal matters that have been recorded in the Corporation’s consolidated financial statements are based on gross assessments of expected settlement or expected outcome and do not reflect possible recovery from insurance companies or other parties. Additional losses, even though not anticipated, could have a material adverse effect on the Corporation’s financial position, results of operations or liquidity in any given period.

Guarantee and Indemnification Arrangements

The Corporation generally warrants its products against certain manufacturing and other defects. These product warranties are provided for specific periods of time and usage of the product depending on the nature of the product, the geographic location of its sale and other factors. The accrued product warranty costs are based primarily on historical experience of actual warranty claims as well as current information on repair costs.

The following table provides the changes in the Corporation’s accruals for estimated product warranties:


	Quarter Ended March 31,
	2012			2011
(In thousands)
Balance at beginning of period	$	3,213		$	2,574
Acquired liabilities for warranties		—			—
Liabilities accrued for warranties issued during the period		1,760			455
Warranty claims paid during the period		(709	)		(258	)
Changes in liability for pre-existing warranties during the period, including expirations		(196	)		(64	)

Balance at end of period	$	4,068		$	2,707

The Corporation also continues to monitor events that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses under the guarantees and indemnifications at fair value when those losses are estimable.

14. Merger Agreement

On January 29, 2012, Thomas & Betts Corporation, Swiss-based ABB Ltd (“ABB”) and a wholly owned subsidiary of ABB entered into a merger agreement. At the closing of the merger contemplated by the merger agreement, (i) the Corporation will become a wholly owned indirect subsidiary of ABB, and (ii) each common share of the Corporation will be converted into the right to receive $72.00 in cash (approximately $3.9 billion total purchase consideration), without interest. On March 30, 2012, the Corporation filed a definitive proxy statement in connection with the merger transaction. [On May 2, 2012, a majority of the shareholders of the Corporation’s common stock voted to approve the merger transaction.] The closing of the merger is subject to customary conditions, including certain regulatory approvals. Among other things, the merger agreement contains certain termination rights for the Corporation and ABB, and further provides that, upon termination of the merger agreement under specified circumstances, the Corporation will be obligated to pay a termination fee to ABB of $116 million.

Shortly after the announcement of the merger, five putative class action lawsuits challenging the merger were filed in the Chancery Court of Shelby County, Tennessee (the “Chancery Court”) and the United States District Court for the Western District of Tennessee (“Tennessee Federal Court”) against various combinations of Thomas & Betts, ABB, Merger Sub, the individual members of the Thomas & Betts Board of Directors, certain other Thomas & Betts officers and Deutsche Bank. The complaints generally allege that the members of the Thomas & Betts Board breached their fiduciary duties to Thomas & Betts’ shareholders by entering into the merger agreement, approving the proposed merger and failing to take steps to maximize Thomas & Betts’ value to its shareholders, and that Thomas & Betts, ABB and Merger Sub aided and abetted such breaches of fiduciary duties. The complaints also allege that the proposed merger improperly favors ABB and that certain provisions of the merger agreement unduly restrict Thomas & Betts’ ability to negotiate with other potential bidders. In addition, certain of the complaints assert claims under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder by the U.S. Securities and Exchange Commission (the “SEC”) based on allegations that the Preliminary Proxy Statement on Schedule 14A filed by Thomas & Betts with the SEC on February 17, 2012 (the “Preliminary Proxy Statement”) is materially misleading and omits material information.

The complaints generally seek, among other things, declaratory and injunctive relief, preliminary injunctive relief prohibiting or delaying the defendants from consummating the merger and other forms of equitable relief. On March 30, 2012, plaintiffs in the aforementioned shareholder litigations, along with Thomas & Betts, the individual members of the Thomas & Betts Board and certain other Thomas & Betts officers, reached an agreement in principle to settle the litigation, which was memorialized in a memorandum of understanding. Pursuant to the memorandum of understanding, Thomas & Betts included in the definitive proxy statement certain additional disclosures relating to the merger.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Thomas & Betts Corporation is a global leader in the design, manufacture, and marketing of essential components used to manage the connection, distribution, transmission and reliability of electrical power in industrial, construction and utility applications. We are also a leading producer of commercial heating and ventilation units used in commercial and industrial buildings and highly engineered steel structures used for utility transmission. We have operations in over 20 countries. Manufacturing, marketing and sales activities are concentrated primarily in North America and Europe.

Critical Accounting Policies

The preparation of financial statements contained in this report requires the use of estimates and assumptions to determine certain amounts reported as net sales, costs, expenses, assets or liabilities and certain amounts disclosed as contingent assets or liabilities. Actual results may differ from those estimates or assumptions. Our significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. We believe our critical accounting policies include the following:

•

Revenue Recognition: We recognize revenue when products are shipped and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. We recognize revenue for service agreements over the applicable service periods. Sales discounts, quantity and price rebates, and allowances are estimated based on contractual commitments and experience and recorded as a reduction of revenue in the period in which the sale is recognized. Quantity rebates are in the form of volume incentive discount plans, which include specific sales volume targets or year-over-year sales volume growth targets for specific customers. Certain distributors can take advantage of price rebates by subsequently reselling our products into targeted construction projects or markets. Following a distributor’s sale of an eligible product, the distributor submits a claim for a price rebate. A number of distributors, primarily in our Electrical segment, have the right to return goods under certain circumstances and those returns, which are reasonably estimable, are accrued as a reduction of revenue at the time of shipment. We analyze historical returns and allowances, current economic trends and specific customer circumstances when evaluating the adequacy of accounts receivable related reserves and accruals. We provide allowances for doubtful accounts when credit losses are both probable and estimable.

•

Inventory Valuation: Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. To ensure inventories are carried at the lower of cost or market, we periodically evaluate the carrying value of our inventories. We also periodically perform an evaluation of inventory for excess and obsolete items. Such evaluations are based on management’s judgment and use of estimates. Such estimates incorporate inventory quantities on-hand, aging of the inventory, sales history and forecasts for particular product groupings, planned dispositions of product lines and overall industry trends.

•

Goodwill and Other Intangible Assets: We apply the acquisition (purchase) method of accounting for all business combinations. Under this method, all assets and liabilities acquired in a business combination, including goodwill, indefinite-lived intangibles and other intangibles, are recorded at fair value. The purchase price allocation requires subjective judgments concerning estimates of the fair value of the acquired assets and liabilities. Goodwill

consists principally of the excess of cost over the fair value of net assets acquired in business combinations and is not amortized. For each amortizable intangible asset, we use a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are consumed. If that pattern cannot be reliably determined, the straight-line amortization method is used. We perform an annual impairment test of goodwill and indefinite-lived intangible assets. We perform our annual impairment assessment as of the beginning of the fourth quarter of each year, unless circumstances dictate more frequent interim assessments. In evaluating when an interim assessment of goodwill is necessary, we consider, among other things, the trading level of our common stock, our market capitalization, changes in expected future cash flows and mergers and acquisitions involving companies in our industry. In evaluating when an interim assessment of indefinite-lived intangible assets is necessary, we review for significant events or significant changes in circumstances. Our evaluation process did not result in an interim assessment of goodwill or long-lived intangible assets for recoverability for the quarter ended March 31, 2012.

In conjunction with each test of goodwill we determine the fair value of each reporting unit and compare the fair value to the reporting unit’s carrying amount. A reporting unit is defined as an operating segment or one level below an operating segment. We determine the fair value of our reporting units using a combination of three valuation methods: market multiple approach; discounted cash flow approach; and comparable transactions approach. The market multiple approach provides indications of value based on market multiples for public companies involved in similar lines of business. The discounted cash flow approach calculates the present value of projected future cash flows using appropriate discount rates. The comparable transactions approach provides indications of value based on an examination of recent transactions in which companies in similar lines of business were acquired. The fair values derived from these three valuation methods are then weighted to arrive at a single value for each reporting unit. Relative weights assigned to the three methods are based upon the availability, relevance and reliability of the underlying data. We then reconcile the total values for all reporting units to our market capitalization and evaluate the reasonableness of the implied control premium.

To the extent a reporting unit’s carrying amount exceeds its fair value, an indication exists that the reporting unit’s goodwill may be impaired, and we must perform a second more detailed impairment assessment. The second impairment assessment involves allocating the reporting unit’s fair value to all of its recognized and unrecognized assets and liabilities in order to determine the implied fair value of the reporting unit’s goodwill as of the assessment date. The implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date.

Methods used to determine fair values for indefinite-lived intangible assets involve customary valuation techniques that are applicable to the particular class of intangible asset and apply inputs and assumptions that we believe a market participant would use.

•

Long-Lived Assets: We review long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Indications of impairment require significant judgment by management. For purposes of recognizing and measuring impairment of long-lived assets, we evaluate assets at the lowest level of identifiable cash flows for associated product groups. If the sum of the undiscounted expected future cash flows over the remaining useful life of the primary asset in the associated product groups is less than the carrying amount of the assets, the

assets are considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. When fair values are not available, we estimate fair values using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the assets. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to dispose.

•

Pension and Other Postretirement Benefit Plan Actuarial Assumptions: We recognize the overfunded or underfunded status of benefit plans in our consolidated balance sheets. For purposes of calculating pension and postretirement medical benefit obligations and related costs, we use certain actuarial assumptions. Two critical assumptions, the discount rate and the expected return on plan assets, are important elements of expense and/or liability measurement. We evaluate these assumptions annually. Other assumptions include employee demographic factors (retirement patterns, mortality and turnover), rate of compensation increase and the healthcare cost trend rate. See additional information contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations — Qualified Pension Plans.

•

Income Taxes: We use the asset and liability method of accounting for income taxes. This method recognizes the expected future tax consequences of temporary differences between book and tax bases of assets and liabilities and requires an evaluation of the realizability of deferred income tax assets based on a more-likely-than-not criteria. We have valuation allowances for deferred tax assets primarily associated with foreign net operating loss carryforwards and foreign income tax credit carryforwards. Realization of the deferred tax assets is dependent upon our ability to generate sufficient future taxable income. We believe that it is more-likely-than-not that future taxable income, based on enacted tax laws in effect as of March 31, 2012, will be sufficient to realize the recorded deferred tax assets net of existing valuation allowances.

•

Environmental Costs: Environmental expenditures that relate to current operations are expensed or capitalized, as appropriate. Remediation costs that relate to an existing condition caused by past operations are accrued when it is probable that those costs will be incurred and can be reasonably estimated based on evaluations of currently available facts related to each site. The operation of manufacturing plants involves a high level of susceptibility in these areas, and requires subjective judgments by management in assessing environmental or occupational health and safety liabilities.

Summary of Consolidated Results


	Quarter Ended March 31,
	2012						2011
	In Thousands			% of Net Sales			In Thousands			% of Net Sales
Net sales	$	607,088			100.0		$	523,135			100.0
Cost of sales		407,195			67.1			359,532			68.7

Gross profit		199,893			32.9			163,603			31.3
Selling, general and administrative		115,564			19.0			104,101			19.9

Earnings from operations		84,329			13.9			59,502			11.4
Interest expense, net		(6,185	)		(1.0	)		(7,765	)		(1.5	)
Other (expense) income, net		(574	)		(0.1	)		(985	)		(0.2	)

Earnings from continuing operations before income taxes		77,570			12.8			50,752			9.7
Income tax provision		22,495			3.7			15,226			2.9

Net earnings	$	55,075			9.1		$	35,526			6.8

Earnings per share:
Basic	$	1.06					$	0.69

Diluted	$	1.03					$	0.67

2012 Compared with 2011

Overview

Net sales in the first quarter of 2012 increased from the prior-year period primarily reflecting higher organic sales volumes in our Electrical and Steel Structures segments, the positive impact of current year pricing in our Steel Structures segment and the impact of the July 2011 acquisition of AmbiRad Group (“AmbiRad”) in our HVAC segment.

Earnings from operations, both in dollars and as a percentage of sales, increased from the respective prior-year period. These improvements reflect the impact of increased organic sales volumes, increased manufacturing leverage from stronger production volumes and the impact of the 2011 AmbiRad acquisition. The first quarter of 2012 included pre-tax merger related charges of approximately $6 million. The first quarter of 2011 included facility consolidations charges of approximately $3 million.

Net earnings in the first quarter of 2012 were $55.1 million ($1.03 per diluted share) compared to net earnings of $35.5 million ($0.67 per diluted share) in the first quarter of 2011. The first quarter of 2012 included net after tax merger related charges, as described below of $3.8 million ($0.08 per diluted share). The first quarter of 2011 included net after tax facility consolidation charges, as described below of $2.3 million ($0.04 per diluted share).

Net Sales and Gross Profit

Net sales in the first quarter of 2012 were $607.1 million, up 16.1%, from the prior-year period. Higher organic sales volumes in our Electrical and Steel Structures segments and the positive impact of pricing in our Steel Structures segment positively impacted year-over-year sales in 2012. The first quarter sales increase from the prior-year period attributable to the 2011 AmbiRad acquisition was approximately $12.2 million.

Gross profit in the first quarter of 2012 was $199.9 million, or 32.9% of net sales, compared to $163.6 million or 31.3% of net sales, in the first quarter of 2011. The year-over-year increase in gross profit as a percentage of sales reflects increased manufacturing leverage from stronger production volumes and the positive impact of more favorable pricing in our Steel Structures segment. Gross profit in the first quarter of 2011 included pre-tax charges for facility consolidations of $2.4 million.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) expense in the first quarter of 2012 was $115.6 million, or 19.0% of net sales, compared to $104.1 million, or 19.9% of net sales, in the prior-year period. SG&A expense in the first quarter of 2012 includes pre-tax merger related charges of approximately $6 million. SG&A in the first quarter of 2011 also includes pre-tax charges of $0.8 million for facility consolidations.

Interest Expense, Net

Interest expense, net was $6.2 million for the first quarter of 2012, down $1.6 million from the prior-year period, primarily reflecting lower average interest rates in the current year period. Interest income included in interest expense, net was $1.1 million for the first quarter of 2012 and $0.7 million for the prior-year period.

Income Taxes

The effective tax rate from continuing operations in the first quarter of 2012 was 29.0% compared to 30.0% in the first quarter of 2011. The effective rate for both periods reflects benefits from our Puerto Rican manufacturing operations.

Net Earnings

Net earnings in the first quarter of 2012 were $55.1 million, or $1.03 per diluted share, compared to net earnings of $35.5 million, or $0.67 per diluted share, in the first quarter of 2011. Net earnings in the first quarter of 2012 include net after-tax merger related charges of $3.8 million ($0.08 per diluted share). Net earnings in the first quarter of 2011 included net after-tax facility consolidation charges of $2.3 million ($0.4 per diluted share).

Summary of Segment Results

Net Sales


	Quarter Ended March 31,
	2012				2011
	In Thousands		% of Net Sales		In Thousands		% of Net Sales
Electrical	$	483,964		79.7	$	443,520		84.8
Steel Structures		82,108		13.5		50,945		9.7
HVAC		41,016		6.8		28,670		5.5

	$	607,088		100.0	$	523,135		100.0

Segment Earnings


	Quarter Ended March 31,
	2012					2011
	In Thousands			% of Net Sales		In Thousands			% of Net Sales
Electrical	$	100,422			20.7	$	86,936			19.6
Steel Structures		19,389			23.6		4,292			8.4
HVAC		7,664			18.7		4,562			15.9

Segment earnings		127,475			21.0		95,790			18.3
Corporate expense		(19,710	)				(11,509	)
Depreciation and amortization expense		(20,220	)				(21,037	)
Share-based compensation expense		(3,216	)				(3,742	)
Interest expense, net		(6,185	)				(7,765	)
Other (expense) income, net		(574	)				(985	)

Earnings before income taxes	$	77,570				$	50,752

We have three reportable segments: Electrical, Steel Structures and HVAC. We evaluate our business segments primarily on the basis of segment earnings, with segment earnings defined as earnings before corporate expense, depreciation and amortization expense, share-based compensation expense, interest, income taxes and certain other items.

Our consolidated segment earnings are significantly influenced by the operating performance of our Electrical segment that accounts for a substantial portion of our consolidated net sales and consolidated segment earnings during the periods presented.

Electrical Segment

Electrical segment net sales in the first quarter of 2012 were $484.0 million, up $40.4 million, or 9.1%, from the first quarter of 2011. Increased organic sales volumes positively impacted year-over-year sales.

Electrical segment earnings in the first quarter of 2012 were $100.4 million, up $13.5 million, or 15.5%, from the first quarter of 2011. Segment earnings as a percentage of sales increased to 20.7% in

the first quarter of 2012 compared to 19.6% in the prior-year period. Segment earnings in the first quarter of 2011 reflect pre-tax facility consolidation charges of $2.5 million. Year-over-year segment earnings reflect improved manufacturing leverage from increased volumes, a favorable product and geographic mix and the benefits of prior-year right-sizing actions.

Steel Structures Segment

Net sales in the first quarter of 2012 in our Steel Structures segment were $82.1 million, up $31.2 million, or 61.2%, from the first quarter of 2011. The net sales increase in the first quarter reflects increased organic sales volumes, the positive price impact from the pass-through of higher year-over-year plate steel costs and a more favorable pricing environment.

Steel Structures segment earnings in the first quarter of 2012 were $19.4 million, up $15.1 million, or 351.8%, from the prior-year period. The increase in year-over-year segment earnings in dollars and as a percentage of sales in 2012 reflects the increase in project margins due to improved project mix and a more favorable pricing environment.

HVAC Segment

Net sales in the first quarter of 2012 in our HVAC segment were $41.0 million, up $12.3 million, or 43.1%, from the first quarter of 2011. The first quarter sales increase from the prior-year period attributable to the July 2011 acquisition of AmbiRad was approximately $12.2 million.

HVAC segment earnings in the first quarter of 2012 were $7.7 million, up $3.1 million, or 68.0%, from the first quarter of 2011. Increased year-over-year segment earnings as a percentage of sales in 2012 reflect the 2011 acquisition of AmbiRad. Segment earnings in the first quarter of 2011 reflect a pre-tax facility consolidation charge of $0.7 million.

Liquidity and Capital Resources

We had cash and cash equivalents of approximately $598 million and $552 million at March 31, 2012 and December 31, 2011, respectively.

The following table reflects the primary category totals in our Consolidated Statements of Cash Flows:


	Quarter Ended March 31,
	2012			2011
(In thousands)
Net cash provided by (used in) operating activities	$	600		$	(37,206	)
Net cash provided by (used in) investing activities		(10,315	)		(12,109	)
Net cash provided by (used in) financing activities		44,011			19,766
Effect of exchange-rate changes on cash		11,701			8,634

Net increase (decrease) in cash and cash equivalents	$	45,997		$	(20,915	)

Operating Activities

Cash provided by operating activities in the first quarter of 2012 included net earnings of $55.1 million, depreciation and amortization of $20.2 million and share-based compensation expense of $3.2 million, which were offset by a negative $77.7 million net change in working capital (accounts receivable, inventories and accounts payable).

Cash provided by operating activities in the first quarter of 2011 included net earnings of $35.5 million, depreciation and amortization of $21.0 million and share-based compensation expense of $3.7 million, which was offset by a negative $84.4 million net change in working capital (accounts receivable, inventories and accounts payable).

Investing Activities

During the first quarter of 2012 and 2011, we had capital expenditures to support our ongoing business plans totaling $10.5 million and $12.1 million respectively. We expect capital expenditures to be in the $65–$70 million range for the full year 2012. Capital expenditures in the first quarter of 2012 includes capacity expansion for a Steel Structures facility.

Financing Activities

Financing activities in the first quarter of 2012 included approximately 1.1 million stock options totaling $35.7 million (exercised at a weighted average exercise price of $32.84 per share) and a related $8.4 million tax benefit. Financing activities in the first quarter of 2011 included approximately 0.5 million stock options exercised at a weighted average exercise price of $36.22 per share totaling $18.5 million.

Credit Facilities

The Corporation has an unsecured, senior credit facility (“new revolving credit facility”) with total availability of $500 million and a five-year term expiring in August 2016. As of March 31, 2012 and December 31, 2011, no borrowings were outstanding under this facility. Under the new revolving credit facility agreement, the Corporation will select an interest rate at the time of its initial draw reflecting LIBOR plus a margin based on the Corporation’s credit rating or the highest rate based on several other benchmark rates, including: (i) JPMorgan Chase Bank’s New York Prime rate, (ii) the federal funds effective rate, or (iii) an adjusted LIBOR rate, plus a margin based on our credit rating.

Fees to access the facility and letters of credit are based on a pricing grid related to the Corporation’s debt ratings with Moody’s, S&P, and Fitch during the term of the facility.

The Corporation’s new revolving credit facility requires that it maintain:

•

a maximum leverage ratio of 3.75 to 1.00; and

•

a minimum interest coverage ratio of 3.00 to 1.00.

Other Credit Facilities

The Corporation has a CAN 10 million (approximately US$10.1 million) committed revolving credit facility with a Canadian bank. The Corporation pays an annual commitment fee of 20 basis points on the undrawn balance to maintain this facility. This credit facility contains standard covenants and events of default such as covenant default and cross-default. This facility matures in December 2016, and no borrowings were outstanding as of March 31, 2012 and December 31, 2011.

Other Letters of Credit

Compliance and Availability

We are in compliance with all covenants or other requirements set forth in our credit facilities. However, if we fail to be in compliance with the financial or other covenants of our credit agreements, then the credit agreements could be terminated, any outstanding borrowings under the agreements could be accelerated and immediately due, and we could have difficulty obtaining immediate credit availability to repay the accelerated obligations and in obtaining credit facilities in the future. As of March 31, 2012, the aggregate availability of funds under our credit facilities is approximately $503 million, after deducting outstanding letters of credit. Availability is subject to the satisfaction of various covenants and conditions to borrowing.

Credit Ratings

As of March 31, 2012, we had investment grade credit ratings from Standard & Poor’s (BBB rating), Moody’s Investor Service (Baa2 rating) and Fitch Ratings (BBB rating) on our senior unsecured debt. Should these credit ratings drop, repayment under our credit facilities and securities will not be accelerated; however, our credit costs may increase. Similarly, if our credit ratings improve, we could potentially have a decrease in our credit costs. The maturity of any of our debt securities does not accelerate in the event of a credit downgrade.

Debt Securities

Thomas & Betts had the following unsecured debt securities outstanding as of March 31, 2012:

Issue Date

Amount

Interest Rate

Interest Payable

Maturity Date

November 2009

$250.0 million

5.625%

May 15 and November 15

November 2021

The indentures underlying the unsecured debt securities contain standard covenants such as restrictions on mergers, liens on certain property, sale-leaseback of certain property and funded debt for certain subsidiaries. The indentures also include standard events of default such as covenant default and cross-acceleration. We are in compliance with all covenants and other requirements set forth in the indentures.

Qualified Pension Plans

Contributions to our qualified pension plans during the first quarter of 2012 were not significant. We expect required contributions to our qualified pension plans in 2012 to be minimal.

Other

The merger agreement between Thomas and Betts Corporation, ABB Ltd and a wholly owned subsidiary of ABB Ltd imposes certain restrictions on us including the ability to pay dividends, prepay debt, repurchase shares, dispose of assets and settle pending or threatened lawsuits, among other actions.

We do not currently pay cash dividends. Future decisions concerning the payment of cash dividends on the common stock will depend upon our results of operations, financial condition, strategic investment opportunities, continued compliance with credit facilities and other factors that the Board of Directors may consider relevant.

As of March 31, 2012, we have approximately $598 million in cash and cash equivalents and approximately $503 million of aggregate availability under our credit facilities. We renewed our effective universal shelf registration statement with the Securities and Exchange Commission on November 4, 2011, utilizing the well-known seasoned issuer (WKSI) process. The registration permits

us to issue common stock, preferred stock and debt securities. The registration is effective for a period of three years from the date of filing. We continue to have cash requirements to, among other things, support working capital and capital expenditure needs, service debt and fund our retirement plans as required. We generally intend to use available cash and internally generated funds to meet these cash requirements and may borrow under existing credit facilities or access the capital markets as needed for liquidity. We believe that we have sufficient liquidity to satisfy both short-term and long-term requirements.

Off-Balance Sheet Arrangements

As of March 31, 2012, we did not have any off-balance sheet arrangements.

Refer to Note 13 in the Notes to Consolidated Financial Statements for information regarding our guarantee and indemnification arrangements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Market Risk and Financial Instruments

Thomas & Betts is exposed to market risk from changes in interest rates, foreign exchange rates and raw material prices, among others. At times, we may enter into various derivative instruments to manage certain of these risks. We do not enter into derivative instruments for speculative or trading purposes.

For the period ended March 31, 2012, the Corporation has not experienced any material changes since December 31, 2011 in market risk that affect the quantitative and qualitative disclosures presented in our 2011 Annual Report on Form 10-K.

Item 4.

Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to the Corporation is made known to the Chief Executive Officer and Chief Financial Officer who certify the Corporation’s financial reports.

Our Chief Executive Officer and Chief Financial Officer have evaluated the Corporation’s disclosure controls and procedures as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

(b)

Changes in Internal Control over Financial Reporting

There have been no significant changes in internal control over financial reporting that occurred during the quarter covered by this report that have materially affected or are reasonably likely to materially affect the Corporation’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

See Note 13, “Contingencies,” in the Notes to Consolidated Financial Statements, which is incorporated herein by reference. See also Item 3. “Legal Proceedings,” in the Corporation’s 2011 Annual Report on Form 10-K, which is incorporated herein by reference.

Item 1A.

Risk Factors

There have been no material changes from the risk factors as previously set forth in our 2011 Annual Report on Form 10-K under Item 1A. “Risk Factors,” which is incorporated herein by reference.

Item 2.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table reflects activity related to equity securities purchased by the Corporation during the quarter ended March 31, 2012:

Issuer Purchases of Equity Securities


Period	Total Number of Common Shares Purchased		Average Price Paid per Common Share		Total Number of Common Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Common Shares that May Yet Be Purchased Under the Plans
September 2010 Plan (3,000,000 common shares authorized)
Total for the quarter ended March 31, 2012		—	$	—		—		1,500,000

Item 5.

Other Information

Item 6.

Exhibits

The Exhibit Index that follows the signature page of this Report is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


THOMAS & BETTS CORPORATION
(Registrant)

By:		/s/ WILLIAM E. WEAVER, JR.
		William E. Weaver, Jr.
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

Date: May 7, 2012

EXHIBIT INDEX


Exhibit No.		Description of Exhibit
10.1		Agreement and Plan of Merger dated January 29, 2012, among Thomas & Betts Corporation, ABB Ltd and Edison Acquisition Corporation (Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K dated January 30, 2012 and incorporated herein by reference).

12		Statement re Computation of Ratio of Earnings to Fixed Charges

31.1		Certification of Principal Executive Officer Under Securities Exchange Act Rules 13a-14(a) or 15d-14(a)

31.2		Certification of Principal Financial Officer Under Securities Exchange Act Rules 13a-14(a) or 15d-14(a)

32.1		Certification of Principal Executive Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and furnished solely pursuant to 18 U.S.C. § 1350 and not filed as part of the Report or as a separate disclosure document

32.2		Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and furnished solely pursuant to 18 U.S.C. §1350 and not filed as part of the Report or as a separate disclosure document

101*		Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Operations for the Quarter Ended March 31, 2012 and 2011, (ii) the Consolidated Statements of Comprehensive Income for the Quarter Ended March 31, 2012 and 2011, (iii) the Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011, (iv) the Consolidated Statements of Cash Flows for the Quarter Ended March 31, 2012 and 2011 and (v) the Notes to Consolidated Financial Statements

Pursuant to Rule 406T of Regulation S-T, the interactive data included in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections

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