UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2008
or
o	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 o

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 o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

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

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

	Outstanding Shares
Title of Each Class	at July 31, 2008
Common Stock, $.10 par value	57,583,545

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 Quarters and Six Months Ended June 30, 2008 and June 30, 2007		3
	Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007		4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and June 30, 2007		5
	Notes to Consolidated Financial Statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		33
ITEM 4.	Controls and Procedures		34
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings		35
ITEM 1A.	Risk Factors		35
ITEM 2.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		35
ITEM 4	Submission of Matters to a Vote of Security Holders		36
ITEM 6.	Exhibits		36
SIGNATURE			37
EXHIBIT INDEX			38
Statement re Computation of Ratio of Earnings to Fixed Charges
Certification of Principal Executive Officer
Certification of Principal Financial Officer
Certification of Principal Executive Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b)
Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b)

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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.^(a) Forward-looking statements contain words such as:

• “achieve”	• “anticipates”	• “intends”
• “should”	• “expects”	• “predict”
• “could”	• “might”	• “will”
• “may”	• “believes”	• other similar expressions

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 the Report to reflect any future events or circumstances.

^(a) These risks and uncertainties, which are further explained in Item 1A. Risk Factors in our Form 10-K for the year ended December 31, 2007, include:

•  negative economic conditions could have a material adverse effect on our operating results and financial condition;

•  a significant reduction in the supply of commodity raw materials could materially disrupt our business and rising and volatile costs for commodity raw materials and energy could have a material adverse effect on our profitability;

•  significant changes in customer demand due to increased competition could have a material adverse effect on our operating results and financial condition.

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

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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 June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net sales	$	641,317		$	507,238		$	1,236,821		$	981,790
Cost of sales		441,342			352,431			850,585			682,118
Gross profit		199,975			154,807			386,236			299,672
Selling, general and administrative		100,489			84,532			216,774			171,861
Earnings from operations		99,486			70,275			169,462			127,811
Interest expense, net		(11,768	)		(3,446	)		(24,100	)		(6,997	)
Other (expense) income, net		(670	)		640			(1,947	)		480
Gain on sale of equity interest		169,684			—			169,684			—
Earnings before income taxes		256,732			67,469			313,099			121,294
Income tax provision		108,692			20,916			126,898			37,601
Net earnings from continuing operations		148,040			46,553			186,201			83,693
Loss from discontinued operations, net		(200	)		—			(109	)		—
Net earnings	$	147,840		$	46,553		$	186,092		$	83,693
Basic earnings per share:
Continuing operations	$	2.56		$	0.81		$	3.22		$	1.44
Discontinued operations		—			—			—			—
Net earnings	$	2.56		$	0.81		$	3.22		$	1.44
Diluted earnings per share:
Continuing operations	$	2.54		$	0.80		$	3.20		$	1.42
Discontinued operations		—			—			—			—
Net earnings	$	2.54		$	0.80		$	3.20		$	1.42
Average shares outstanding:
Basic		57,819			57,649			57,788			58,191
Diluted		58,246			58,459			58,230			58,980

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

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Thomas & Betts Corporation and Subsidiaries

Consolidated Balance Sheets
(In thousands)
(Unaudited)

	June 30,			December 31,
ASSETS	2008			2007
Current Assets
Cash and cash equivalents	$	288,085		$	149,926
Restricted cash		8,500			16,683
Receivables, net		339,652			280,948
Inventories		324,839			271,989
Deferred income taxes		39,827			57,278
Other assets		15,919			22,613
Assets of discontinued operations		101,401			106,478
Total Current Assets		1,118,223			905,915
Gross property, plant and equipment		941,383			915,944
Less accumulated depreciation		(628,703	)		(609,985	)
Net property, plant and equipment		312,680			305,959
Goodwill		924,461			873,574
Other intangible assets:
Amortizable		205,845			197,727
Indefinite lived		116,370			101,643
Total other intangible assets		322,215			299,370
Investments in unconsolidated companies		5,360			115,300
Other assets		65,109			67,668
Total Assets	$	2,748,048		$	2,567,786
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current maturities of long-term debt	$	152,142		$	116,157
Accounts payable		206,508			180,333
Accrued liabilities		158,377			143,606
Income taxes payable		100,281			10,731
Liabilities of discontinued operations		24,338			18,146
Total Current Liabilities		641,646			468,973
Long-Term Liabilities
Long-term debt		512,364			695,048
Deferred income taxes		36,516			48,888
Other long-term liabilities		127,321			125,943
Contingencies (Note 13)
Shareholders’ Equity
Common stock		5,783			5,770
Additional paid-in capital		219,193			207,690
Retained earnings		1,188,089			1,001,997
Accumulated other comprehensive income		17,136			13,477
Total Shareholders’ Equity		1,430,201			1,228,934
Total Liabilities and Shareholders’ Equity	$	2,748,048		$	2,567,786

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

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Thomas & Betts Corporation and Subsidiaries

Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2008			2007
Cash Flows from Operating Activities:
Net earnings	$	186,092		$	83,693
Adjustments:
Depreciation and amortization		43,198			25,116
Share-based compensation expense		9,835			8,272
Deferred income taxes		1,788			6,989
Incremental tax benefits from share-based payment arrangements		(583	)		(5,062	)
Gain on sale of equity interest		(169,684	)		—
Changes in operating assets and liabilities, net:
Receivables		(54,371	)		(52,440	)
Inventories		(37,089	)		(4,351	)
Accounts payable		30,180			15,047
Accrued liabilities		(17,773	)		8,588
Income taxes payable		96,611			4,504
Lamson & Sessions Co. change in control payments		(12,685	)		—
Other		8,961			434
Net cash provided by (used in) operating activities		84,480			90,790
Cash Flows from Investing Activities:
Purchases of property, plant and equipment		(18,690	)		(17,628	)
Purchases of businesses, net of cash acquired		(90,571	)		—
Proceeds from sale of equity interest, net		280,000			—
Obligation from sale of equity interest		20,000			—
Restricted cash used for change in control payments		8,183			—
Other		245			296
Net cash provided by (used in) investing activities		199,167			(17,332	)
Cash Flows from Financing Activities:
Repayment of debt and other borrowings		(116,407	)		(197	)
Revolving credit facility proceeds (repayments), net		(30,000	)		—
Stock options exercised		1,068			18,778
Incremental tax benefits from share-based payment arrangements		583			5,062
Repurchase of common shares		—			(132,958	)
Net cash provided by (used in) financing activities		(144,756	)		(109,315	)
Effect of exchange-rate changes on cash		(732	)		3,041
Net increase (decrease) in cash and cash equivalents		138,159			(32,816	)
Cash and cash equivalents, beginning of period		149,926			370,968
Cash and cash equivalents, end of period	$	288,085		$	338,152
Cash payments for interest	$	26,921		$	13,760
Cash payments for income taxes	$	27,468		$	26,678

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

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Thomas & Betts Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1.   Basis of Presentation

In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary for the fair presentation of the Corporation’s financial position as of June 30, 2008 and December 31, 2007 and the results of operations and cash flows for the periods ended June 30, 2008 and 2007.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. 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, 2007. The results of operations for the periods ended June 30, 2008 and 2007 are not necessarily indicative of the operating results for the full year.

Certain reclassifications have been made to the prior-year period to conform to the current year presentation of segment disclosures.

2.   Basic and Diluted Earnings Per Share

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

	Quarter Ended					Six Months Ended
	June 30,					June 30,
	2008			2007		2008			2007
(In thousands, except per share data)
Net earnings from continuing operations	$	148,040		$	46,553	$	186,201		$	83,693
Earnings from discontinued operations, net of tax		(200	)		—		(109	)		—
Net earnings	$	147,840		$	46,553	$	186,092		$	83,693
Basic shares:
Average shares outstanding		57,819			57,649		57,788			58,191
Basic earnings per share:
Net earnings from continuing operations	$	2.56		$	0.81	$	3.22		$	1.44
Earnings from discontinued operations, net of tax		—			—		—			—
Net earnings	$	2.56		$	0.81	$	3.22		$	1.44
Diluted shares:
Average shares outstanding		57,819			57,649		57,788			58,191
Additional shares on the potential dilution from stock options and nonvested restricted stock		427			810		442			789
		58,246			58,459		58,230			58,980
Diluted earnings per share:
Net earnings from continuing operations	$	2.54		$	0.80	$	3.20		$	1.42
Earnings from discontinued operations, net of tax		—			—		—			—
Net earnings	$	2.54		$	0.80	$	3.20		$	1.42

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 options were 1.7 million shares of common stock for the second quarter of 2008 and 0.3 million shares of common stock for the second quarter of

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2007. Out-of-the money options were 1.6 million shares of common stock for the first six months of 2008 and 0.3 million shares of common stock for the first six months of 2007.

3.   Acquisitions

The Lamson & Sessions Co.

The merger of The Lamson & Sessions Co. (“LMS”) into Thomas & Betts Corporation was completed in November 2007 for approximately $450 million. LMS is a North American supplier of non-metallic electrical boxes, fittings, flexible conduit, and PVC and HDPE pipe. The LMS acquisition broadened the Corporation’s existing product portfolio and enhanced its market position with distributors and end users of electrical products. As a result of the merger, LMS became a wholly-owned subsidiary of Thomas & Betts Corporation. Thomas & Betts Corporation funded the LMS acquisition through the use of its $750 million revolving credit facility. The results of these operations have been included in the consolidated financial statements of the Corporation since the acquisition date.

The following table summarizes preliminary estimates and assumptions of fair values for the assets acquired and liabilities assumed at the date of acquisition (November 2007):

(In millions)
Current assets (primarily receivables and inventories)	$	151
Property, plant and equipment		69
Long-term assets		16
Goodwill and other intangible assets		409
Total assets acquired		645
Current liabilities		(93	)
Long-term liabilities		(97	)
Net assets acquired	$	455

The purchase price allocation as of June 30, 2008 is preliminary since the restructuring and integration plan does not reflect final restructuring costs associated with the divestiture of the PVC and HDPE pipe businesses, which have not yet been completed as of that date.

Of the $409 million of goodwill and other intangible assets, approximately $60 million has been assigned to intangible assets with infinite lives (consisting of trade/brand names) and approximately $123 million has been assigned to intangible assets with estimated lives ranging up to 11 years (consisting primarily of customer relations). Goodwill and other intangible assets are not deductible for tax purposes. All of the goodwill and other intangible assets have been assigned to the Corporation’s Electrical segment. Amortization of other intangible assets is included in selling, general and administrative expenses in the Corporation’s consolidated statement of operations.

The Corporation has decided to divest its rigid polyvinyl chloride (PVC) and high-density polyethylene (HDPE) conduit, duct and pressure pipe businesses, which were acquired as part of the LMS acquisition. These products are used in the construction, industrial, municipal, utility and telecommunications markets. The Corporation has retained a financial advisor to assist with the sale of these operations. The operations associated with this business have been reflected as discontinued operations in the accompanying statement of operations and the assets and liabilities associated with this business have been reflected as held-for-sale in the accompanying balance sheet as of June 30, 2008 and December 31, 2007. Results from discontinued operations in the second quarter of 2008 reflected net sales of approximately $56 million, loss before income taxes of $0.4 million, an income tax benefit of $0.2 million and net loss of $0.2 million. Results from discontinued operations

7

for the first six months of 2008 reflected net sales of approximately $105 million, loss before income taxes of $0.2 million, an income tax benefit of $0.1 million and net loss of $0.1 million.

The Corporation’s senior management began assessing and formulating a restructuring and integration plan as of the acquisition date of LMS. Approval of the plan by the Corporation’s senior management and Board of Directors occurred during the first quarter of 2008. The objective of the restructuring and integration plan is to achieve operational efficiencies and eliminate duplicative operating costs resulting from the LMS acquisition. The Corporation also intends to achieve greater efficiency in sales, marketing, administration and other operational activities. The Corporation identified certain liabilities and other costs totaling approximately $26 million for restructuring and integration actions. Included in this amount are approximately $11 million of planned severance costs for involuntary termination of approximately 290 employees of LMS and approximately $8 million of lease cancellation costs associated with the planned closure of LMS distribution centers, which have been recorded as part of the Corporation’s preliminary purchase price allocation of LMS. Severance and lease cancellation costs have been reflected in the Corporation’s balance sheet in accrued liabilities and reflect cash paid or to be paid for these actions. Integration costs will be recognized as incurred, either as expense or capital, as appropriate. The amount recognized in cost of goods sold as integration expense during the second quarter of 2008 totaled less than $1 million, with the amount recognized during the first six months of 2008 totalling approximately $3 million. The actions required by the plan began soon after the plan was approved, including the communication to affected employees of the Corporation’s intent to terminate as soon as possible.

As of June 30, 2008, the Corporation has ceased operations at all LMS distribution centers, consolidated these activities into its existing distribution centers and is in the process of negotiating lease terminations. Also as of June 30, 2008, the Corporation has involuntarily terminated approximately 240 employees of LMS. Payments associated with certain of the restructuring and integration actions taken are expected to extend beyond 2008 due to compliance with applicable regulations and other considerations. The cash payments necessary to fund the plan are expected to come from operations or available cash resources.

Activities related to LMS restructuring during the quarter ended June 30, 2008 are as follows:

	Work Force			Facility
	Reductions			Closures			Total
(In millions)
Balance at March 31, 2008	$	10.4		$	8.1		$	18.5
Restructuring accrual additions		—			—			—
Cost/payments charged against reserves		(1.8	)		(1.2	)		(3.0	)
Balance at June 30, 2008	$	8.6		$	6.9		$	15.5

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Activities related to LMS restructuring during the six months ended June 30, 2008 are as follows:

	Work Force			Facility
	Reductions			Closures			Total
(In millions)
Balance at December 31, 2007	$	—		$	—		$	—
Restructuring accrual additions		10.6			8.1			18.7
Costs/payments charged against reserves		(2.0	)		(1.2	)		(3.2	)
Balance at June 30, 2008	$	8.6		$	6.9		$	15.5

The Homac Manufacturing Company

In January 2008, the Corporation acquired The Homac Manufacturing Company, a privately held manufacturer of components used in utility distribution and substation markets, as well as industrial and telecommunications markets, for approximately $75 million. The purchase price allocation resulted in goodwill of approximately $25 million and other intangible assets of approximately $25 million, all of which was assigned to the Corporation’s Electrical segment. The results of these operations have been included in the consolidated financial statements of the Corporation since the acquisition date.

Boreal Braidings Inc.

In January 2008, the Corporation acquired Boreal Braidings Inc., a privately held Canadian manufacturer of high-quality flexible connectors for approximately $16 million. The purchase price allocation resulted in goodwill of approximately $7 million and other intangible assets of approximately $8 million, all of which was assigned to the Corporation’s Electrical segment. The results of these operations have been included in the consolidated financial statements of the Corporation since the acquisition date.

4.   Share-Based Payment Arrangements

Share-based compensation expense, net of tax, of $2.1 million was charged against income during the second quarter of 2008 and $1.9 million was charged against income during the second quarter of 2007. During the second quarter of 2008, the Corporation granted 2,800 stock options with a weighted average exercise price of $36.55 per share and an average grant date fair value of $10.33 per share, had 25,539 stock options exercised at a weighted average exercise price of $23.40 per share and had 57,427 stock options forfeited or expired. Also during the second quarter of 2008, the Corporation granted 12,658 shares of nonvested restricted stock with a weighted average grant date fair value of $35.55 per share.

Share-based compensation expense, net of tax, of $6.1 million was charged against income during the first six months of 2008 and $5.1 million was charged against income during the first six months of 2007. The net of tax share-based compensation expense reflected accelerated amortization over periods shorter than the stated service periods of approximately $3 million during the first six months of 2008 and approximately $2 million during the first six months of 2007. The accelerated amortization relates to share award grants to certain employees who are retirement eligible. During the first six months of 2008, the Corporation granted 723,645 stock options with a weighted average exercise price of $44.28 per share and an average grant date fair value of $13.46 per share, had 46,003 stock options exercised at a weighted average exercise price of $23.19 per share and had 110,506 stock options forfeited or expired. Also, during the first six months of 2008, the Corporation granted 135,567 shares of nonvested restricted stock with a weighted average grant date fair value of $43.49 per share.

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During the second quarter of 2008, the Corporation, under its Non-Employee Directors Equity Compensation Plan, granted non-employee members of the Board of Directors a total of 12,658 shares of common stock with a weighted average grant date fair value of $35.55 that vested upon issuance. During the second quarter of 2007, the Corporation, under its Non-Employee Directors Equity Compensation Plan, granted non-employee members of the Board of Directors a total of 8,028 shares of common stock with a grant date fair value of $56.00 that vested upon issuance. Compensation expense, net of tax, of $0.3 million associated with these stock awards was recognized as of the grant date and expensed to SG&A in both the second quarter of 2008 and second quarter of 2007.

5.   Gain on Sale of Equity Interest

During the second quarter of 2008, the Corporation sold its entire minority interest (29.1 percent) in Leviton Manufacturing Company (“Leviton”) back to Leviton for net proceeds of $280 million. Net proceeds reflect $300 million from Leviton, which was offset in part by a $20 million contingent payment triggered by the sale of shares. The transaction resulted in a pre-tax gain of approximately $170 million. In the event of any subsequent sale of Leviton shares within the next 3 years at a price per share higher than the value reflected in this transaction, Leviton has agreed to pay the Corporation its pro-rata share of the excess.

6.   Income Taxes

The Corporation’s income tax provision for the quarter ended June 30, 2008 was $108.7 million, or an effective rate of 42.3% of pre-tax income, compared to a tax provision for the quarter ended June 30, 2007 of $20.9 million, or an effective rate of 31.0% of pre-tax income. The Corporation’s income tax provision for the six months ended June 30, 2008 was $126.9 million, or an effective rate of 40.5% of pre-tax income, compared to a tax provision for the six months ended June 30, 2007 of $37.6 million, or an effective rate of 31.0% of pre-tax income. The increase in the effective rate over the prior-year periods reflects the second quarter 2008 gain on sale of equity interest and an out-of-period, non-cash tax charge of $14.0 million related to deferred income taxes. The effective rate for both years also reflects benefits from our Puerto Rican manufacturing operations which has a significantly lower effective tax rate than the Corporation’s overall blended tax rate.

The second quarter 2008 income tax provision includes a $14.0 million non-cash charge to establish a deferred federal income tax liability related to the 2006 reversal of a valuation allowance on state net operating loss and state income tax credit carryforwards incurred in prior years. As these carryforwards are subsequently utilized for state income tax purposes, the associated deferred federal income tax liability and the income tax provision will be reduced.

The Corporation had deferred tax assets net of deferred tax liabilities of $3.5 million as of June 30, 2008 and $8.4 million as of December 31, 2007. 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 June 30, 2008, will be sufficient to realize the recorded deferred tax assets, net of any valuation allowance.

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7.   Comprehensive Income

Total comprehensive income and its components are as follows:

	Quarter Ended June 30,						Six Months Ended June 30,
	2008			2007			2008		2007
(In thousands)
Net earnings	$	147,840		$	46,553		$	186,092	$	83,693
Unrealized gain (loss) on interest rate swap		9,342			—			223		—
Cumulative translation adjustment		(456	)		20,936			1,251		23,583
Defined benefit pension and other postretirement plans		1,736			1,035			2,185		2,035
Unrealized gain (loss) on marketable securities		—			(1	)		—		(2	)
Comprehensive income	$	158,462		$	68,523		$	189,751	$	109,309

8.   Derivative Instruments

The Corporation is exposed to market risk from changes in interest rates, foreign-exchange rates and raw material prices. 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 Agreements

During the fourth quarter of 2007, the Corporation entered into a forward-starting interest rate swap for a notional amount of $390 million. The notional amount reduces to $325 million on December 15, 2010, $200 million on December 15, 2011 and $0 on October 1, 2012. The interest rate swap hedges $390 million of the Corporation’s exposure to changes in interest rates on borrowings of its $750 million credit facility. The Corporation has designated the interest rate swap as a cash flow hedge for accounting purposes. Under the interest rate swap, the Corporation receives variable one-month LIBOR and pays an underlying fixed rate of 4.86%.

On January 1, 2008, the Corporation adopted Financial Accounting Standard (SFAS) No. 157, “Fair Value Measurements,” for measuring “financial” assets and liabilities. SFAS 157 defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a framework for measuring fair value by creating 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 has been reflected at its fair value liability of $13.2 million as of June 30, 2008. This swap is measured at fair value on a recurring basis 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 was the income approach. This approach represents the present value of future cash

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flows based upon current market expectations. The credit valuation adjustment (reduction in the liability) was determined to be $0.1 million as of June 30, 2008.

The following is a reconciliation of the fair value activity associated with the interest rate swap liability during the first six months of 2008:

	Fair Value Measures (Level 3)
	Quarter Ended			Six months Ended
	June 30, 2008			June 30, 2008
(In millions)
Asset (liability) at beginning of period	$	(28.3	)	$	(13.6	)
Total realized/unrealized gains or losses:
Included in earnings		—			—
Increase (decrease) in fair value included in other comprehensive income		15.1			0.4
Asset (liability) at end of period	$	(13.2	)	$	(13.2	)

As of June 30, 2008, the Corporation’s balance of accumulated other comprehensive income has been reduced by $7.9 million, net of tax, to reflect the above interest rate swap liability.

During the first six months of 2007, the Corporation had no outstanding interest rate swap agreements.

Forward Foreign Exchange Contracts

During the fourth quarter of 2007, the Corporation entered into currency forward exchange contracts that are not designated as a hedge for accounting purposes. These contracts are intended to reduce cash flow volatility from exchange rate risk related to a short-term intercompany financing transaction. As of June 30, 2008, there were five individual outstanding contracts for an aggregate notional amount of approximately $18 million, which amortize monthly to zero through November 2008. Under the terms of the contracts, the Corporation sells U.S. dollars at current spot rates and purchases Canadian dollars at a fixed forward exchange rate. During the second quarter and first six months of 2008, the Corporation recognized a mark-to-market gain (loss) on these contracts of $0.3 million and $(0.9) million, respectively, that effectively matched foreign exchange losses and gains on the short-term intercompany financing transaction. The currency forward exchange contracts have been reflected in the balance sheet at a fair value liability of $0.2 million as of June 30, 2008. The Corporation’s fair value estimate was determined using quoted prices for instruments with similar underlying terms (Level 2).

During the first six months of 2007, the Corporation had no outstanding forward sale or purchase contracts.

Commodities Futures Contracts

During the first six months of 2008 and 2007, the Corporation had no outstanding commodities futures contracts. 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 fixed the price the Corporation paid for a commodity.

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9.   Inventories

The Corporation’s inventories at June 30, 2008 and December 31, 2007 were:

	June 30,		December 31,
	2008		2007
(In thousands)
Finished goods	$	160,280	$	133,445
Work-in-process		38,548		34,564
Raw materials		126,011		103,980
Total inventories	$	324,839	$	271,989

10.   Debt

The Corporation’s long-term debt at June 30, 2008 and December 31, 2007 was:

	June 30,		December 31,
	2008		2007
(In thousands)
Revolving credit facility	$	390,000	$	420,000
Unsecured notes
6.63% Notes due May 2008		—		114,956
6.39% Notes due February 2009		149,965		149,939
7.25% Notes due June 2013		121,301		120,931
Other, including capital leases		3,240		5,379
Long-term debt (including current maturities)		664,506		811,205
Less current portion		152,142		116,157
Long-term debt	$	512,364	$	695,048

During the second quarter of 2008, the Corporation paid off $115 million of unsecured notes as they became due and $2.6 million of industrial revenue bonds related to a recent acquisition.

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’s $750 million revolving credit facility has a five-year term expiring in October 2012. All borrowings and other extensions of credit under the Corporation’s 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 revolving credit facility may be used for general operating needs and for other general corporate purposes in compliance with the terms of the facility. The Corporation pays an annual commitment fee to maintain this facility of 10 basis points. Outstanding borrowings under this facility at June 30, 2008 were $390 million and at December 31, 2007 were $420 million.

Under the revolving credit facility agreement, the Corporation selected an interest rate on its initial draw of the revolver based on the one-month LIBOR plus a margin based on the Corporation’s debt rating. Fees to access the facility and letters of credit under the facility are based

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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 amended and restated revolving credit facility requires that it maintain:

•  a maximum leverage ratio of 4.00 to 1.00 through December 31, 2008, then a ratio of 3.75 to 1.00 thereafter; and

•  a minimum interest coverage ratio of 3.00 to 1.00.

It 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. The Corporation does not expect these covenants to restrict its liquidity, financial condition, or access to capital resources in the foreseeable future.

Outstanding letters of credit which reduced availability under the credit facility, amounted to $11.5 million at June 30, 2008. The letters of credit relate primarily to third-party insurance claims processing.

The Corporation has a EUR 10.0 million (approximately US$15.6 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 similar to those contained in the $750 million credit agreement and standard events of default such as covenant default and cross-default. This facility has an indefinite maturity and no borrowings were outstanding as of June 30, 2008 and December 31, 2007.

Outstanding letters of credit which reduced availability under the European facility amounted to EUR 0.1 million (approximately US$0.1 million) at June 30, 2008.

As of June 30, 2008, the Corporation’s aggregate availability of funds under its credit facilities is approximately $364.0 million, after deducting certain 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.

The Corporation is in compliance with all covenants or other requirements set forth in its credit facilities.

As of June 30, 2008, the Corporation also had letters of credit in addition to those noted above that do not reduce availability under the Corporation’s credit facilities. The Corporation had $27.9 million of such additional letters of credit that relate primarily to third-party insurance claims processing, performance guarantees and acquisition obligations.

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11.   Pension and Other Postretirement Benefits

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

	Quarter Ended
							Other
							Postretirement
	Pension Benefits						Benefits
	June 30,			June 30,			June 30,			June 30,
	2008			2007			2008			2007
(In thousands)
Service cost	$	3,019		$	2,506		$	25		$	(2	)
Interest cost		7,845			5,598			356			246
Expected return on plan assets		(9,942	)		(7,765	)		—			—
Plan net loss (gain)		906			968			95			181
Prior service cost (gain)		309			270			(56	)		(56	)
Transition obligation (asset)		(3	)		(4	)		189			189
Curtailment loss (gain)		—			—			(477	)		—
Net periodic benefit cost	$	2,134		$	1,573		$	132		$	558

	Six Months Ended
							Other
							Postretirement
	Pension Benefits						Benefits
	June 30,			June 30,			June 30,			June 30,
	2008			2007			2008			2007
(In thousands)
Service cost	$	6,019		$	5,476		$	56		$	59
Interest cost		15,218			10,914			717			490
Expected return on plan assets		(19,915	)		(14,839	)		—			—
Plan net loss (gain)		1,251			2,085			170			281
Prior service cost (gain)		572			529			(112	)		(112	)
Transition obligation (asset)		(7	)		(8	)		383			383
Curtailment loss (gain)		—			—			(477	)		—
Net periodic benefit cost	$	3,138		$	4,157		$	737		$	1,101

Contributions to our qualified pension plans during the quarters and six months ended June 30, 2008 and 2007 were not significant. The Corporation expects required contributions during the remainder of 2008 to our qualified pension plans to be minimal.

Effective January 1, 2008, entry into the Thomas & Betts Pension Plan is precluded to newly hired eligible employees. Also effective January 1, 2008, the Corporation amended the Thomas & Betts Employees’ Investment Plan to provide a 3% non-elective company contribution to newly hired eligible employees in addition to the existing company match.

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12.   Segment Disclosures

The Corporation has three reportable segments: Electrical, Steel Structures and HVAC. The Electrical segment designs, manufactures and markets thousands of different electrical connectors, components and other products for electrical, utility and communications applications. The Steel Structures segment designs, manufactures and markets highly engineered tubular steel transmission and distribution poles. The Steel Structures segment also markets lattice steel transmission towers for power and telecommunications companies which are sourced from third parties. The HVAC segment designs, manufactures and markets heating and ventilation products for commercial and industrial buildings.

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.

As a result of the Corporation’s decision to divest the PVC and HDPE pipe operations acquired as part of Lamson & Sessions Co., operating results for the pipe business are reported as “discontinued operations” and are shown on a net basis on the consolidated financial statements. These results are not included in segment reporting.

	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
(In thousands)
Net Sales
Electrical	$	550,795		$	418,033		$	1,059,565		$	807,199
Steel Structures		56,431			57,082			108,391			110,112
HVAC		34,091			32,123			68,865			64,479
Total	$	641,317		$	507,238		$	1,236,821		$	981,790
Segment Earnings
Electrical	$	110,826		$	84,892		$	206,947		$	161,736
Steel Structures		10,545			9,955			20,587			19,945
HVAC		6,160			5,123			11,795			10,812
Segment earnings		127,531			99,970			239,329			192,493
Corporate expense		(3,572	)		(13,852	)		(16,834	)		(31,294	)
Depreciation and amortization expense		(21,158	)		(12,772	)		(43,198	)		(25,116	)
Share-based compensation expense		(3,315	)		(3,071	)		(9,835	)		(8,272	)
Interest expense, net and other (expense) income, net		(12,438	)		(2,806	)		(26,047	)		(6,517	)
Gain on sale of equity interest		169,684			—			169,684			—
Earnings before income taxes	$	256,732		$	67,469		$	313,099		$	121,294

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13.   Contingencies

Legal Proceedings

Kaiser Litigation

By July 2000, Kaiser Aluminum, its property insurers, 28 Kaiser injured workers, nearby businesses and a class of 18,000 residents near the Kaiser facility in Louisiana, filed product liability and business interruption cases against the Corporation and nine other defendants in Louisiana state court seeking damages in excess of $550 million. These cases alleged that a Thomas & Betts cable tie mounting base failed, thereby allowing bundled cables to come in contact with a 13.8 kV energized bus bar. This alleged electrical fault supposedly initiated a series of events culminating in an explosion, which leveled 600 acres of the Kaiser facility.

A trial in the fall 2001 resulted in a jury verdict in favor of the Corporation. However, 13 months later, the trial court overturned that verdict in granting plaintiffs’ motions for judgment notwithstanding the verdict. In December 2002, the trial court judge found the Thomas & Betts product, an adhesive backed mounting base, to be unreasonably dangerous and therefore assigned 25% fault to Thomas & Betts. The judge set the damages for an injured worker at $20 million and the damages for Kaiser at $335 million. The judgment did not address damages for nearby businesses or the class of 18,000 residents near the Kaiser facility. The Corporation’s 25% allocation was $88.8 million, plus legal interest. The Corporation appealed to the Louisiana Court of Appeals, an intermediate appellate court. The appeal required a bond in the amount of $104 million (the judgment plus legal interest). Plaintiffs successfully moved the trial court to increase the bond to $156 million. The Corporation’s liability insurers secured the $156 million bond. As a result of court decisions, such bonds have subsequently been released.

In 2004, the Corporation and the class of 18,000 residents reached a court-approved settlement. The settlement extinguished the claims of all class members and included indemnity of the Corporation against future potential claims asserted by class members or those class members who opted out of the settlement process. The $3.75 million class settlement amount was paid directly by an insurer of the Corporation.

In March 2006, the Louisiana Court of Appeals unanimously reversed the trial court’s decision and reinstated the jury verdict of no liability in favor of the Corporation. In April 2006, the Kaiser plaintiffs filed with the Louisiana Supreme Court an appeal of the Court of Appeals decision. In May 2006, the Louisiana Supreme Court refused to accept the plaintiffs’ appeal. The Louisiana Supreme Court let stand the appellate court decision to reinstate the jury verdict of no liability in favor of the Corporation. In August 2006, the plaintiffs initiated a new appeal of the original jury verdict. The Court of Appeals dismissed that appeal. The Kaiser plaintiffs filed an additional motion for a new trial at the trial court level.

The injured worker who was a separate plaintiff and whose earlier judgment against the Corporation was reversed sought relief from the trial court arguing that Thomas & Betts never appealed the $20 million award the injured worker received. The trial court agreed, but the Louisiana Court of Appeals immediately reversed that decision. The injured worker then appealed this ruling to the Louisiana Supreme Court, which refused to hear the appeal. In January 2007, the injured worker unsuccessfully petitioned the United States Supreme Court for a hearing on his claim. The injured worker then joined the Kaiser plaintiffs’ attempts to secure a new trial.

In late 2007, the trial court granted the Kaiser plaintiffs’ motion for a new trial. The Corporation immediately appealed, arguing that the March 2006 decision of the Court of Appeals had become final. In January 2008, the Court of Appeals agreed with the Corporation and reversed

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the trial court’s ruling. In February 2008, the Kaiser plaintiffs filed an application requesting review by the Louisiana Supreme Court. In May 2008, the Louisiana Supreme Court denied the Kaiser plaintiffs’ application for review. The Court of Appeals ruling in favor of the Corporation stands as the final judgment on this lawsuit.

Other Legal Matters

The Corporation is also 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 and 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 considers the gross probable liability when determining whether to accrue for a loss contingency for a legal matter. 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. 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 follows the provisions of FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” The Interpretation requires the Corporation to recognize the fair value of guarantee and indemnification arrangements issued or modified by the Corporation, if these arrangements are within the scope of that Interpretation. In addition, under previously existing generally accepted accounting principles, the Corporation continues to monitor the conditions that are subject to the 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 when those losses are estimable.

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.

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

	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
(In thousands)
Balance at beginning of period	$	4,057		$	1,341		$	3,894		$	1,737
Liabilities accrued for warranties issued during the period		1,160			339			1,635			622
Deductions for warranty claims paid during the period		(1,287	)		(387	)		(1,854	)		(1,232	)
Changes in liability for pre-existing warranties during the period, including expirations		(165	)		119			90			285
Balance at end of period	$	3,765		$	1,412		$	3,765		$	1,412

In conjunction with the divestiture of the Corporation’s Electronics OEM business to Tyco Group S.A.R.L. in July 2000, the Corporation provided an indemnity to Tyco associated with environmental liabilities that were not known as of the sale date. Under this indemnity, the Corporation continues to be liable for certain subsequently identified environmental claims up to $2 million. To date, environmental claims by Tyco have been negligible.

14.   Recently Issued Accounting Standards

Effective January 1, 2008, the Corporation adopted SFAS No. 157, “Fair Value Measurements,” for measuring “financial” assets and liabilities. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The provisions of SFAS No. 157 related to certain “nonfinancial” assets and liabilities are effective for the Corporation’s financial statements beginning in 2009. The Corporation has not yet evaluated the impact, if any, of this remaining requirement.

Effective December 31, 2006, the Corporation adopted the recognition and disclosure provisions of SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” requiring recognition of the overfunded or underfunded status of benefit plans on its balance sheet. SFAS No. 158 also eliminates the use of “early measurement dates” to account for certain of the Corporation’s pension and other postretirement plans effective December 31, 2008. The Corporation has not yet evaluated the impact of eliminating the use of early measurement dates.

In February 2007, the Financial Accounting Standards Board issued SFAS No. 159, “The Fair Value Option for Financial Assets and Liabilities — Including an amendment of FASB Statement No. 115.” SFAS No. 159 gives companies the option to choose to measure many financial instruments and certain other items at fair value. The Corporation has adopted SFAS No. 159 effective January 1, 2008 and has elected not to measure any additional financial assets and liabilities at fair value.

In December 2007, the Financial Accounting Standards Board issued SFAS No. 141 (Revised), “Business Combinations.” SFAS No. 141R replaces SFAS No. 141 while retaining the fundamental requirements in SFAS No. 141 that the acquisition (purchase) method of accounting be used for all business combinations. SFAS No. 141R retains SFAS No. 141 guidance for identifying and recognizing intangible assets separately from goodwill and makes certain changes to how the acquisition (purchase) method is applied. SFAS No. 141R is to be applied prospectively to business

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combinations for which the acquisition date is after December 31, 2008. SFAS 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time.

In December 2007, the Financial Accounting Standards Board issued SFAS No. 160, “Noncontrolling Interest in Consolidated Financial Statements — an amendment of ARB No. 51.” SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest (sometimes called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary and to provide consistency with SFAS No. 141. SFAS No. 160 is effective for the Corporation’s financial statements beginning in 2009. The Corporation has not yet evaluated the impact, if any, of this requirement.

In March 2008, the Financial Accounting Standards Board issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133.” SFAS No. 161 changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for the Corporation’s financial statements beginning in 2009. The Corporation has not yet evaluated the impact, if any, of this requirement.

15.   Subsequent Event

On July 31, 2008, the Corporation completed the sale of the PVC pipe portion of the held-for-sale operations that were acquired as part of the LMS acquisition. The purchase price was approximately $45 million. The Corporation is in discussions to sell the remaining HDPE business. The Corporation has also entered into a definitive agreement to sell certain real estate assets, subject to customary conditions including due diligence and approval by the purchaser’s board of directors.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Introduction

Thomas & Betts Corporation is a leading designer and manufacturer of electrical components used in industrial, commercial, communications and utility markets. We are also a leading producer of highly engineered steel structures, used primarily for utility transmission, and commercial heating units. We have operations in approximately 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, 2007. We believe our critical accounting policies include the following:

•  Revenue Recognition:  The Corporation recognizes 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. The Corporation also recognizes revenue for service agreements associated with its Power Solutions business over the applicable service periods. Sales discounts, quantity and price rebates, and allowances are estimated based on contractual commitments and experience and recorded in the period as a reduction of revenue 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 the Corporation’s 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. The Corporation provides additional allowances for bad debts when circumstances dictate. A number of distributors, primarily in the 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. Management analyzes historical returns and allowances, current economic trends and specific customer circumstances when evaluating the adequacy of accounts receivable related reserves and accruals.

•  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, the Corporation periodically evaluates the carrying value of its inventories. The Corporation also periodically performs 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 forecasts for particular product groupings, planned dispositions of product lines and overall industry trends.

•  Goodwill and Other Intangible Assets:  We follow the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 requires a transitional and annual test of goodwill and indefinite lived assets associated with reporting units for indications of

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impairment. The Corporation performs its annual impairment assessment in the fourth quarter of each year, unless circumstances dictate more frequent assessments. Indications of impairment require significant judgment by management. Under the provisions of SFAS No. 142, each test of goodwill requires that we determine the fair value of each reporting unit, and compare the fair value to the reporting unit’s carrying amount. 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. 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 the Corporation 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.

•  Long-Lived Assets:  We follow the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 establishes accounting standards for the impairment of long-lived assets such as property, plant and equipment and intangible assets subject to amortization. For purposes of recognizing and measuring impairment of long-lived assets, the Corporation evaluates assets at the lowest level of identifiable cash flows for associated product groups. The Corporation reviews long-lived assets to be held-and-used for impairment annually or 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. 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 sell.

•  Pension and Other Postretirement Benefit Plan Actuarial Assumptions:  We follow the provisions of SFAS No. 87, “Employers’ Accounting for Pensions,” SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other than Pensions,” SFAS No. 132 (Revised), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” and SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.” For purposes of calculating pension and postretirement medical benefit obligations and related costs, the Corporation uses 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

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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 provides a valuation allowance based on a more-likely-than-not criteria. The Corporation has 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 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 enacted tax law in effect as of June 30, 2008, 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 current available facts related to each site. The operation of manufacturing plants involves a high level of susceptibility in these areas, and there is no assurance that we will not incur material environmental or occupational health and safety liabilities in the future. Moreover, expectations of remediation expenses could be affected by, and potentially significant expenditures could be required to comply with, environmental regulations and health and safety laws that may be adopted or imposed in the future. Future remediation technology advances could adversely impact expectations of remediation expenses.

2008 Outlook

We performed well in the first half of 2008 despite mixed demand in our principal markets. Weakness in residential construction has impacted related markets such as light commercial construction and utility distribution. We believe that demand in residential and related construction markets will remain weak. Activity in heavy construction, large industrial and infrastructure projects has been and is expected to remain healthy for the balance of the year. International markets, which account for slightly more than a third of our net sales, have continued to perform well.

Year-over-year net sales increased 26.0% for the first half of 2008 compared to 2007 with acquisitions contributing significantly (22.5%) to this growth. Underlying net sales volume declined slightly year-over-year offset by increased commodity- and energy-related price increases and foreign exchange. In the second half of 2008, we expect foreign exchange to have less of an impact and price increases to play a more significant role in the year-over-year growth. Acquisitions will contribute less to year-over-year sales growth in the second half of 2008 than in the first half as a result of the timing of the 2007 transactions. For the full year 2008, we expect sales growth of approximately 20% compared to 2007.

We have increased our full year earnings guidance for diluted earnings per share from continuing operations in the range of $5.50 to $5.65 up from our previous guidance of $3.93 to $4.08. This increased guidance is primarily due to the gain from our sale of the minority interest in Leviton Manufacturing Company (“Leviton”), offset in part by a $14 million non-cash, out-of-period tax charge. The increased guidance also includes the benefit of lower net interest expense from the Leviton proceeds. Benefits from activities undertaken in the first half of the year to integrate

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acquisitions are expected to contribute favorably to our second half operational performance when compared to the first half of the year.

The key risk factors we may face in 2008 include the potential negative impact of market uncertainty, continued tightening in credit markets and volatility in commodity markets.

Summary of Consolidated Results

	Quarter Ended June 30,
	2008						2007
				% of Net						% of Net
	In Thousands			Sales			In Thousands			Sales
Net sales	$	641,317			100.0		$	507,238			100.0
Cost of sales		441,342			68.8			352,431			69.5
Gross profit		199,975			31.2			154,807			30.5
Selling, general and administrative		100,489			15.7			84,532			16.6
Earnings from operations		99,486			15.5			70,275			13.9
Interest expense, net		(11,768	)		(1.9	)		(3,446	)		(0.7	)
Other (expense) income, net		(670	)		(0.1	)		640			0.1
Gain on sale of equity interest		169,684			26.5			—			—
Earnings before income taxes		256,732			40.0			67,469			13.3
Income tax provision		108,692			16.9			20,916			4.1
Net earnings from continuing operations		148,040			23.1			46,553			9.2
Loss from discontinued operations, net		(200	)		—			—			—
Net earnings	$	147,840			23.1		$	46,553			9.2
Basis earnings per share:
Continuing operations	$	2.56					$	0.81
Discontinued operations		—						—
Net earnings	$	2.56					$	0.81
Diluted earnings per share:
Continuing operations	$	2.54					$	0.80
Discontinued operations		—						—
Net earnings	$	2.54					$	0.80

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	Six Months Ended June 30,
	2008						2007
				% of Net						% of Net
	In Thousands			Sales			In Thousands			Sales
Net sales	$	1,236,821			100.0		$	981,790			100.0
Cost of sales		850,585			68.8			682,118			69.5
Gross profit		386,236			31.2			299,672			30.5
Selling, general and administrative		216,774			17.5			171,861			17.5
Earnings from operations		169,462			13.7			127,811			13.0
Interest expense, net		(24,100	)		(1.9	)		(6,997	)		(0.7	)
Other (expense) income, net		(1,947	)		(0.2	)		480			0.1
Gain on sale of equity interest		169,684			13.7			—			—
Earnings before income taxes		313,099			25.3			121,294			12.4
Income tax provision		126,898			10.2			37,601			3.9
Net earnings from continuing operations		186,201			15.1			83,693			8.5
Loss from discontinued operations, net		(109	)		(0.1	)		—			—
Net earnings	$	186,092			15.0		$	83,693			8.5
Basis earnings per share:
Continuing operations	$	3.22					$	1.44
Discontinued operations		—						—
Net earnings	$	3.22					$	1.44
Diluted earnings per share:
Continuing operations	$	3.20					$	1.42
Discontinued operations		—						—
Net earnings	$	3.20					$	1.42

2008 Compared with 2007

Overview

Net sales in the second quarter and in the first six months of 2008 increased significantly from the respective prior-year periods. Acquisitions completed in the second half of 2007 and January 2008, higher prices to offset material and energy costs, and foreign currency contributed to the increase in net sales for both periods. Industrial and infrastructure demand and international markets remained strong and partially offset softness in markets influenced by residential construction such as retail, utility distribution and light commercial construction.

Earnings from operations in dollars and as a percent of sales increased from the respective prior-year periods. Acquisitions benefited earnings from operations significantly on a dollar basis while having a dampening effect on earnings from operations as a percent of sales. Earnings from operations in the second quarter and in the first six months of 2008 reflect a favorable legal settlement, while earnings of the prior-year six month period reflects a legal settlement charge.

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Interest expense, net increased during both periods in 2008 primarily as a result of funding required for the acquisitions.

We sold our minority interest in Leviton in the second quarter of 2008 for net proceeds of $280 million and recognized a pre-tax gain of $169.7 million ($1.74 per diluted share after tax).

Net earnings for the second quarter of 2008 were $2.54 per diluted share compared to $0.80 per diluted share in the prior-year period. Net earnings for the first six months of 2008 were $3.20 per diluted share compared to $1.42 per diluted share in the prior-year period. Both current-year periods include a gain of $1.74 per diluted share on the sale of our minority interest in Leviton, a $0.13 per diluted share benefit from a legal settlement and an out-of-period, non-cash tax charge of $0.24 per diluted share related to an adjustment of prior period deferred income taxes. For the first six months of 2007, net earnings reflect an $0.08 per diluted share charge from a legal settlement.

Net Sales and Gross Profit

Net sales in the second quarter of 2008 were $641.3 million, up $134.1 million, or 26.4% from the prior-year period. Acquisitions accounted for $114.1 million of the sales increase while favorable foreign currency exchange contributed approximately $18 million. For the first six months of 2008, net sales were $1,236.8 million, up $255.0 million, or 26.0%, from the prior-year period. Acquisitions accounted for $222.8 million of the sales increase in the first six months of 2008 while foreign currency benefited sales by approximately $40 million. Commodity- and energy-related price increases partially offset lower underlying sales volumes in markets affected by the slow down in residential construction such as retail, utility distribution and some areas of commercial construction.

Gross profit in the second quarter of 2008 was $200.0 million, or 31.2% of net sales, compared to $154.8 million, or 30.5% of net sales, in the prior-year period. Gross profit for the first six months of 2008 was $386.2 million, or 31.2% of net sales, compared to $299.7 million, or 30.5% of net sales in the prior-year period. This improvement over both prior-year periods reflects the impact of acquisitions as well as favorable mix in our underlying businesses.

Expenses

Selling, general and administrative (“SG&A”) expense in the second quarter of 2008 was $100.5 million, or 15.7% of net sales, compared to $84.5 million, or 16.6% of net sales in the prior-year period. The decrease as a percent of net sales for second quarter 2008 reflects a $12 million benefit from recently settled legacy legal claims. SG&A expense in the first six months of 2008 was $216.8 million, or 17.5% of net sales, compared to $171.9 million, or 17.5% of net sales, in the prior-year period. SG&A expense in 2008 also included acquisition-related depreciation and amortization expenses of approximately $7 million in the second quarter of 2008 and $14 million in the first six months of 2008. The first six months of 2007 included a $7 million charge for a legal settlement.

Interest Expense, Net

Interest expense, net was $11.8 million in the second quarter of 2008, up $8.4 million from the prior-year period primarily as a result of funding acquisitions. Interest income included in interest expense, net was $0.9 million for the second quarter of 2008 compared to $4.1 million for the prior-year period. Interest expense was $12.7 million in the second quarter of 2008 and $7.5 million in the prior-year period. For the first six months of 2008, interest income included in interest expense, net was $2.3 million compared to $7.7 million in the prior-year period. Interest expense was

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$26.4 million for the first six months of 2008 compared to $14.7 million in the prior-year period. For the first six months of 2008, the decrease in interest income and the increase in interest expense when compared to the prior-year period results from funding acquisitions.

Income Taxes

The effective tax rate for the second quarter of 2008 was 42.3% compared to 31.0% for the prior-year period. The effective rate for the first six months of 2008 was 40.5% compared to 31.0% for the prior-year period. The increase in the effective rate over the prior-year periods reflects the second quarter 2008 gain on sale of equity interest and an out-of-period, non-cash tax charge of $14.0 million related to deferred income taxes. The effective rate for both years also reflects benefits from our Puerto Rican manufacturing operations.

Net Earnings

Net earnings in the second quarter of 2008 were $147.8 million, or $2.54 per diluted share, compared to $46.6 million, or $0.80 per diluted share, in the prior-year period. Net earnings in the first six months of 2008 were $186.1 million, or $3.20 per diluted share, compared to $83.7 million, or $1.42 per diluted share, in the prior-year period. The results of discontinued operations in both periods of 2008 were negligible. Higher 2008 net earnings reflect the gain on sale of an equity interest and the benefit to earnings from operations provided by the acquisitions, which were partially offset by higher interest expense, net and higher income taxes. The second quarter of 2008 includes a gain on the sale of our minority interest in Leviton of $1.74 per diluted share, a benefit of $0.13 per diluted share related to settlement of legacy legal claims and an out-of-period, non-cash tax charge of $0.24 per diluted share related to an adjustment of prior period deferred income taxes. Net earnings for the first six months of 2007 included a pre-tax legal charge of $0.08 per diluted share.

Summary of Segment Results

Net Sales

	Quarter Ended June 30,								Six Months Ended June 30,
	2008				2007				2008				2007
	In		% of Net		In		% of Net		In		% of Net		In		% of Net
	Thousands		Sales		Thousands		Sales		Thousands		Sales		Thousands		Sales
Electrical	$	550,795		85.9	$	418,033		82.4	$	1,059,565		85.7	$	807,199		82.2
Steel Structures		56,431		8.8		57,082		11.3		108,391		8.7		110,112		11.2
HVAC		34,091		5.3		32,123		6.3		68,865		5.6		64,479		6.6
	$	641,317		100.0	$	507,238		100.0	$	1,236,821		100.0	$	981,790		100.0

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Segment Earnings

	Quarter Ended June 30,										Six Months Ended June 30,
	2008					2007					2008					2007
	In			% of Net		In			% of Net		In			% of Net		In			% of Net
	Thousands			Sales		Thousands			Sales		Thousands			Sales		Thousands			Sales
Electrical	$	110,826			20.1	$	84,892			20.3	$	206,947			19.5	$	161,736			20.0
Steel Structures		10,545			18.7		9,955			17.4		20,587			19.0		19,945			18.1
HVAC		6,160			18.1		5,123			15.9		11,795			17.1		10,812			16.8
Segment earnings		127,531			19.9		99,970			19.7		239,329			19.4		192,493			19.6
Corporate expense		(3,572	)				(13,852	)				(16,834	)				(31,294	)
Depreciation and amortization expense		(21,158	)				(12,772	)				(43,198	)				(25,116	)
Share-based compensation expense		(3,315	)				(3,071	)				(9,835	)				(8,272	)
Interest expense, net and other (expense) income, net		(12,438	)				(2,806	)				(26,047	)				(6,517	)
Gain on sale of equity interest		169,684					—					169,684					—
Earnings before income taxes	$	256,732				$	67,469				$	313,099				$	121,294

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 segment earnings are significantly influenced by the operating performance of our Electrical segment that accounted for more than 80% of our consolidated net sales and consolidated segment earnings during both of the periods presented.

Electrical Segment

Electrical segment net sales in the second quarter of 2008 were $550.8 million, up $132.8 million, or 31.8%, from the prior-year period. This increase reflects the impact of acquisitions ($114.1 million) and approximately $17 million from favorable foreign currency exchange driven primarily by strong European and Canadian currencies against a weaker U.S. dollar. Electrical segment net sales in the first six months of 2008 were $1,059.6 million, up $252.4 million, or 31.3%, from the prior-year period. This increase reflects the impact of acquisitions ($222.8 million) and approximately $38 million from favorable foreign currency exchange. Commodity- and energy-related price increases in part offset lower underlying sales volumes in markets affected by the slow down in residential and related construction.

Electrical segment earnings in the second quarter of 2008 were $110.8 million, up $25.9 million, or 30.6%, from the prior-year period. Electrical segment earnings in the first six months of 2008 were $206.9 million, up $45.2 million, or 28.0%, from the prior-year period. The improvement in segment earnings on a dollar basis reflects a significant contribution from acquisitions although acquisitions had a dampening effect on segment earnings as a percent of sales. Underlying earnings in the Electrical segment increased slightly year-over-year despite lower sales volumes.

Other Segments

Net sales in the second quarter of 2008 in our Steel Structures segment were $56.4 million, down $0.7 million, or 1.1%, from the prior-year period. Net sales in the first six months of 2008

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were $108.4, down $1.7 million, or 1.6%, from the prior-year period. 2008 reflects relatively flat sales of internally manufactured, highly engineered tubular steel poles and decreased shipments of lattice towers purchased from third party suppliers for resale. Steel Structures segment earnings in the second quarter of 2008 were $10.5 million, up $0.6 million compared to the prior-year period. Steel Structures segment earnings for the first six months of 2008 were $20.6 million, up $0.6 million, compared to the prior-year period. The improvement in segment earnings as a percent of sales reflects a more favorable project mix.

Net sales in the second quarter of 2008 in our HVAC segment were $34.1 million, up $2.0 million, or 6.1%, from the prior-year period. Net sales in the first six months of 2008 were $68.9 million, up $4.4 million, or 6.8%, compared to the prior-year period. Sales increased primarily due to favorable price increases and foreign currency exchange. HVAC segment earnings in the second quarter of 2008 were $6.2 million, up $1.0 million, or 20.2% when compared to the prior-year period. HVAC segment earnings in the first six months of 2008 were $11.8 million, up $1.0 million, or 9.1% compared to the prior-year period.

Liquidity and Capital Resources

We had cash and cash equivalents of $288.1 million and $149.9 million at June 30, 2008 and December 31, 2007, respectively. We also had total debt of $664.5 million and $811.2 million at June 30, 2008 and December 31, 2007, respectively.

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

	Six Months Ended
	June 30,
	2008			2007
(In thousands)
Net cash provided by (used in) operating activities	$	84,480		$	90,790
Net cash provided by (used in) investing activities		199,167			(17,332	)
Net cash provided by (used in) financing activities		(144,756	)		(109,315	)
Effect of exchange-rate changes on cash		(732	)		3,041
Net increase (decrease) in cash and cash equivalents	$	138,159		$	(32,816	)

Operating Activities

Cash provided by operating activities decreased in the first six months of 2008 to $84.5 million from $90.8 million in 2007 reflecting in part higher current year inventory levels and certain LMS change in control payments. Cash used for inventory in the first six months of 2008 was $37.1 million compared to $4.4 million in the prior-year period. The increase in inventory includes an increase in raw material pricing, seasonal inventory requirements and a temporary finished goods build for the second quarter consolidation of LMS warehouses. We plan to reduce inventory levels during the second half of the year, although these actions may be in part offset by higher material costs. During the first six months of 2008, net earnings were $186.1 million compared to net earnings in the prior-year period of $83.7 million. The year-over-year increase in net earnings reflects the significant gain on sale of equity interest. As of June 30, 2008, this gain had no net effect on cash provided by operating activities. During the second half of 2008, cash flows from operating activities will be negatively impacted by the payment of income taxes of approximately

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$80 million from this transaction. Depreciation and amortization increased during the first six months of 2008 to $43.2 million from $25.1 million in 2007 reflecting recent acquisition activity.

Investing Activities

During the second quarter of 2008, we sold our entire minority interest (29.1 percent) in Leviton back to Leviton for net proceeds of $280 million. Net proceeds reflect $300 million from Leviton which was offset by a $20 million contingent payment triggered by the sale of shares that was paid in July 2008.

In January 2008, we acquired The Homac Manufacturing Company (Homac), a privately held manufacturer of components used in utility distribution and substation markets, as well as industrial and telecommunications markets, for approximately $75 million. Also, in January 2008, we acquired Boreal Braidings Inc. (Boreal), a privately held manufacturer of high quality flexible connectors used by industrial OEM and utility customers in Canada for approximately $16 million.

During the first six months of 2008, we had capital expenditures for maintenance spending and the support of our ongoing business plans totaling $18.7 million compared to $17.6 million in 2007. We expect capital expenditures of approximately $50 million in 2008.

Financing Activities

Financing activities for the first six months of 2008 reflect repayment of $115 million senior unsecured debt securities due May 2008, net repayments on our revolving credit facility of $30 million and the repayment of $2.6 million of industrial revenue bonds assumed in a recent acquisition. Financing activities in the prior-year period reflected cash used for the repurchase of approximately 2.5 million common shares for approximately $133 million and cash provided by the exercise of stock options for approximately $19 million.

$750 million Credit Facility

Our revolving credit facility has total availability of $750 million, through a five-year term expiring in October 2012. All borrowings and other extensions of credit under our 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 revolving credit facility may be used for general operating needs and for other general corporate purposes in compliance with the terms of the facility. We used the facility to help finance the transaction with Lamson & Sessions Co. in November 2007 and also for the Homac acquisition in January 2008. Outstanding borrowings under this facility at June 30, 2008 were $390 million and at December 31, 2007 were $420 million.

In the fourth quarter of 2007, we entered into an interest rate swap to hedge our exposure to changes in the LIBOR rate on $390 million of borrowings under this facility. See Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Under the revolving credit facility agreement, we selected an interest rate on our initial draw of the revolver based on the one-month London Interbank Offered Rate (“LIBOR”) plus a margin based on our debt rating. Fees to access the facility and letters of credit under the facility are based on a pricing grid related to our debt ratings with Moody’s, S&P, and Fitch during the term of the facility.

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Our amended and restated revolving credit facility requires that we maintain:

•  a maximum leverage ratio of 4.00 to 1.00 through December 31, 2008, then a ratio of 3.75 to 1.00 thereafter; and

•  a minimum interest coverage ratio of 3.00 to 1.00.

It also contains customary covenants that could restrict our ability to: incur additional indebtedness; grant liens; make investments, loans, or guarantees; declare dividends; or repurchase company stock. We do not expect these covenants to restrict our liquidity, financial condition, or access to capital resources in the foreseeable future.

At June 30, 2008, outstanding letters of credit or similar financial instruments that reduce the amount available under the $750 million credit facility totaled $11.5 million. Letters of credit relate primarily to third-party insurance claims processing.

Other Credit Facilities

We have a EUR 10.0 million (approximately US$15.6 million) committed revolving credit facility with a European bank that has an indefinite maturity. Availability under this facility was EUR 9.9 million (approximately US$15.5 million) as of June 30, 2008. This credit facility contains standard covenants similar to those contained in the $750 million credit agreement and standard events of default such as covenant default and cross-default.

Outstanding letters of credit which reduced availability under the European facility amounted to EUR 0.1 million (approximately US$0.1 million) at June 30, 2008.

Other Letters of Credit

As of June 30, 2008, we also had letters of credit in addition to those discussed above that do not reduce availability under our credit facilities. We had $27.9 million of such additional letters of credit that relate primarily to third-party insurance claims processing, performance guarantees and acquisition obligations.

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 renewing or obtaining credit facilities in the future.

As of June 30, 2008, the aggregate availability of funds under our credit facilities was approximately $364.0 million, after deducting certain outstanding letters of credit. Availability is subject to the satisfaction of various covenants and conditions to borrowing.

Credit Ratings

As of June 30, 2008, we had investment grade credit ratings from Standard & Poor’s, Moody’s Investor Service and Fitch Ratings 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.

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Debt Securities

Thomas & Betts had the following senior unsecured debt securities outstanding as of June 30, 2008:

Issue Date	Amount		Interest Rate			Interest Payable	Maturity Date
February 1999	$	150 million		6.39	%	March 1 and September 1	February 2009
May 2003	$	125 million		7.25	%	June 1 and December 1	June 2013

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.

Other

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, capital expenditure plans, continued compliance with credit facilities and other factors that the Board of Directors may consider relevant.

In the short-term, we expect to fund expenditures for capital requirements as well as other liquidity needs from a combination of cash generated from operations and available cash resources. These sources should be sufficient to meet our operating needs in the short-term.

Over the longer-term, we expect to meet our liquidity needs with a combination of cash generated from operations, existing cash balances, the use of our credit facilities, plus issuances of debt or equity securities. From time to time, we may access the public capital markets if terms, rates and timing are acceptable. We have an effective shelf registration statement that will permit us to issue an aggregate of $325 million of senior unsecured debt securities, common stock and preferred stock.

The Lamson & Sessions Co. Restructuring and Integration Plan

Our senior management began assessing and formulating a restructuring and integration plan as of the acquisition date of LMS. Approval by our senior management and Board of Directors occurred during the first quarter of 2008. The objective of the restructuring and integration plan is to achieve operational efficiencies and eliminate duplicative operating costs resulting from the LMS acquisition. We also intend to achieve greater efficiency in sales, marketing, administration and other operational activities. We identified certain liabilities and other costs totaling approximately $26 million for restructuring and integration actions. Included in this amount are approximately $11 million of planned severance costs for involuntary termination of approximately 290 employees of LMS and approximately $8 million of lease cancellation costs associated with the planned closure of LMS distribution centers, which have been recorded as part of our preliminary purchase price allocation of LMS. Severance and lease cancellation costs have been reflected in our balance sheet in accrued liabilities and reflect cash paid or to be paid for these actions. Integration costs will be recognized as incurred. The amount recognized as integration expense during the second quarter of 2008 totalled less than $1 million, with the amount recognized during the first six months of 2008 totalling approximately $3 million. The actions required by the plan began soon after the plan was approved, including the communication to affected employees of our intent to terminate as soon as possible.

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As of June 30, 2008, we have ceased operations at all LMS distribution centers, consolidated these activities into our existing distribution centers and are in the process of negotiating lease terminations. Also as of June 30, 2008, we have involuntarily terminated approximately 240 employees of LMS. Payments associated with certain of the restructuring and integration actions taken are expected to extend beyond 2008 due to compliance with applicable regulations and other considerations. The cash payments necessary to fund the plan are expected to come from operations or available cash resources. Additionally, the final purchase price as of June 30, 2008 is still preliminary since the restructuring and integration plan does not yet reflect final costs associated with the divestiture of our PVC and HDPE pipe businesses as these divestitures have not been completed. Beginning in 2009, annual net savings from these actions are expected to approximate $18 million as a consequence of the reduction in total employment and the consolidation of distributions centers.

On July 31, 2008, we completed the sale of the PVC pipe portion of the held-for-sale operations that were acquired as part of the LMS acquisition. The purchase price was approximately $45 million. We are in discussions to sell the remaining HDPE business. We have also entered into a definitive agreement to sell certain real estate assets, subject to customary conditions including due diligence and approval by the purchaser’s board of directors.

Off-Balance Sheet Arrangements

As of June 30, 2008, 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 could be exposed to market risk from future changes in interest rates, raw material prices and foreign exchange rates. 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 June 30, 2008, the Corporation has not experienced any material changes in market risk since December 31, 2007 that affect the quantitative and qualitative disclosures presented in our 2007 Annual Report on Form 10-K.

Interest Rate Swap

During the fourth quarter of 2007, the Corporation entered into a forward-starting interest rate swap for a notional amount of $390 million. The notional amount reduces to $325 million on December 15, 2010, $200 million on December 15, 2011 and $0 on October 1, 2012. The interest rate swap hedges $390 million of the Corporation’s exposure to changes in interest rates on borrowings of its $750 million credit facility. The Corporation has designated the interest rate swap as a cash flow hedge for accounting purposes. Under the interest rate swap, the Corporation receives variable one-month LIBOR and pays an underlying fixed rate of 4.86%.

On January 1, 2008, the Corporation adopted Financial Accounting Standard (SFAS) No. 157, “Fair Value Measurements,” for measuring “financial” assets and liabilities. SFAS 157 defines fair value as the price received to transfer an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a framework for

33

measuring fair value by creating 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 has been reflected at its fair value liability of $13.2 million as of June 30, 2008. This swap is measured at fair value on a recurring basis 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 was the income approach. This approach represents the present value of future cash flows based upon current market expectations. The credit valuation adjustment (reduction in the liability) was determined to be $0.1 million as of June 30, 2008. The Corporation’s interest rate swap liability as of December 31, 2007 was $13.6 million. The decrease in the interest rate swap liability during the second quarter and first six months of 2008 compared to December 31, 2007 primarily reflects an increase in rates in the future portion of the swap curve as of June 30, 2008.

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, as of this date, these controls and procedures are effective to ensure that the information required to be disclosed under the Securities Exchange Act of 1934 is disclosed within the time periods specified by SEC rules.

(b)   Changes in Internal Control over Financial Reporting

The Corporation has experienced significant acquisition and integration activity in the past year, including the November 2007 acquisition of LMS for approximately $450 million. Other than the noted acquisitions, there have been no significant changes in internal control over financial reporting that occurred during the first six months of 2008 that have materially affected or are reasonably likely to materially affect the Corporation’s internal control over financial reporting.

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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 2007 Annual Report on Form 10-K, which is incorporated herein by reference.

Item 1A.  Risk Factors

There are many factors that could pose a material risk to the Corporation’s business, its operating results and financial condition and its ability to execute its business plan, some of which are beyond our control. There have been no material changes from the risk factors as previously set forth in our 2007 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 three months ended June 30, 2008:

Issuer Purchases of Equity Securities

					Total Number		Maximum
					of Common		Number
					Shares		of Common
	Total		Average		Purchased		Shares that
	Number of		Price Paid		as Part of		May Yet Be
	Common		per		Publicly		Purchased
	Shares		Common		Announced		Under
Period	Purchased		Share		Plans		the Plans
March 2007 Plan
Total for the quarter ended June 30, 2008		—	$	—		—		2,799,300

In March 2007, the Corporation’s Board of Directors approved a share repurchase plan that authorizes the Corporation to buy an additional 3,000,000 of its common shares. During 2007, the Corporation repurchased, through open-market transactions, 200,700 common shares with available cash resources, leaving 2,799,300 common shares that can be repurchased under this authorization as of June 30, 2008. The timing of future repurchases, if any, will depend upon a variety of factors, including market conditions. This authorization expires in March 2009.

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Item 4.   Submission of Matters to a Vote of Security Holders

The matters which were voted upon at our Annual Meeting of Shareholders held May 7, 2008, and the results of the voting are set forth below.

1.	Nominees for Director	For		Withheld
	Jeananne K. Hauswald		49,072,671		2,910,007
	Dean Jernigan		50,933,818		1,048,860
	Ronald B. Kalich, Sr.		49,334,095		2,648,583
	Kenneth R. Masterson		49,075,491		2,907,187
	Dominic J. Pileggi.		50,478,449		1,504,229
	Jean-Paul Richard		50,837,409		1,145,269
	Kevin L. Roberg		50,928,879		1,053,799
	David D. Stevens		50,936,832		1,045,846
	William H. Waltrip		50,694,904		1,287,774

Subsequent to our Annual Meeting of Shareholders held May 7, 2008, the Corporation’s Board of Directors appointed Rufus H. Rivers to the Board of Directors until its next annual meeting of shareholders. A current report on Form 8-K describing Mr. Rivers appointment was filed on June 4, 2008.

2. For the proposal to ratify the appointment of KPMG LLP as the independent registered public accounting firm, received:

For	51,529,785
Against	363,463
Abstentions	89,430
Broker non-votes	0

3.  For the proposal to approve the Thomas & Betts Corporation Management Incentive Plan as amended and adopted by the Board of Directors:

For	50,566,948
Against	883,571
Abstentions	532,159
Broker non-votes	0

4.  For the proposal to approve the Thomas & Betts Corporation 2008 Stock Incentive Plan as adopted by the Board of Directors:

For	36,692,718
Against	10,071,917
Abstentions	648,503
Broker non-votes	4,569,541

Item 6.   Exhibits

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

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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/  Kenneth W. Fluke

Kenneth W. Fluke

Senior Vice President and

Chief Financial Officer

(principal financial officer)

Date: August 7, 2008

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EXHIBIT INDEX

Exhibit No.			Description of Exhibit
	10	.1	Thomas & Betts Corporation Management Incentive Plan (Filed as an Exhibit to Registrant’s Current Report on Form 8-K dated May 7, 2008 and incorporated herein by reference).
	10	.2	Thomas & Betts Corporation 2008 Stock Incentive Plan (Filed as an Exhibit to Registrant’s Current Form 8-K dated May 7, 2008 and incorporated herein by reference).
	10	.3	Minority Stock Purchase Agreement by and between Leviton Manufacturing Co., Inc. and Thomas & Betts Corporation dated as of June 24, 2008 (Filed as Exhibit to Registrant’s Current Report on Form 8-K dated June 24, 2008 and incorporated herein by reference).
	12		Statement re Computation of Ratio of Earnings to Fixed Charges
	23	.1	Consent of Independent Registered Public Accounting Firm (Filed as an Exhibit to Registrant’s Form S-8 dated May 7, 2008 and incorporated herein by reference).
	23	.2	Consent of W. David Smith, Jr. (Filed as an Exhibit to Registrant’s Form S-8 dated May 7, 2008 and incorporated herein by reference).
	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.

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