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FORM 10-K

Commission file number 1-4682

Thomas & Betts Corporation

(901) 252-8000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

     Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x  No o

     As of June 29, 2003, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates (based on the average bid and asked prices of such common equity on the New York Stock Exchange as of such date) was $820,114,151.

     As of March 12, 2004, 58,645,250 shares of the Registrant’s common stock were outstanding.

Documents Incorporated by Reference

     Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held May 5, 2004, are incorporated by reference into Part III hereof.

Thomas & Betts Corporation and Subsidiaries

TABLE OF CONTENTS

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CAUTION REGARDING FORWARD-LOOKING STATEMENTS

      This Report includes various forward-looking statements regarding the Corporation which are subject to uncertainties in the Corporation’s operations, business, economic and political environment. Statements that contain words such as “achieve,” “guidance,” “believes,” “expects,” “anticipates,” “intends,” “estimates,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will” or similar expressions are forward-looking statements. Such statements are subject to risks and uncertainties, and many factors could affect the future financial results of the Corporation. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Business Risks.” Accordingly, actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking statements contained in this Report. For those statements, the Corporation claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

      There are many factors that could cause actual results to differ materially from those in forward-looking statements, some of which are beyond the control of the Corporation. These factors include, but are not limited to:

	•	Economic weakness or recession in the U.S. or the Corporation’s other main markets, including Canada and Europe;
	•	Significant changes in governmental policies which could create trade restrictions, patent enforcement issues, adverse tax-rate changes and changes to tax treatment of items such as tax credits, withholding taxes, transfer pricing and other income and expense recognition for tax purposes, including changes in taxation of income generated in Puerto Rico;
	•	Changes in environmental regulations and future remediation technology advances that could impact expectations of remediation expenses;
	•	Availability and pricing of commodities and raw materials, especially steel, needed for the production of the Corporation’s products;
	•	Changes in customer demand for various products of Thomas & Betts that could affect its overall product mix, pricing, margins, plant utilization levels and asset valuations;
	•	Simultaneous changes in creditworthiness of several major customers;
	•	Unexpected liabilities resulting from legal matters, pending or future tax examinations and risks associated with the coverage of insurance;
	•	Realization of deferred tax assets, which is dependent upon generating sufficient taxable income prior to their expiration and the Corporation’s tax planning strategies;
	•	Recoverability of goodwill and other long-lived assets, which could be impacted if estimated future operating cash flows are not achieved; and
	•	Impact of interest rate changes and market volatility on earnings, cash flows, investments, derivatives and borrowings of the Corporation and on investments held in the Corporation’s retirement plans.

      The Corporation undertakes no obligation to revise the forward-looking statements included in this Report to reflect any future events or circumstances.

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PART I

      Thomas & Betts Corporation is a leading designer and manufacturer of connectors and components for electrical and communication markets. The Corporation is also a leading producer of steel structures, used primarily for utility power lines, and industrial heating units. It operates approximately 130 manufacturing, distribution and office facilities around the world in approximately 20 countries. Manufacturing, marketing and sales activities are concentrated primarily in North America and Europe.

      The Corporation sells its products 1) through electrical, telephone, cable, heating, ventilation and air-conditioning distributors; 2) directly to original equipment manufacturers and certain end users; and 3) through mass merchandisers, catalog merchandisers and home improvement centers. Thomas & Betts pursues growth through market penetration, new product development, and, at times, acquisitions. See Note 4 in the Notes to Consolidated Financial Statements for information on acquisitions and divestitures during 2003, 2002 and 2001.

      Thomas & Betts was first established in 1898 as a sales agency for electrical wires and raceways, and was incorporated and began manufacturing products in New Jersey in 1917. The Corporation was reincorporated in Tennessee in May 1996. Corporate offices are maintained at 8155 T&B Boulevard, Memphis, Tennessee 38125, and the telephone number at that address is 901-252-8000.

Available information

      The Corporation’s Internet address is www.TNB.com. The Corporation will make available free of charge on or through its Internet website, its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the Securities and Exchange Commission (“SEC”). The Corporation will voluntarily provide electronic or paper copies of its filings free of charge upon request.

General Segment Information

      The Corporation classifies its products into the following business segments based on a combination of product lines and channels to market through which it sells those products: Electrical, Steel Structures, Communications and HVAC. The majority of the Corporation’s products, especially those sold in the Electrical segment, have region-specific standards and are sold mostly in North America or in other regions sharing North American electrical codes. No customer accounted for 10% or more of the Corporation’s consolidated net sales for 2003, 2002, or 2001. For additional segment financial information, including net sales and segment earnings (loss) from continuing operations for the three years ended December 31, 2003 and total assets as of December 31, 2003 and December 29, 2002 refer to Note 15 in the Notes to Consolidated Financial Statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Segment Results.”

Electrical Segment

      The Electrical segment’s markets include industrial, commercial, utility and residential construction, renovation, maintenance and repair; project construction; and industrial original

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      The Electrical segment designs, manufactures and markets thousands of various electrical connectors, components and other products for electrical applications. The Corporation has a market-leading position for many of its products. Products in the Electrical segment include: fittings and accessories for electrical raceways; fastening products, such as plastic and metallic ties for bundling wire, and flexible tubing; connectors, such as compression and mechanical connectors for high-current power and grounding applications; indoor and outdoor switch and outlet boxes, covers and accessories; floor boxes; metal framing used as structural supports for conduits, cable tray and electrical enclosures; hazardous location lighting; safety switches; underground connectors and switchgear; and other products, including insulation products, wire markers, and application tooling products. These products are sold under a variety of well-known brand names, such as Color Keyed®, Elastimold®, Kindorf®, Red Dot®, Sta-Kon®, Steel City®, Superstrut®, and Ty-Rap®.

      Demand for electrical products follows general economic conditions and is sensitive to activity in construction markets, industrial production levels and spending by utilities for replacements, expansions and efficiency improvements. The segment’s product lines are predominantly sold through major distributor chains and thousands of independent distributors and, to a lesser extent, to retail home centers and hardware outlets, and directly to original equipment manufacturers and utilities. Thomas & Betts has strong relationships with its distributors as a result of the breadth and quality of its product lines; its market-leading service programs; its strong history of product innovation; and the high degree of brand-name recognition for its products among end users.

Steel Structures Segment

      The Steel Structures segment designs, manufactures and markets tubular steel transmission and distribution poles and lattice steel transmission towers for North American power and telecommunications companies. These products are primarily sold to five types of end users: investor-owned utilities; cooperatives, which purchase power from utilities and manage its distribution to end users; municipal utilities; cable television operating companies; and telephone companies. They are marketed under the Lehigh^TM, Meyer® and Thomas & Betts® brand names. Net sales of the Steel Structures segment were $93.5 million, $129.7 million and $140.6 million, or 7.1%, 9.6% and 9.4% of the Corporation’s consolidated net sales for 2003, 2002 and 2001, respectively.

Communications Segment

      The Communications segment designs, manufactures and markets components, subsystems and accessories used to construct, maintain and repair cable television (CATV) and telecommunications networks. The Corporation’s communications products include: CATV drop hardware; radio frequency RF connectors; aerial, pole, pedestal and buried splice enclosures; connectors; encapsulation and sheath repair systems; and cable ties. These products are sold directly to CATV system operators and also through telecommunications and CATV distributors. The products are sold under a variety of brand names, most notably LRC®, Diamond®, Kold-N-Klose® and Snap-N-Seal®. Although the majority of the segment’s net sales are in North

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HVAC Segment

      The HVAC segment designs, manufactures and markets heating and ventilation products for commercial and industrial buildings. Products in this segment include: gas, oil and electric unit heaters; gas-fired duct furnaces; indirect and direct gas-fired make-up air heaters; infrared heaters; and evaporative cooling and heat recovery products. These products are sold primarily under the Reznor® brand name through HVAC, mechanical and refrigeration distributors throughout North America and Europe. Demand for HVAC products tends to be higher when customers are experiencing cold weather. To reduce the impact of this seasonality, the segment has offered a summer promotional program with its distributors. Net sales of the HVAC segment were $113.9 million, $102.5 million and $98.5 million, or 8.6%, 7.6% and 6.6% of the Corporation’s consolidated net sales for 2003, 2002 and 2001, respectively.

Manufacturing and Distribution

      Thomas & Betts employs advanced processes in order to manufacture quality products. The Corporation’s manufacturing processes include high-speed stamping, precision molding, machining, plating and automated assembly. The Corporation makes extensive use of computer-aided design and computer-aided manufacturing (CAD/CAM) software and equipment to link product engineering with its manufacturing facilities.

      The Corporation also utilizes other advanced equipment and techniques in the manufacturing and distribution process, including computer software for scheduling, material requirements planning, shop floor control, capacity planning, and the warehousing and shipment of products.

      Thomas & Betts’ products have historically enjoyed a reputation for quality in the markets in which they are sold. To ensure quality, all of its facilities embrace quality programs, and as of December 31, 2003, approximately 48% meet the ISO 9001 2000 standard. Management expects the majority of its plants will be ISO 9001 2000 certified by the end of 2004. Additionally, the Corporation has implemented quality control processes in its design, manufacturing, delivery and other operations in order to further improve product quality and the service level to customers.

Raw Materials

      Thomas & Betts purchases a wide variety of raw materials for the manufacture of its products including steel, aluminum, zinc, copper, resins and rubber compounds. The Corporation’s sources of raw materials and component parts are well established and are sufficiently numerous to avoid serious future interruptions of production in the event that certain suppliers are unable to provide raw materials and component parts. However, the Corporation has experienced a reduction in the number of steel suppliers during 2003. Given the current tight supply of steel, the Corporation could encounter manufacturing disruptions for each of its segments from sporadic interruptions by its steel suppliers. In addition, the Corporation could encounter price increases, especially for steel, which it may not be able to pass on to its customers.

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Research and Development

      Thomas & Betts has research, development and engineering capabilities in each business segment and maintains regional facilities to respond to the specific needs of regional markets. The Corporation has a reputation for innovation and value based upon its ability to develop products that meet the needs of the marketplace.

      Research, development and engineering expenditures invested into new and improved products and processes were $19.6 million, $18.8 million and $20.7 million, or 1.5%, 1.4% and 1.4% of net sales for 2003, 2002 and 2001, respectively. These expenses are included in cost of sales in the Consolidated Statements of Operations.

Working Capital Practices

      The Corporation maintains sufficient inventory to enable it to provide a high level of service to its customers. Its inventory levels, payment terms and return policies are in accordance with general practices associated with the industries in which it operates and standard business procedures.

Patents and Trademarks

      Thomas & Betts owns approximately 1,300 active patent registrations and applications worldwide. The Corporation has over 1,400 active trademarks and domain names worldwide, including: Thomas & Betts, T&B, T&B Access, Blackburn, Bowers, Canstrut, Catamount, Center Lok, Color-Keyed, Commander, Deltec, Diamond, DuraGard, E.K. Campbell, Eklips, Elastimold, Electroline, Emergi-Lite, Epitome, Ever-Lok, E-Z-Code, Flex-Cuf, Furse, Hazlux, Kindorf, Klik-It, Kold-N-Klose, Locktite, LRC, Marr, Marrette, Max-Gard, Meyer, Ocal, Red Dot, Reznor, RussellStoll, Sachs, Shamrock, Shield-Kon, Shrink-Kon, Signature Service, Site Light, Snap-N-Seal, Sta-Kon, Star Teck, Steel City, Superstrut, Sure Shot, Taylor, Termaster, The Grip of Steel, Ty-Fast, Ty-Rap, Union and Zinsco.

      While the Corporation considers its patents and trademarks (including trade dress) to be valuable assets, it does not believe that its competitive position is dependent solely on patent or trademark protection or that any business segment or its operations as a whole is dependent on any individual patent or trademark. However, the Color Keyed, Elastimold, Kindorf, Red Dot, Sta-Kon, Steel City, Super-Strut, and Ty-Rap trademarks are important to the Electrical segment; the Meyer trademark is important to the Steel Structures segment; the Kold-N-Klose, LRC, Snap-N-Seal, and Diamond trademarks are important to the Communications segment; and the Reznor trademark is important to the HVAC segment. In addition, the Corporation does not consider any of its individual licenses, franchises or concessions held to be material to its business as a whole or to any business segment.

Competition

      Thomas & Betts’ continuing ability to meet customer needs by enhancing existing products and developing and manufacturing new products is critical to its prominence in its primary market, the electrical products industry. Thomas & Betts encounters competition in all areas of its business, and the methods and levels of competition (e.g., price, service, warranty and product performance) vary among its markets. While no single company competes with the Corporation in all of its product lines, various companies compete with it in one or more product lines. Some of these competitors have substantially greater sales and assets and greater access to capital than

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      As Thomas & Betts works to enhance its product offerings, its competitors will most likely continue to improve their products and will likely develop new offerings with competitive price and performance characteristics. Although Thomas & Betts believes that it has specific technological and other advantages over certain of its competitors, because of the intensity of the competition in the product areas and geographic markets that it serves, Thomas & Betts could experience increased downward pressure on the selling prices for certain of its products.

      The activities of the Corporation’s competitors designed to enhance their own product offerings, coupled with any unforeseeable changes in customer demand for various products of Thomas & Betts, could affect the Corporation’s overall product mix, pricing, margins, plant utilization levels and asset valuations. Management believes that industry consolidation could further increase competitive pressures.

Employees

      As of December 31, 2003, the Corporation and its subsidiaries had approximately 9,000 full-time employees worldwide. Employees of the Corporation’s foreign subsidiaries in the aggregate comprise 50% of all employees. Of the total number of employees, 35% are represented by trade unions. The Corporation believes its relationships with its employees and trade unions are good.

Compliance with Environmental Regulations

      The Corporation is subject to federal, state, local and foreign environmental laws and regulations which govern the discharge of pollutants into the air, soil and water, as well as the handling and disposal of solid and hazardous wastes. Thomas & Betts believes that it is in compliance, in all material respects, with applicable environmental laws and regulations and that the costs of maintaining such compliance with applicable environmental laws and regulations will not be material to the Corporation’s financial position or results of operations. See “Item 3 — Legal Proceedings” and Note 17 in the Notes to Consolidated Financial Statements.

Financial Information About Foreign and U.S. Operations

      Export sales originating in the U.S. were approximately $33 million, $44 million and $46 million for 2003, 2002 and 2001, respectively. See Note 16 in the Notes to Consolidated Financial Statements for information concerning financial results for foreign and U.S. operations.

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      As of December 31, 2003, the Corporation had approximately 130 plant, office, distribution, storage and warehouse facilities, occupying approximately 7,258,000 sq. ft. in 22 U.S. states, the Commonwealth of Puerto Rico and in approximately 20 other countries. This space is composed of approximately 4,672,000 sq. ft. of manufacturing space; 1,934,000 sq. ft. of office, distribution, storage and warehouse space; and 652,000 sq. ft. of idle space.

      The Corporation’s manufacturing locations by segment as of December 31, 2003 are as follows:

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      In addition to the above mentioned manufacturing facilities, the Corporation owns three central distribution centers which are located in Belgium (141,792 sq. ft.), Canada (260,000 sq. ft.) and Byhalia, Mississippi (960,000 sq. ft.). The Corporation also has principal sales offices, warehouses and storage facilities located in approximately 572,374 sq. ft. of space, most of which is leased. Included in this total is approximately 214,000 sq. ft. of leased space in Memphis, Tennessee, for the Corporation’s corporate headquarters.

      The Corporation has approximately 652,000 sq. ft. of idle manufacturing, distribution and office space in California, Massachusetts, Nevada and New Jersey, which is owned or leased by the Corporation. Approximately 298,000 sq. ft. of this space is subleased. Such space is not included in the above table.

      Management believes the Corporation’s properties are suitable and adequate for the Corporation’s current needs. In general, the Corporation’s plants are operating at the lower range of practical capacity utilization.

Kaiser Litigation

      By July 5, 2002, Kaiser Aluminum, its property insurers, 28 Kaiser injured workers, nearby businesses and 18,000 residents near the Kaiser facility in Louisiana certified as a class, filed product liability and business interruption cases against the Corporation and six 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 seven-week 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’ judgment notwithstanding the verdict motions. On December 17, 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 T&B. The judge set the damages for the injured workers at $20 million and the damages for Kaiser at $335 million. The Corporation’s 25% allocation is $88.8 million, plus legal interest. The Corporation has appealed this ruling. Management believes there are meritorious defenses to the claim and intends to contest the litigation vigorously.

      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. Nonetheless, the Corporation’s liability insurers have secured the $156 million bond.

      The Corporation has not reflected a liability in its financial statements for the Kaiser litigation because management believes meritorious defenses exist for this claim and thus management does not believe a loss is probable. Further, until there are new developments in the case that would provide more concrete amounts, management cannot provide any better range of possible losses than zero to the amount of the judgment. When evaluating the impact of the judgment on the Corporation’s liquidity, investors should note that the Corporation has insurance coverage in excess of the judgment.

Asbestos Cases

      The Corporation and two subsidiaries, Amerace Corporation and L.E. Mason (Red Dot), acquired respectively in 1995 and 1999, are subject to asbestos lawsuits in Mississippi, New

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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. Management 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.

Environmental Matters

      Owners and operators of sites containing hazardous substances, as well as generators of hazardous substances, are subject to broad and retroactive liability for investigatory and cleanup costs and damages arising out of past disposal activities. Such liability in many cases may be imposed regardless of fault or the legality of the original disposal activity. The Corporation has received notifications from the United States Environmental Protection Agency (“EPA”) or similar state environmental regulatory agencies or private parties that the Corporation, in many instances along with others, may currently be potentially responsible for the remediation of sites pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (the “Superfund Act”), similar federal and state environmental statutes, or common law theories. The Corporation, along with others, may be held jointly and severally liable for all costs relating to investigation and remediation of 11 sites pursuant to the Superfund Act or similar state environmental enactments.

      The Corporation is the owner or operator, or former owner, of various manufacturing locations currently being evaluated by the Corporation for the presence of contamination that may require remediation. These sites include former or inactive facilities or properties in Alabama (Mobile); Connecticut (Monroe); Indiana (Medora); Massachusetts (Attleboro, Boston, Canton); New Hampshire (New Milford); New Jersey (Butler, Elizabeth, Garwood); New York (Horseheads); Pennsylvania (Perkasie, Pittsburgh); Ohio (Bucyrus) and Oklahoma (Stillwater). The sites further include active manufacturing locations in New Jersey (Hackettstown); New Mexico (Albuquerque); South Carolina (Lancaster); and Wisconsin (Hager City).

      Four of these current and former manufacturing locations relate to activities of American Electric for the period prior to the acquisition of American Electric by the Corporation. These

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      In December 1996, the Corporation acquired Augat Inc. Pursuant to the various environmental laws and regulations described above, Augat has evaluated or remediated, and may have liability associated with contamination at a number of sites. Pursuant to a Purchase Agreement, dated July 2, 2000, between the Corporation and Tyco Group S.A.R.L., the Corporation agreed to retain certain environmental liabilities, if any, for former Augat manufacturing locations in Alabama (Montgomery Plants 1 & 3); Massachusetts (Mashpee) and South Carolina (Inman); and for three offsite alleged disposal locations.

      In November 1998, the Corporation acquired Kaufel Group, Ltd. Pursuant to the various environmental laws and regulations described above, the Corporation is evaluating, and may have liability associated with contamination at two facilities owned and operated by Kaufel in Dorval, Quebec.

      The Corporation has provided for liabilities to the extent probable and estimable, but the Corporation is not able to predict the extent of its ultimate liability with respect to all of its pending or future environmental matters. However, the Corporation believes that any additional liability with respect to the aforementioned environmental matters will not be material to its financial position or results of operations.

      There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year ended December 31, 2003.

Executive Officers of the Registrant

      Information regarding executive officers of the Corporation is as follows (included herein pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General Instruction G(3) of Form 10-K):

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      Mr. Pileggi held various positions with the Corporation (1979 to 1983) before being elected Vice President — General Manager of the Electronics division (1983 to 1986), Vice President, Electronics Marketing Division (1986 to 1988), President — Electronics division (1988 to 1994), President — Electrical Components Division (1994 to 1995), Senior Vice President and Group President — Electrical (2000 to 2003) and President and Chief Operating Officer (2003 to 2004) of the Corporation. Mr. Pileggi was Executive Vice President (1998 to 2000) and President — EMS Division (2000) of Viasystems Group, Inc.

      Mr. Murphy was Senior Vice President and Chief Financial Officer of Johns Manville Corporation (1997 to 2000).

      Mr. Fluke held various finance and managerial positions with The Goodyear Tire and Rubber Company beginning in 1982, including General Manager, Finance — South Pacific Tyres and Controller North American Tires Division.

      Ms. Muscarella was Vice President — Human Resources of the Corporation (1998 to 2000).

      Mr. Raines was a partner of the law firm of Glankler Brown PLLC for more than five years prior to joining the Corporation in 2001.

      Executive officers are elected by, and serve at the discretion of, the Board of Directors for a term of one year. The current terms expire May 5, 2004.

      The Board of Directors has elected Mr. Fluke, as Senior Vice President and Chief Financial Officer of the Corporation, effective May 1, 2004 following the retirement of Mr. Murphy on April 30, 2004. The Board has also approved Mr. Fluke’s compensation arrangement in his new position.

      There are no other arrangements or understandings between any officer and any person, other than a director or executive officer of the Corporation acting in his or her official capacity, pursuant to which any officer was selected.

      There is no family relationship between any executive officer and any other officer or director of the Corporation.

      There has been no event involving any executive officer of the Corporation under any bankruptcy act, criminal proceeding, judgment or injunction during the past five years.

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PART II

Market Information

      The Corporation’s common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol TNB. The following table sets forth by quarter for the last two years the high and low sales prices of the Corporation’s common stock as reported by the NYSE, and the dividends declared by the Board of Directors of the Corporation on its common stock.

      At March 12, 2004, the closing price of the Corporation’s common stock on the NYSE was $21.19.

Holders

      At March 12, 2004, the Corporation had approximately 3,300 shareholders of record.

Dividends

      On July 24, 2001, the Corporation’s Board of Directors approved a change in the Corporation’s dividend payment practices and elected to retain its future earnings to fund the development and growth of its business. The Corporation does not presently anticipate declaring any cash dividends on the Corporation’s common stock in the foreseeable future. Future decisions concerning the payment of cash dividends on the Corporation’s common stock will depend upon its results of operations, financial condition, capital expenditure plans and other factors that the Board of Directors may consider relevant.

      The Corporation’s revolving credit agreements contain provisions that could restrict, as a practical matter, the Corporation’s ability to pay dividends during the term of those agreements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Financing Activities.”

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Securities Authorized for Issuance under Equity Compensation Plans

      As of December 31, 2003, the Corporation had the following compensation plans (including individual compensation arrangements) under which equity securities of the Corporation are authorized for issuance. After May 5, 2004, the date of the Corporation’s 2004 Annual Meeting of Shareholders, no equity securities of the Corporation will be issued under any of the following plans and such plans will be terminated.

(†)	This plan contains a formula for calculating the number of securities available for issuance under the plan. Under the formula, the number of securities available for issuance automatically increases each year by 1.25% of the number of outstanding securities of the Corporation. Under the transition rules of the NYSE, effective November 4, 2003, no new equity securities may be issued under this formula without shareholder approval.
(††)	Under the plan, the Corporation has the choice of issuing in any combination up to 1,481,187 of options or up to 740,594 of restricted stock.
(†††)	The number of securities available for issue is dependent on the stock price at the time of grant. See below for a description of this plan.

Deferred Fee Plan for Non-employee Directors

      The Deferred Fee Plan for Nonemployee Directors provides for a nonemployee director to defer all or a portion of compensation earned for services as a director. Any amount deferred is valued, in accordance with the director’s election, in a hypothetical investment in Common Stock (“Stock Credits”) or in one or more of seven mutual funds in the Vanguard Group. Stock Credits fluctuate in value as the value of the Common Stock fluctuates. In addition, each nonemployee director receives an annual grant of Stock Credits having a value of $7,500 as of the last day of the Board year. Additional Stock Credits are credited as dividend equivalents on

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Non-employee Directors Stock Option Plan

      The Nonemployee Directors Stock Option Plan provides that each nonemployee director, upon election, receives a nonqualified stock option grant for shares of Common Stock in an amount determined by the Board of Directors. In 2003, each nonemployee director received a nonqualified stock option grant for 5,000 shares. A nonemployee director who is elected to fill a vacancy or a newly created directorship in the interim between annual meetings receives an option grant of shares of Common Stock effective as of the date of election. The option exercise price is the fair market value (average of the high and low sales prices of Common Stock as reported on the NYSE) of a share of Common Stock on the date the option is granted. Each option grant is fully vested and exercisable on the date it is granted and has a term of ten years, subject to earlier expiration in the event the director’s membership on the Board terminates due to retirement, disability, death or for any other reason.

2001 Stock Incentive Plan

      The 2001 Stock Incentive Plan provides that key employees receive nonqualified stock option grants for shares of Common Stock in an amount determined by the Board of Directors. The option exercise price is the fair market value (average of the high and low sales prices of Common Stock as reported on the NYSE) of a share of Common Stock on the date the option is granted. Each option grant usually vests in increments of one-third over a three year period, subject to earlier expiration in the event termination due to retirement, disability, death or for any other reason.

      At the Corporation’s 2004 Annual Shareholders Meeting, management will seek approval of the following new equity compensation plans, which were approved by the Board of Directors in February 2004:

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Non-employee Directors Equity Compensation Plan

      The Nonemployee Directors Equity Compensation Plan provides that each nonemployee director, upon election, receives an award of restricted stock, unrestricted Common Stock, Stock Credits, nonqualified stock options, or combination thereof, in an amount determined by the Board of Directors. A nonemployee director who is elected to fill a vacancy or a newly created directorship in the interim between annual meetings receives a similar award effective as of the date of election. The option exercise price is the fair market value (average of the high and low sales prices of Common Stock as reported on the NYSE) of a share of Common Stock on the date the option is granted. Each option grant is fully vested and exercisable on the date it is granted and has a term of ten years, subject to earlier expiration in the event the director’s membership on the Board terminates due to retirement, disability, death or for any other reason.

      The Nonemployee Directors Equity Compensation Plan also allows for a nonemployee director to defer all or a portion of compensation earned for services as a director. Any amount deferred is valued, in accordance with the director’s election, in Stock Credits. Stock Credits fluctuate in value as the value of the Common Stock fluctuates. In addition, each nonemployee director may receive an annual grant of Stock Credits having a value determined by the Board. Additional Stock Credits are credited as dividend equivalents on the payment date and at the same value as dividends, if any, declared on the Common Stock. Stock Credits are distributed in shares of Common Stock or in cash upon a director’s termination of service.

Equity Compensation Plan

      The Equity Compensation Plan provides that key employees of the Corporation receive restricted stock awards and option grants for shares of Common Stock in an amount determined by the Board of Directors. The option exercise price is the fair market value (average of the high and low sales prices of Common Stock as reported on the NYSE) of a share of Common Stock on the date the option is granted. Each option grant generally vests in increments over a certain period, subject to earlier expiration in the event of termination due to retirement, disability, death or for any other reason.

      For financial information regarding stock option and incentive plans refer to Note 11 in the Notes to Consolidated Financial Statements.

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Thomas & Betts Corporation and Subsidiaries

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Executive Overview

Introduction

      Thomas & Betts Corporation is a leading designer and manufacturer of connectors and components for electrical and communication markets. The Corporation is also a leading producer of steel structures, used primarily for utility power lines, and industrial heating units. It operates approximately 130 manufacturing, distribution and office facilities around the world in approximately 20 countries. Manufacturing, marketing and sales activities are concentrated primarily in North America and Europe.

      The Corporation sells its products (1) through electrical, telephone, cable, heating, ventilation and air-conditioning distributors; (2) directly to original equipment manufacturers and certain end users; and (3) through mass merchandisers, catalog merchandisers and home improvement centers. Thomas & Betts pursues growth through market penetration, new product development, and, at times, acquisitions.

2004 Outlook

      Management expects only a modest recovery in its core markets in 2004 and believes any increase in demand will be gradual and weighted toward the second half of the year. Consequently, the Corporation’s financial targets for 2004 assume top-line growth in the low to mid-single digit range.

      Despite continuing to operate in challenging markets, management expects substantial percentage increases in operating income and net earnings for the first quarter and full year 2004 when compared to 2003.

      The Corporation has recently experienced a significant increase in the price it pays for steel and has also noted signs of a tightening of supply of steel. The Corporation intends to pass on essentially all of the increase in steel costs to its customers and has not experienced any significant disruptions in manufacturing as a result of the tight supply. However, the Corporation may not be successful in recovering all of the increase in steel costs or in avoiding certain manufacturing disruptions from sporadic interruptions by its steel suppliers.

Business Risks

      There are many factors that could pose a risk to the Corporation’s business and its ability to execute its business plan, some of which are beyond its control. These factors include, but are not limited to:

	Although the Corporation is not dependent on any one customer for more than 10% of its sales, deterioration in the credit quality of several major customers at the same time could have a material adverse effect on its results of operations and financial condition.

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The success of Thomas & Betts’ business is directly linked to positive economic conditions in the countries where it sells its products. Material adverse changes in economic or industry conditions generally or in the specific markets served by Thomas & Betts could adversely affect the future results of the Corporation. Additionally, continued economic slowdown in the U.S. or in Thomas & Betts’ major foreign markets, including Canada and Europe, could reduce the Corporation’s overall net sales. Thomas & Betts does business in geographically diverse markets. In fiscal year 2003, approximately 32% of Thomas & Betts’ net sales were generated outside of the United States. Because these influences are not always foreseeable, there can be no assurance that the business will not be affected by these occurrences.

	As Thomas & Betts works to enhance its product offerings, its competitors will most likely continue to improve their products and will likely develop new offerings with competitive price and performance characteristics. Although Thomas & Betts believes that it has specific technological and other advantages over certain of its competitors, because of the intensity of the competition in the product areas and geographic markets that it serves, Thomas & Betts could experience increased downward pressure on the selling prices for certain of its products.
	The activities of the Corporation’s competitors designed to enhance their own product offerings, coupled with any unforeseeable changes in customer demand for various products of Thomas & Betts, could affect the Corporation’s overall product mix, pricing, margins, plant utilization levels and asset valuations.

	Thomas & Betts is subject to governmental regulations throughout the world. Unforeseen changes in these governmental regulations may reduce its profitability. Namely, significant changes in monetary or fiscal policies in the U.S. and abroad could result in currency fluctuations, including fluctuations in the Canadian dollar, Euro and British pound, which, in turn, could adversely affect Thomas & Betts’ net sales, costs and expenses. Furthermore, significant changes in any number of governmental policies could create trade restrictions, patent enforcement issues, adverse tax rate changes and changes to tax treatment of items such as tax credits, withholding taxes, transfer pricing and other income and expense recognition for tax purposes, including changes in taxation on income generated in Puerto Rico. These changes might limit Thomas & Betts’ ability to sell its products in certain markets, and could negatively affect its business, operating results and financial condition.
	In addition, Thomas & Betts’ operations are subject to international, federal, state and local laws and regulations governing environmental matters, including emissions to air, discharge to waters and the generation and handling of waste. Thomas & Betts is also subject to laws relating to occupational health and safety. The operation of manufacturing plants involves a high level of susceptibility in these areas, and there is no assurance that Thomas & Betts will not incur material costs or 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

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	adopted or imposed in the future. Future remediation technology advances could adversely impact expectations of remediation expenses.

In accordance with its risk management practices, the Corporation continually reevaluates risks, their potential cost and the cost of minimizing them. To reduce the Corporation’s exposure to material risks, in certain circumstances, it purchases insurance. Certain risks are inherent in the manufacturing of the Corporation’s products and the Corporation’s insurance may not be adequate to cover potential claims against it involving its products. The Corporation is also exposed to risks inherent in the packaging and distribution of products. Although the Corporation maintains liability insurance, management cannot assure that the coverage limits under these insurance programs will be adequate to protect Thomas & Betts against future claims, or that the Corporation can and will maintain this insurance on acceptable terms in the future.

Terrorist acts and acts of war (wherever located around the world) may cause damage or disruption to our employees, facilities, suppliers, distributors or customers, which could significantly impact our net sales, costs and expenses and financial condition. The terrorist attacks that took place in the United States on September 11, 2001 were unprecedented events that have created many economic and political uncertainties, some of which may materially harm our business and results of operations. The potential for future terrorist attacks, the national and international responses to terrorist attacks, and other acts of war or hostility have created many economic and political uncertainties, which could adversely affect our business and results of operations in ways that cannot presently be predicted. In addition, as a global company with headquarters and significant operations located in the United States, we may be impacted by actions against the United States. We are uninsured for losses and interruptions caused by acts of war. However, our insurers have confirmed coverage for losses caused by terrorist acts within our policy limits.

      See “Caution Regarding Forward-Looking Statements” on page 3 hereof.

Manufacturing Restructuring Program

      In December 2001, Thomas & Betts announced a manufacturing restructuring program. The program was essentially completed in 2002 and as of December 31, 2003, no significant future cash outflows are anticipated for this program. The manufacturing restructuring program affected approximately two-thirds of the Corporation’s manufacturing operations, including all electrical products manufacturing plants in the United States, Europe and Mexico, and had three primary components: consolidating manufacturing capacity, improving processes, and investing in tooling and equipment. The total cost of the program was approximately $91 million, including $7 million of capital expenditures. The Corporation recorded $49.1 million in pre-tax charges in the fourth quarter of 2001 and $34.4 million during 2002.

      Thomas & Betts originally projected an on-going pre-tax savings, primarily in the form of reduced cost of sales, of approximately $45 to $50 million annually from the manufacturing restructuring program. These savings reflect lower fixed costs and improved labor efficiencies. However, due to lower than expected manufacturing volume levels associated with weak market conditions, pre-tax savings from the program realized in 2003 have been approximately half of

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Other Significant Items Impacting Earnings (Loss) from Operations

      The Corporation’s earnings (loss) during each of the three years ended December 31, 2003, were impacted by certain other significant items. The following is a list of those items and references to certain Notes in the Corporation’s Notes to Consolidated Financial Statements: (1) charges associated with a bankruptcy of a large cable TV customer in 2002, (2) charges associated with divested lighting product lines in 2001 (see Note 5), (3) charges associated with the closure of a U.S. satellite distribution center in 2003 (see Note 15), (4) the benefit in 2002 and 2003 from the cessation of depreciation on assets held for sale (see Note 5), (5) 2003 accrued costs primarily associated with the planned retirement of the Corporation’s former chief executive officer (see Note 15), (6) the favorable impact in 2003 and the unfavorable impacts in 2001 and 2002 from the settlement of certain litigation (see Note 14), and (7) the benefit from insurance recoveries in 2002 and 2003 (see Note 14).

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Recap of Significant Items Impacting Earnings (Loss) from Operations

      The following table illustrates impacts of the manufacturing restructuring program as well as the other significant items impacting earnings (loss) from operations highlighted above:

Year 2003 Compared with 2002

Overview

      The Corporation’s 2003 earnings from operations comparison to 2002 reflects relatively flat year over year results after considering the significant items highlighted in the above table; despite continued weak market conditions in all of its segments especially Steel Structures and Electrical where reduced investment by the utility sector contributed to lower sales volumes compared with 2002.

      The earnings impact from lower sales volumes, and to a lesser extent, higher material costs (primarily steel), and a less favorable sales mix in the U.S. electrical business, were offset by

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      Interest expense — net for 2003 reflected approximately $5.5 million of incremental interest expense related to $125 million senior unsecured notes issued in May 2003. The Corporation used the proceeds from this offering to repay $125 million in senior unsecured notes upon maturity in January 2004. Interest expense during 2003 also reflected the repayment of $50.5 million of debt in November 2002 and $60 million of debt in February 2003 and benefits from interest rate swap agreements. Interest income for 2002 included $2.0 million of interest income on a note receivable repaid to the Corporation and $3.3 million of interest income associated with income tax refunds.

      The Corporation’s 2003 net earnings (loss) comparison to 2002 reflects the above mentioned changes in earnings as well as an $11 million net tax charge in 2002 related to certain tax law changes, various favorable tax adjustments in 2003 that exceed similar adjustments in 2002, and a $45 million net-of-tax charge in the first quarter of 2002 for the impairment of goodwill associated with its HVAC segment upon the adoption of a new accounting standard.

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Consolidated Results

Net Sales and Gross Profit

      The Corporation’s 2003 net sales were down approximately 1.8% from 2002 levels. Sales volumes were significantly impacted by reduced investment by the utility sector where the Corporation is a leading provider of steel structures used for transmission systems and high voltage electrical connectors and switchgear. This lower demand negatively impacted sales primarily in the first half of 2003 and to a lesser extent in the second half of the year. The continued weakness in all of our U.S. markets was also a factor. These lower sales volumes were partially offset by an approximate $48 million benefit for foreign currency exchange driven primarily by strong Canadian and European currencies against a weaker U.S. dollar.

      The 2003 gross profit reflects the impact of lower sales volumes, higher material costs (primarily steel), and a less favorable sales mix in the Corporation’s U.S. electrical business; which was partially offset by manufacturing efficiency improvements derived mainly from the manufacturing restructuring program. The 2003 gross profit also reflects a charge of $3.7 million for the closing of a U.S. satellite distribution center. The 2002 gross profit included charges of $32.8 million associated with the Corporation’s manufacturing restructuring program, and a

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Expenses

      2003 selling general and administrative (SG&A) expense of approximately $283 million was relatively flat with 2002. SG&A in 2003 includes $4.5 million in expenses primarily associated with the former CEO’s planned retirement. The underlying improvement when compared with 2002 reflects the Corporation’s continued efforts to reduce and tightly control expenses despite the negative impact from foreign currency exchange in 2003. The Corporation’s goal is to achieve a sustainable level of SG&A at or below 20% of net sales.

      Other operating expense (income) — net for 2003 included a benefit of $8.9 million from the favorable settlement of a commercial lawsuit and $3.5 million of income from insurance proceeds. Other operating expense (income) — net for 2002 includes expense of $19.0 million for the settlement of a consolidated securities class action lawsuit. The Corporation has no remaining contingent obligations associated with this lawsuit, including with respect to the settlement account. The Corporation also realized $3.2 million of income from insurance proceeds in 2002.

      Impairment charges on long-lived assets in 2002 of $1.2 million reduced the Communication segment’s held for sale assets to their estimated net realizable value. Restructuring charges of $1.6 million in 2002 related to the manufacturing restructuring program.

Interest Expense — Net

      Interest expense — net for the year 2003 was up $1.7 million year over year, reflecting approximately $5.5 million of incremental interest expense related to $125 million senior unsecured notes issued in May 2003. The Corporation used the proceeds from this offering to repay $125 million in senior unsecured notes upon maturity in January 2004. Interest expense for 2003 was $4.3 million lower than 2002 reflecting the repayment of $50.5 million of debt in November 2002 and $60 million of debt in February 2003. Interest expense for 2003 also reflects lower interest rates, due in part to interest rate swap agreements on $250 million of debt, which resulted in a benefit of $6.3 million in 2003 and $1.5 million in 2002.

      Interest income included in interest expense — net was $4.2 million for 2003 and $10.1 million for 2002. Interest income for 2002 included $2.0 million of interest income on a note receivable repaid to the Corporation and $3.3 million of interest income associated with income tax refunds.

Income Taxes

      The Corporation’s 2003 and 2002 effective tax rates for continuing operations are a provision of 10.3% and 271.6%, respectively. In 2003, the Corporation recorded a tax benefit of $4.5 million resulting from the favorable completion of tax audits in the United States, United Kingdom and Germany and a corresponding reduction in worldwide tax exposure. As a result of certain tax law changes during 2002, the Corporation recorded an $11.0 million net tax charge composed of a $22.9 million tax charge related to converting certain foreign tax credits into foreign tax deductions, and an $11.9 million tax benefit from releasing a federal valuation allowance on deferred tax assets associated with minimum pension liabilities. See Note 7 in the Notes to Consolidated Financial Statements. In addition, during 2002 the Corporation recorded a

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Cumulative Effect of an Accounting Change

      During the second quarter of 2002, the Corporation completed its transitional evaluation of goodwill as of the beginning of 2002 as required under the new accounting standard SFAS No. 142. Consequently, the Corporation recorded in its first quarter 2002 a $44.8 million non-cash charge for an impairment of goodwill associated with its HVAC segment. This charge reflects the cumulative effect of adopting the accounting change and does not affect day-to-day operations of the Corporation. See Note 3 in the Notes to Consolidated Financial Statements.

Net Earnings (Loss)

      Net earnings were $42.8 million, or $0.73 per basic and fully diluted share, in 2003 compared to a net loss of $53 million, or a loss per share of $0.91 in 2002. Results in 2002 included the above mentioned $44.8 million, or $0.77 per share, goodwill impairment charge associated with the adoption of SFAS No. 142.

Year 2002 Compared with 2001

Overview

      The Corporation’s 2002 earnings from operations comparison to 2001 reflects an improvement year over year after considering the significant items highlighted in the Recap of Significant Items above. These improvements came despite weak market conditions in all of the markets the Corporation operates in. Significantly lower manufacturing costs, partially as a result of the manufacturing restructuring program and significantly lower selling, general and administrative expenses reflecting efforts to size sales and support functions in line with market conditions were the primary drivers for the improvement. Improved selling prices in the Corporation’s Electrical segment and lower freight costs were also contributing factors.

      The Corporation’s 2002 net earnings (loss) comparison to 2001 reflects an $11 million net tax charge in 2002 related to certain tax law changes, a $2.2 million tax benefit as a result of completing several tax audits and a reduction of worldwide tax exposures, a $2.0 million tax benefit from increased volumes in the Corporation’s Puerto Rican manufacturing operations, a $45 million net-of-tax charge in the first quarter of 2002 for the impairment of goodwill associated with its HVAC segment upon the adoption of a new accounting standard and an $8 million net-of-tax charge in 2001 to gain on sale of discontinued operations reflecting a negotiated settlement with the buyer. See Note 4 to the Corporation’s Notes to Consolidated Financial Statements.

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Consolidated Results

Net Sales and Gross Profit

      The Corporation’s net sales decrease reflects persistently weak market conditions in all of its operating segments. Net sales in the prior year included approximately $80 million from divested and discontinued product lines. Several factors, including significantly lower manufacturing costs partially as a result of the manufacturing restructuring program, lower freight expense, and improved pricing in the Electrical segment contributed to improved gross profit. Gross profit for 2002 and 2001 included charges of $32.8 million and $7.4 million, respectively, associated with the manufacturing restructuring program. In addition, both periods were negatively impacted by unabsorbed manufacturing fixed costs associated with operating at the lower range of practical capacity due to weak industry demand. Additionally, 2002 included a charge to net sales of $4.6 million from the bankruptcy of a large cable TV customer.

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Expenses

      Selling, general and administrative (SG&A) expenses were 21.0% of net sales in 2002, versus 22.8% in 2001. The Corporation continued its efforts to size selling and support functions commensurate with market conditions and to tightly manage expenses. SG&A expenses would have been $325.2 million or 21.7% of net sales in 2001 when adjusted for the elimination of goodwill amortization in accordance with Statement of Financial Accounting Standards No. 142 (SFAS 142). See Note 3 in the Notes to Consolidated Financial Statements.

      Other operating expense (income) — net for 2002 includes expense of $19 million for the settlement of a consolidated securities class action lawsuit and $3.2 million of income from insurance proceeds. The prior year includes expense of $27 million for the settlement of a patent infringement lawsuit.

      ADC Telecommunications, Inc. (“ADC”), a publicly traded company, sued the Corporation for patent infringement with respect to a super high-density bay and jack panel. The case was settled in 2002 when the Corporation paid $27 million in cash to ADC and this amount was accrued by the Corporation in the fourth quarter of 2001 at the time the settlement amount was determined and agreement was reached. The Corporation no longer makes this product, which was discontinued in 2000 in connection with the telecommunications product line divestiture. The Corporation has not entered into an agreement with ADC for a royalty or license.

      Impairment charges on long-lived assets in 2001 included $30.0 million associated with the manufacturing restructuring program, $36.6 million related to the impairment and subsequent sale of the Corporation’s American Electric and Dark-to-Light lighting product lines and $16.7 million to reduce certain non-strategic held for sale assets in its Communications segment to their estimated net realizable value. Impairment charges on long-lived assets in 2002 included a further reduction of $1.2 million for the Communication segment’s held for sale assets to their estimated net realizable value. Restructuring charges of $1.6 million and $11.7 million in 2002 and 2001, respectively, related to the manufacturing restructuring program.

Interest Expense — Net

      Interest expense — net for the year 2002 was down $6.7 million year over year, primarily due to lower net interest rates, lower debt levels, and higher interest income. Lower net interest rates were due in part to interest rate swap agreements on $250 million of debt entered into during 2002 which resulted in a benefit of $1.5 million.

      Interest income included in interest expense — net was $10.1 million in 2002 and $7.1 million in 2001. Interest income for 2002 included $2.0 million of interest income on a note receivable repaid to the Corporation and $3.3 million of interest income associated with income tax refunds.

Income Taxes

      The Corporation’s 2002 and 2001 effective tax rates for continuing operations are a provision of 271.6% and a benefit of (25.8)%, respectively. As a result of certain tax law changes during 2002, the Corporation recorded an $11.0 million net tax charge composed of a $22.9 million tax charge related to converting certain foreign tax credits into foreign tax deductions, and an $11.9 million tax benefit from releasing a federal valuation allowance on deferred tax assets associated with minimum pension liabilities. See Note 7 in the Notes to Consolidated Financial Statements. In addition, during 2002 the Corporation recorded a tax benefit of $2.2 million as a

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Cumulative Effect of an Accounting Change

      During the second quarter of 2002, the Corporation completed its transitional evaluation of goodwill as of the beginning of 2002 as required under the new accounting standard SFAS No. 142. Consequently, the Corporation recorded in its first quarter 2002 a $44.8 million non-cash charge for an impairment of goodwill associated with its HVAC segment. See Note 3 in the Notes to Consolidated Financial Statements.

Net Loss

      Net loss from continuing operations was $8.2 million in 2002 compared with a net loss from continuing operations of $138.9 million in 2001. When adjusted for the elimination of goodwill amortization in the prior year, in accordance with SFAS No. 142, the net loss from continuing operations in 2001 would have been $123.1 million. See Note 3 in the Notes to Consolidated Financial Statements. The 2001 net loss also included a $7.5 million net-of-tax charge to gain on sale of discontinued operations reflecting a negotiated settlement with the buyer.

Segment Results

      The Corporation evaluates its business segments on the basis of segment earnings (loss), with segment earnings (loss) defined as earnings (loss) from continuing operations before interest, taxes, asset impairments, restructuring charges and certain other charges.

      The Corporation’s segment earnings (loss) is significantly influenced by the operating performance of its Electrical segment that accounts for approximately three-fourths of the Corporation’s net sales and a majority of its segment earnings during each of the three years ended December 31, 2003. During the years presented, the Electrical segment’s plants operated at the lower range of practical capacity due to weak industry demand.