SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

Commission file no. 1-2958

Hubbell Incorporated

(Exact name of Registrant as specified in its charter)

(203) 799-4100

(Registrant’s telephone number, including area code)

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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes þ          No o

      Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.     Yes o          No þ

      Indicate by check mark if 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 report), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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.     o

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

Large Accelerated Filer     þ          Accelerated Filer     o          Non-Accelerated Filer     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

      The approximate aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2005 was $2,437,201,213*. The number of shares outstanding of the Class A Common Stock and Class B Common Stock as of March 3, 2006 was 8,594,380 and 51,972,470, respectively.

Documents Incorporated by Reference

      Portions of the definitive proxy statement for the annual meeting of shareholders scheduled to be held on May 1, 2006, to be filed with the Securities and Exchange Commission (the “SEC”), are incorporated by reference in answer to Part III of this Form 10-K.

HUBBELL INCORPORATED

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31, 2005

TABLE OF CONTENTS

PART I

      Hubbell Incorporated (herein referred to as “Hubbell”, the “Company”, the “registrant”, “we”, “our” or “us”, which references shall include its divisions and subsidiaries as the context may require) was founded as a proprietorship in 1888, and was incorporated in Connecticut in 1905. Hubbell is primarily engaged in the design, manufacture and sale of high quality electrical and electronic products for a broad range of commercial, industrial, telecommunications, utility, and residential applications. Products are either sourced complete or manufactured or assembled by subsidiaries in the United States, Canada, Switzerland, Puerto Rico, Mexico, Italy, Brazil and the United Kingdom. Hubbell also participates in a joint venture in Taiwan, and maintains sales offices in Singapore, the People’s Republic of China, Mexico, Hong Kong, South Korea, and the Middle East.

      For management reporting and control, the businesses are divided into three segments: Electrical, Power and Industrial Technology, as described below. Reference is made to Note 20 — Industry Segments and Geographic Area Information under Notes to Consolidated Financial Statements.

      The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are made available free of charge through the Investor Relations section of the Company’s website at http://www.hubbell.com as soon as practicable after such material is electronically filed with, or furnished to, the SEC.

ELECTRICAL SEGMENT

      The Electrical Segment is comprised of businesses that primarily sell through distributors, lighting showrooms, home centers and telephone and telecommunications companies, and represents stock and custom products including standard and special application wiring device products, lighting fixtures and controls, fittings, switches and outlet boxes, enclosures, wire management products and voice and data signal processing components. The products are typically used in and around industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, and telecommunications companies. Certain lighting fixtures, wiring devices and electrical products also have residential application.

Electrical Wiring Devices

      Hubbell designs, manufactures and sells highly durable and reliable wiring devices which are supplied principally to industrial, commercial and institutional customers, although certain products also have residential application. These products, comprising several thousand catalog items, include plugs, dimmers, receptacles (including surge suppressor units), wall outlets, connectors, adapters, floor boxes, switches, occupancy sensors (including passive infrared and ultrasonic motion sensing devices), lampholders, control switches, outlet strips, pendants, weatherproof enclosures, and wallplates. Pin-and-sleeve devices built to International Electrotechnical Commission (“IEC”) and new Underwriter Laboratory (“UL”) standards have incorporated improved water and dust-tight construction and impact resistance. Switch and receptacle wall plates feature proprietary thermoplastic materials offering high impact resistance and durability, and are available in a variety of colors and styles. Delivery systems, including metallic and nonmetallic surface raceway systems for power, data and communications distribution, provide efficiency and flexibility in both initial installations and remodeling applications. Hubbell also sells wiring devices for use in certain environments requiring specialized products, such as signal and control connectors and cable assemblies for the connection of sensors in materials processing, modular cable protection systems, cable and devices for marine applications and portable power distribution units with ground fault protection for commercial and industrial applications. Circuit Guard^® ground fault units protect the user from electrical shock by interrupting the circuit to which they are connected when a fault to ground is detected. Hubbell manufactures TVSS (transient voltage surge suppression) devices, under the Spikeshield^® trademark, which are used to protect electronic equipment such as personal computers and other supersensitive electronic equipment. Hubbell also manufactures and/or sells components designed for use in local area networks (“LANs”) and other

telecommunications applications supporting high-speed data and voice signals. Primary products include work station modular jacks, faceplates, surface housings, modular furniture plates, cross connect patch panels, connectorized cable assemblies, punch down blocks, free standing racks, enclosures and other products used for installation, testing and distribution of LANs. These products support unshielded, shielded and fiber optic media types and typically service commercial, institutional and industrial applications.

Lighting Fixtures and Controls

      Hubbell manufactures and sells lighting fixtures for indoor and outdoor applications with four classifications of products: Outdoor, Industrial, Commercial/ Institutional, and Residential. Outdoor products include Hubbell outdoor lighting and Sterner^® floodlights and poles, Devine^® series fixtures, Kim^® architectural fixtures which feature pedestrian zone, path, landscape, building and area lighting products and poles, Security^® outdoor and signage fixtures, Spaulding^tm area lighting fixtures and poles, AAL^tm flood and step lighting fixtures, sconces, bollards in period, contemporary and customer designs, Moldcast^® bollards, street lighting fixtures and poles and wall mounted fixtures, and Whiteway^tm canopy light fixtures, which are used to illuminate service stations, truck stops, outdoor display signs, parking lots, roadways, pedestrian areas, security areas, automobile dealerships, shopping centers, convenience stores, quick service restaurants, and similar areas, and Sportsliter^® fixtures which are used to illuminate athletic and recreational fields. In addition, a line of Lightscaper^® decorative outdoor fixtures is sold for use in landscaping applications such as pools, gardens and walkways. Industrial products include high and low bay fixtures used to illuminate factories, work spaces, and areas with specialty requirements such as paint rooms, clean rooms and warehouses. Commercial/ Institutional products include high intensity discharge (“HID”) fixtures, Alera^tm architectural and Columbia Lighting^® specification grade fluorescent fixtures, Dual-Lite^® emergency and exit fixtures, and Prescolite^® recessed, surface mounted and track fixtures which are used for offices, schools, hospitals, airports, retail stores, and similar applications. The fixtures use high pressure sodium and metal-halide HID lamps, as well as quartz, fluorescent and incandescent lamps, all of which are purchased from other sources. Hubbell also manufactures a broad range of life safety products, emergency lighting, exit signs and inverter power systems which are used in specialized safety applications under the Dual-Lite^® and Corner Stone Life Safety^® trademarks, and a line of IEC lighting fixtures designed for hazardous, hostile and corrosive applications sold under the Chalmit^tm, Victor^tm and Killark^® trademarks. The residential products, which are sold under the Progress Lighting^® trademarks, include chandeliers, hall and foyer, sconces, track, recessed, bath and vanity, pendants, close to ceiling, under-cabinet, portable lights, fans, door chimes, dimmers, and outdoor and landscape lighting fixtures.

Outlet Boxes, Enclosures and Fittings

      Hubbell manufactures and/or sells: (a) under the Raco^® trademark, steel and plastic boxes used at outlets, switch locations and junction points; (b) a broad line of metallic fittings, including rigid plastic conduit fittings, EMT (thinwall) fittings and liquid tight conduit fittings; (c) Bell Outdoor^® outlet boxes; (d) a variety of electrical boxes, covers, combination devices, lampholders and lever switches manufactured under the Bell^® trademark, with an emphasis on weather-resistant products suitable for outdoor applications; and (e) under the Wiegmann^® trademark, a full-line of fabricated steel electrical equipment enclosures such as rainproof and dust-tight panels, consoles and cabinets, wireway and electronic enclosures and a line of non-metallic electrical equipment enclosures. Wiegmann^® products are designed to enclose and protect electrical conductors, terminations, instruments, power distribution and control equipment.

Holding Devices

      Hubbell manufactures and sells a line of Kellems^® and Bryant^® mesh grips used to pull, support and create strain relief in elongated items such as cables, electrical cords, hoses and conduits, a line of Gotcha^® cord connectors designed to prevent electrical conductors from pulling away from electrical terminals to which the conductors are attached, and wire management products including non-metallic surface raceway products for wiring and non-metallic liquid-tight flexible conduit for OEM applications. The grips are sold under the Kellems^® and Dua-Pull^® trademarks and range in size and strength to accommodate differing application

needs. These products, which are designed to tighten around the gripped items, are sold to industrial, commercial, utility and microwave and cell phone tower markets.

Hazardous and Hostile Location Application Products

      Hubbell’s special application products, which are sold under the Killark^® trademark, include weatherproof and hazardous location products suitable for standard, explosion-proof and other hostile area applications, conduit raceway fittings, Disconex^® switches, enclosures, HostileLite^® lighting fixtures, electrical distribution equipment, standard and custom electrical motor controls, junction boxes, plugs and receptacles. Hubbell also manufactures and sells, under the Hawke^® trademark, a line of cable glands and cable connectors, enclosures and breathers for the hazardous area and industrial markets. Hazardous locations are those areas where a potential for explosion and fire exists due to the presence of flammable gasses, fibers, vapors, dust or other easily ignitable materials and include such applications as refineries, petro-chemical plants, grain elevators and material processing areas.

Telecommunications Products

      Hubbell designs, manufactures and sells, under the Pulsecom^® trademark, voice and data signal processing components primarily used by telephone and telecommunications companies, consisting of channel cards and banks for loop and trunk carriers, racks and cabinets. These products provide a broad range of communications access solutions for use by the telephone and telecommunications industry including: (a) digital loop carrier solutions to multiplex traffic from many users over a single link using existing copper or fiber facilities and providing easier and more cost-effective service to new users, since fewer and smaller cables are required for providing expanded service; and (b) D4 solutions to provide delivery of integrated voice and data services. Customers of these product lines include various telecommunications companies, the Regional Bell Operating Companies (“RBOCs”), independent telephone companies, competitive local exchange carriers, companies with private networks, and internet service providers.

Sales and Distribution of Electrical Segment Products

      A majority of Hubbell’s Electrical Segment products are stock items and are sold through electrical and industrial distributors, home centers, some retail and hardware outlets, and lighting showrooms. Special application products are sold primarily through wholesale distributors to contractors, industrial customers and original equipment manufacturers. Voice and data signal processing equipment products are represented worldwide through a direct sales organization and by selected independent telecommunications representatives, primarily sold through datacom, electrical and catalogue distribution channels. Telecommunications products are sold primarily by direct sales to customers in the United States and internationally through sales personnel and sales representatives. Hubbell maintains a sales and marketing organization to assist potential users with the application of certain products to their specific requirements, and with architects, engineers, industrial designers, original equipment manufacturers and electrical contractors for the design of electrical systems to meet the specific requirements of industrial, institutional, commercial and residential users. Hubbell is also represented by sales agents for its lighting fixtures, electrical wiring devices, boxes, enclosures, and fittings product lines. The sales of Electrical Segment products accounted for approximately 71% of Hubbell’s revenue in 2005 and 74% in 2004 and 2003.

POWER SEGMENT

      Power Segment operations design and manufacture a wide variety of construction, switching and protection products, hot line tools, grounding equipment, cover ups, fittings and fasteners, cable accessories, insulators, arresters, cutouts, sectionalizers, connectors and compression tools for the building and maintenance of overhead and underground power and telephone lines, as well as applications in the industrial, construction and pipeline industries.

Electrical Transmission and Distribution Products

      Hubbell manufactures and sells, under the Ohio Brass^® registered trademark, a complete line of polymer insulators and high-voltage surge arresters used in the construction of electrical transmission and distribution lines and substations. The primary focus in this product area are the Hi*Lite^®, Hi*Lite^®XL and Veri*Lite^tm polymer insulator lines and the polymer housed metal-oxide varistor surge arrester lines. Electrical transmission products and post insulators are used in the expansion and upgrading of electrical transmission capability.

      Hubbell manufactures and sells, under the Chance^® trademark, products used in the electrical transmission and distribution and telecommunications industries, including overhead and underground electrical apparatus such as (a) distribution switches (to control and route the flow of power through electrical lines); (b) cutouts, sectionalizers, and fuses (to protect against faults and over-current conditions on power distribution systems); and (c) fiberglass insulation systems (pole framing and conductor insulation).

      Hubbell manufactures and sells, under the Anderson^® trademark, electrical connectors and associated hardware including pole line, line and tower hardware, compression crimping tools and accessories, mechanical and compression connectors, suspension clamps, terminals, supports, couplers, and tees for utility distribution and transmission systems, substations, and utility industry.

      Hubbell manufactures and sells, under the Fargo^® trademark, electrical power distribution and transmission products, principally for the utility industry. Distribution products include electrical connectors, automatic line splices, dead ends, hot line taps, wildlife protectors, and various associated products. Transmission products include splices, sleeves, connectors, dead ends, spacers and dampers. Products also consist of original equipment and resale products including substation fittings for cable, tube and bus as well as underground enclosures, wrenches, hydraulic pumps and presses, and coatings.

      Hubbell manufactures and sells, under the Hubbell^® trademark, cable accessories including loadbreak switching technology, deadbreak products, surge protection, cable splicing and cable termination products, as well as automation-ready overhead switches and aluminum transformer equipment mounts for transformers and equipment.

Construction Materials/ Tools

      Hubbell manufactures and sells, under the Chance^® trademark, (a) line construction materials including power-installed helical earth anchors and power-installed foundations to secure overhead power and communications line poles, guyed and self-supporting towers, streetlight poles and pipelines (Helical Pier^® Foundation Systems are used to support homes and buildings, and earth anchors are used in a variety of farm, home and construction projects including tie-back applications); (b) pole line hardware, including galvanized steel fixtures and extruded plastic materials used in overhead and underground line construction, connectors, fasteners, pole and crossarm accessories, insulator pins, mounting brackets and related components, and other accessories for making high voltage connections and linkages; (c) construction tools and accessories for building overhead and underground power and telephone lines; and (d) hot-line tools (all types of tools mounted on insulated poles used to construct and maintain energized high voltage lines) and other safety equipment. Hubbell also manufactures and sells, under the Atlas^® trademark, helical and resistance piering products used in a variety of civil engineering applications.

Sales and Distribution of Power Segment Products

      Sales of Power Segment products are made through a Hubbell sales and marketing organization to distributors and directly to users such as electric utilities, mining operations, industrial firms, and engineering and construction firms. While Hubbell believes its sales in this area are not materially dependent upon any customer or group of customers, a decrease in purchases by public utilities does affect this category. The sale of Power Segment products accounted for approximately 22% of Hubbell’s total revenue in 2005 and 19% in 2004 and 2003.

INDUSTRIAL TECHNOLOGY SEGMENT

      The Industrial Technology Segment consists of operations that design and manufacture test and measurement equipment, high voltage power supplies and variable transformers, industrial controls including motor speed controls, pendant-type push-button stations, overhead crane controls, control and pressure switches, DC devices, Gleason Reel^® electric cable and hose reels, and specialized communications systems such as intra-facility communications systems, telephone systems, and land mobile radio peripherals. Products are sold primarily to steel mills, industrial complexes, oil, gas and petrochemical industries, seaports, transportation authorities, the security industry (malls and colleges), and cable and electronic equipment manufacturers.

High Voltage Test and Measurement Equipment

      Hubbell manufactures and sells, under the Hipotronics^®, Haefely Test^tm and Tettex^® trademarks, a broad line of high voltage test and measurement systems to test materials and equipment used in the generation, transmission and distribution of electricity, and high voltage power supplies and electromagnetic compliance equipment for use in the electrical and electronic industries. Principal products include AC/ DC hipot testers and megohmmeters, cable fault location systems, oil testers and DC hipots, impulse generators, digital measurement systems and tan-delta bridges, AC series resonant and corona detection systems, DC test sets and power supplies, variable transformers, voltage regulators, and motor and transformer test sets.

Industrial Controls and Communication Systems

      Hubbell manufactures and sells a variety of heavy-duty electrical and radio control products which have broad application in the control of industrial equipment and processes. These products range from standard and specialized industrial control components to combinations of components that control industrial manufacturing processes. Standard products include motor speed controls, pendant-type push-button stations, pressure switches (used in air compressor and water pump systems), DC devices (used in locomotive and heavy industrial control systems), power and grounding resistors and overhead crane controls. Also manufactured and sold are a line of transfer switches used to direct electrical supply from alternate sources, and a line of fire pump control products used in fire control systems.

      Hubbell manufactures, under the Gleason Reel^® trademark, industrial-quality cable management products including electric cable and hose reels, protective steel and nylon cable tracks (cable and hose carriers), cable festooning hardware, highly engineered container crane reels and festoons for the international market, slip rings, and a line of ergonomic tool support systems (workstation accessories and components such as balancers, retractors, torque reels, tool supports, boom and jib kits).

      Hubbell manufactures and sells under the GAI-Tronics^® trademark, specialized communications systems designed to withstand indoor and outdoor hazardous environments. Products include intra-facility communication systems, telephone systems, and land mobile radio peripherals. These products are sold to oil, gas and petrochemical industries, transportation authorities (for use on public highways and in trains and on train platforms), and the security industry (for use in malls and on college campuses).

Sales and Distribution of Industrial Technology Segment Products

      Hubbell’s Industrial Technology Segment products are sold primarily through direct sales and sales representatives to contractors, industrial customers and original equipment manufacturers, with the exception of high voltage test and measurement equipment which is sold primarily by direct sales to customers in the United States and in foreign countries through its sales engineers and independent sales representatives.

      The sale of products in the Industrial Technology Segment accounted for approximately 7% of Hubbell’s total revenue in 2005, 2004 and 2003.

INFORMATION APPLICABLE TO ALL GENERAL CATEGORIES

International Operations

      The Company has several operations located in the United Kingdom. Hubbell Limited manufactures and/or markets fuse switches, contactors, selected wiring device products and premise wiring products, industrial control products used in motor control applications such as fuse switches and contactors. Chalmit Lighting manufactures and/or markets lighting fixtures designed for hazardous, hostile and corrosive applications. Hawke Cable Glands (“Hawke”) manufactures and/or markets a range of products used in hazardous locations including brass cable glands and cable connectors used in watertight terminations, cable transition devices, utility transformer breathers and enclosures. GAI-Tronics manufactures and/or markets specialized communication systems designed to withstand indoor and outdoor hazardous environments.

      Hubbell Canada LP and Hubbell de Mexico, S.A. de C.V. markets and sells wiring devices, premise wiring products, lighting fixtures and controls, grips, fittings, switches and outlet boxes, hazardous location products, electrical transmission and distribution products and earth anchoring systems. Industrial control products are sold in Canada through an independent sales agent. Hubbell Canada LP also designs and manufactures electrical outlet boxes, metallic wall plates, and related accessories.

      Harvey Hubbell S.E. Asia Pte. Ltd. in Singapore markets wiring devices, lighting fixtures, hazardous location products and electrical transmission and distribution products.

      Haefely Test, AG in Switzerland designs and manufactures high voltage test and instrumentation systems, and GAI-Tronics S.r.l. in Italy designs and manufactures specialized communications systems.

      Hubbell manufactures, markets and sells, under the Delmar^® trademark, products used in the electric utility transmission and distribution industries, including cutouts, fuselinks, arresters and overhead and substation switches. These products are manufactured at the Company’s facility in Tatui, Brazil, for sale primarily in Latin America.

      Hubbell also manufactures lighting products, weatherproof outlet boxes, fittings, and power products in Juarez and Tijuana, Mexico. In addition, Hubbell has interests in various other international operations such as a joint venture in Taiwan, and maintains sales offices in Mexico, Singapore, the People’s Republic of China, Hong Kong, South Korea and the Middle East.

      As a percentage of total sales, international shipments from foreign subsidiaries directly to third parties were 11% in 2005 and 10% in 2004 and 2003 with the Canadian and United Kingdom markets representing approximately 42% and 33%, respectively, of the 2005 total.

Raw Materials

      Raw materials used in the manufacture of Hubbell products primarily include steel, brass, copper, aluminum, bronze, plastics, phenolics, zinc, nickel, elastomers and petrochemicals. Hubbell also purchases certain electrical and electronic components, including solenoids, lighting ballasts, printed circuit boards, integrated circuit chips and cord sets, from a number of suppliers. Hubbell is not materially dependent upon any one supplier for raw materials used in the manufacture of its products and equipment, and at the present time, raw materials and components essential to its operation are in adequate supply. However, certain of these principal raw materials are sourced from a limited number of suppliers. Also see Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Patents

      Hubbell has approximately 1,200 active United States and foreign patents covering many of its products, which expire at various times. While Hubbell deems these patents to be of value, it does not consider its business to be dependent upon patent protection. Hubbell licenses under patents owned by others, as may be needed, and grants licenses under certain of its patents.

Working Capital

      Inventory, accounts receivable and accounts payable levels, payment terms and, where applicable, return policies are in accordance with the general practices of the electrical products industry and standard business procedures. See also Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Backlog

      Backlog of orders believed to be firm at December 31, 2005 and 2004 were approximately $174.0 million and $137.5 million, respectively. The increase in the backlog in 2005 is attributable to increased order levels in the Power and Industrial Technology segments. A majority of the backlog is expected to be shipped in the current year. Although this backlog is important, the majority of Hubbell’s revenues result from sales of inventoried products or products that have short periods of manufacture.

Competition

      Hubbell experiences substantial competition in all categories of its business, but does not compete with the same companies in all of its product categories. The number and size of competitors vary considerably depending on the product line. Hubbell cannot specify with exactitude the number of competitors in each product category or their relative market position. However, some of its competitors are larger companies with substantial financial and other resources. Hubbell considers product performance, reliability, quality and technological innovation as important factors relevant to all areas of its business, and considers its reputation as a manufacturer of quality products to be an important factor in its business. In addition, product price, service levels and other factors can affect Hubbell’s ability to compete.

Research, Development & Engineering

      Research, development and engineering expenditures represent costs incurred in the experimental or laboratory sense aimed at discovery and/or application of new knowledge in developing a new product, process, or in bringing about a significant improvement in an existing product or process. Research, development and engineering expenses are recorded as a component of Cost of goods sold. Expenses for research, development and engineering were $6.5 million in 2005, $6.2 million in 2004 and $6.3 million in 2003.

Environment

      The Company is subject to various federal, state and local government requirements relating to the protection of employee health and safety and the environment. The Company believes that, as a general matter, its policies, practices and procedures are properly designed to prevent unreasonable risk of environmental damage and personal injury to employees and employees of our customers and that the handling, manufacture, use and disposal of hazardous or toxic substances are in accord with environmental laws and regulations.

      Like other companies engaged in similar businesses, the Company has incurred remedial response and voluntary cleanup costs for site contamination and is a party to product liability and other lawsuits and claims associated with environmental matters, including past production of product containing toxic substances. Additional lawsuits, claims and costs involving environmental matters are likely to continue to arise in the future. However, considering past experience, insurance coverage and reserves, the Company does not anticipate that these matters will have a material impact on earnings, capital expenditures, or competitive position. See also Note 15 — Commitments and Contingencies in the Notes to Consolidated Financial Statements.

Employees

      As of December 31, 2005, Hubbell had approximately 11,300 salaried and hourly employees. Approximately 7,400 of these employees or 65% are located in the United States, one-half of which are represented by eighteen labor unions. Hubbell considers its labor relations to be satisfactory.

      Our business, operating results, financial condition, and cash flows may be impacted by a number of factors including, but not limited to those set forth below. Any one of these factors could cause our actual results to vary materially from recent results or future anticipated results.

We operate in markets that are subject to competitive pressures that could affect selling prices or demand for our products.

      We compete on the basis of product performance, quality, service and/or price. Our competitive strategy is to design and manufacture high quality products at the lowest possible cost. Our competitors include companies that have greater sales and financial resources than our Company. Competition could affect future selling prices or demand for our products.

Lower levels of economic activity in our end markets could adversely affect our operating results.

      Our businesses operate in several market segments including commercial, industrial, residential, utility and telecommunications. Operating results can be negatively impacted by volatility in these markets. Future downturns in any of the markets we serve could adversely affect our overall sales and profitability.

We source raw materials from various suppliers located in countries throughout the world. A disruption in the availability or price of these products could impact our operating results.

      We use a variety of raw materials in the production of our products including steel, brass, copper, aluminum, bronze, zinc, nickel and plastics. We have multiple sources of supply for these products and are not dependent on any single supplier. However, significant shortages of these materials or price increases could increase our operating costs and adversely impact the competitive positions of our products which would directly impact our results of operations.

      We continue to increase the amount of product materials, components and finished goods which is sourced from low cost countries, including Mexico, China, and other Asian countries. A political disruption or significant changes related to transportation from one of these countries could affect the availability of these materials and components which would directly impact our results of operations.

We engage in acquisitions and strategic investments and may encounter difficulty in integrating these businesses.

      We have pursued and will continue to seek potential acquisitions and other strategic investments to complement and expand our existing businesses within our core markets. In 2005 we completed five small acquisitions. The success of these transactions will depend on our ability to integrate these businesses into our operations. We may encounter difficulties in integrating acquisitions into our operations and in managing strategic investments. Therefore, we may not realize the degree or timing of the benefits anticipated when we first enter into a transaction.

Our operating results may be impacted by actions related to our lighting integration and rationalization program.

      We continue to execute a multi-year program to integrate and rationalize our lighting businesses through factory consolidations, workforce reductions and product rationalizations. These activities consist of complex relocations of critical personnel and machinery, as well as hiring and training of new personnel and, in some cases, expansion or other modification to facilities. All of these activities are thoroughly planned and under the

direction of experienced management personnel. However, the actions are occurring simultaneous with normal business operations and other initiatives. Therefore, there is a risk that (1) we may not complete the activities on a timely basis and incur duplicate or higher costs, (2) we may lose essential personnel and knowledge in transition and have to reestablish processes and procedures, and (3) our normal operations could be disrupted and interfere with our ability to manufacture and ship our products to satisfy the demands of our customers.

Our operating results may be impacted by actions related to our enterprise-wide business system initiative.

      We continue to implement an enterprise-wide business system across our domestic operations. We have successfully completed two implementations and converted approximately one-half of our users to the SAP system. This activity involves the migration of multiple legacy systems and users to a common SAP information platform. Throughout this process, we are changing the way we conduct business and employees’ roles in processing and utilizing information. In addition, certain interfaces with our customers and suppliers are impacted which results in changes to the tools we use to take orders, procure material, schedule production, remit billings, make payments and perform other business functions. Based upon the complexity of this initiative, there is risk that (1) we are unable to complete the implementation in accordance with our timeline and incur additional costs, (2) the implementation could result in operating inefficiencies which could impact operating results, and (3) the implementation could impact our ability to perform necessary business transactions. All of these risks could adversely impact our results of operations, financial condition and cash flows.

We are subject to litigation and environmental regulations that may adversely impact our operating results.

      We are, and may in the future be, a party to a number of legal proceedings and claims, including those involving product liability and environmental matters, which could be significant. Given the inherent uncertainty of litigation, we can offer no assurance that existing litigation or a future adverse development will not have a material adverse impact. We are also subject to various laws and regulations relating to environmental protection and the discharge of materials into the environment, and we could incur substantial costs as a result of the noncompliance with or liability for clean up or other costs or damages under environmental laws.

      None

      Hubbell’s manufacturing and warehousing facilities, classified by segment are located in the following areas. The Company believes its manufacturing and warehousing facilities are adequate to carry on its business activities.

      As described in Note 15 — Commitments and Contingencies in the Notes to Consolidated Financial Statements, the Company is involved in various legal proceedings, including workers’ compensation, product liability and environmental matters, including, for each, past production of product containing toxic substances, which have arisen in the normal course of its operations and with respect to which the Company is self-insured for certain incidents at various amounts. Management believes, considering its past experience, insurance coverage and reserves, that the final outcome of such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

      No matters were submitted to a vote of security holders during the fourth quarter of 2005.

      There are no family relationships between any of the above-named executive officers.

PART II

      The Company’s Class A and Class B common stocks are principally traded on the New York Stock Exchange under the symbols “HUBA” and “HUBB”. The following tables provide information on market prices, dividends declared, number of common shareholders, and repurchases by the Company of shares of its Class A and Class B common stock.

Purchases of Equity Securities

      In September 2003, the Company’s Board of Directors approved a stock repurchase program and authorized the repurchase of up to $60.0 million of the Company’s Class A and Class B common stock. The program was completed as of September 30, 2005.

      In June 2005, the Company’s Board of Directors approved a new stock repurchase program and authorized the purchase of up to $60.0 million of the Company’s Class A and Class B common stock. Stock repurchases under the June 2005 program are being implemented through open market and privately negotiated transactions. The timing of such transactions depends on a variety of factors, including market conditions.

      The following summary should be read in conjunction with the consolidated financial statements and notes contained herein (dollars and shares in millions, except per share amounts).

EXECUTIVE OVERVIEW OF THE BUSINESS

      During 2005, we continued to focus and make progress against a consistent set of key objectives. We believe the areas of focus described below, while long-term in nature, will provide the means for our Company to grow and deliver strong returns to our shareholders. Our business strategy incorporates the following objectives:

      Total program spending is expected to approximate $70-$80 million, pretax, on the business system initiative — from inception in late 2003 through the end of 2006 — of which approximately 55% will be capitalized (and amortized over 5 years) and 45% will be expensed as incurred. The estimate of total program spending increased in the fourth quarter of 2005 primarily due to changes in project scope. In connection with the implementation of this program, we expensed approximately $8.3 million and $10.1 million in 2005 and 2004, respectively, primarily related to external consulting costs. For the full year 2005, we capitalized $18.6 million of costs (primarily recorded in “Intangible assets and other” in the Consolidated Balance Sheets) associated with the program compared with $12.8 million capitalized in 2004. From inception through December 31, 2005 we have expensed approximately $22.0 million and capitalized $35.0 million with respect to this program. In addition, amortization expense on the amounts capitalized totaled $4.1 million in 2005

compared to $0.6 million in 2004. Program expenses are allocated to our three segments on the basis of each segment’s actual net sales as a percentage of consolidated net sales.

OUTLOOK

      Our outlook for 2006 in key areas is as follows:

Markets and Sales

      We anticipate overall economic conditions to remain positive throughout 2006 in most of our major end use markets, including non-commercial construction, utility, industrial, and telecommunications. Industrial and commercial construction markets are expected to improve from the lower levels of activity experienced in 2004 and 2005, partially boosted by the hurricane-related rebuilding efforts. Domestic utility markets are expected to move along with the overall economy. However, we do not anticipate any significant increase in demand for our power products in 2006 resulting from infrastructure changes in the utility industry. Residential markets are expected to slow in 2006 due in part to higher mortgage rates, although, we anticipate modest growth in this portion of our business through new product introductions and increased market share. This outlook for our markets assumes no further shocks to the economy, in particular higher energy prices, which could dampen consumer spending and business investments. In addition, commodity costs remain highly volatile, with global demand driving higher prices for copper, aluminum, zinc and nickel. We will attempt to recover higher costs in either of these areas with increases in selling prices, as has been the case throughout 2004-2005. However, excluding significant incremental pricing actions, we expect overall growth in 2006 sales versus 2005 to be in a range of 5%-7%, excluding any effects of fluctuations in foreign currency exchange rates. Sales increases compared to 2005 are expected to be led by our Electrical and Industrial Technology segments while the Power segment should experience more modest growth compared to a record year in 2005. The full year impact of our 2005 acquisitions is expected to contribute 1%-2% of these amounts. The carryover impact of previously announced price increases should comprise approximately 1% of the year-over-year sales growth.

Operating Results

      Full year 2006 operating profit margin is expected to be equal to or slightly lower compared to 2005. In 2006, the Company will record stock-based compensation cost including expensing stock options in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), “Shared-Based Payment”, (“SFAS 123(R)”). We estimate the impact of total stock-based compensation in 2006 to decrease operating profit margins by approximately one-half of a percentage point. Several key initiatives are expected to benefit operating margins including the ongoing lighting integration and rationalization program, expansion of global product sourcing initiatives, new product launches and lean process improvement projects. We expect that the pricing actions taken in 2005 as well as additional planned increases in 2006 will offset higher levels of raw material commodity costs and higher energy related costs. However, commodity and energy costs are expected to remain volatile and further increases in these costs in 2006 may not be fully offset with price increases.

      We expect to continue to integrate and streamline our operations, particularly within our lighting businesses. These actions could result in charges being recorded in 2006 related to asset write-downs, severance and other costs to consolidate operations at amounts consistent with the $11 million recorded in 2005 as special charges. Amounts actually recorded in 2006 will depend on the nature and timing of when plans are finalized and approved.

      Our business information system initiative is expected to facilitate consolidation of business support processes. We estimate total 2006 expenses related to the implementation of our SAP enterprise-wide information system, will be in a range of $8-$12 million and capitalized costs will be in a range of $6-$10 million. In addition, non-cash amortization expenses associated with capitalization will approximate $8 million.

Taxation

      We estimate the effective tax rate in 2006 will be approximately 29.5% compared with 23.5% reported in 2005. The increase is primarily due to an anticipated higher level of U.S. taxable income and the absence of a tax settlement recorded in 2005.

Earnings Per Share

      Overall, diluted earnings per share is expected to be in the range of $2.60-$2.80, including the impact of special charges and approximately $.11 per diluted share for stock-based compensation expense.

Cash Flow

      We expect to increase working capital efficiency in 2006 as a result of improvements in days supply of inventory and accounts payable days outstanding. Capital spending in 2006 is expected to be approximately $10-$20 million higher than in 2005 primarily as a result of the construction of our new lighting headquarters facility, the business system initiative and other strategic initiatives including equipment purchases. We expect total share repurchases in 2006 to approximate $70 million, however, total repurchases may vary depending upon the level of other investing activities. In February 2006, the Board of Directors approved an additional stock repurchase program and authorized the purchase of up to $100 million of the Company’s Class A and Class B common stock to be completed over a three year period. The repurchase program will be implemented upon completion of the current $60 million repurchase program announced in June 2005, which at March 1, 2006 had a remaining authorization of approximately $20 million. Free cash flow (defined as cash flow from operations less capital spending) in 2006 is expected to range from $100-$150 million.

Growth

      Our growth strategy contemplates acquisitions in our core businesses. The rate and extent to which appropriate acquisition opportunities become available, acquired companies are integrated and anticipated cost savings are achieved can affect our future results. We anticipate investing in 2006 in acquisitions at or above the level in 2005, however, actual spending may vary depending upon the timing and availability of appropriate acquisition opportunities.

RESULTS OF OPERATIONS

      Our operations are classified into three segments: Electrical, Power, and Industrial Technology. For a complete description of the Company’s segments, see Part I, Item 1. of this Annual Report on Form 10-K. Within these segments, Hubbell primarily serves customers in the commercial and residential construction, industrial, utility, and telecommunications industries.

      The table below approximates percentages of our total 2005 net sales generated by the market segments indicated.

Served Market Segments

      In 2005, we experienced significant growth in orders and sales in our Power and Industrial Technology segments due in part to the contributions from acquisitions, significant storm related shipments of utility repair and replacement products and higher selling prices. Market conditions in these segments were generally

favorable due to the strong worldwide utility demand and a good North American industrial economy. Principal markets affecting the Electrical segment were mixed. In particular, improvements in residential/ DIY and industrial markets in the U.S. were offset by lower levels of business activity in commercial construction.

Summary of Consolidated Results

2005 Compared to 2004

Net Sales

      Consolidated net sales for the year ended December 31, 2005 were $2.1 billion, an increase of 5.6% over the year ended December 31, 2004. The increase was led by our Power and Industrial Technology segments where sales increased by 18% and 17%, respectively, over amounts reported in 2004.

      The majority of the increase in net sales in 2005 versus 2004 resulted from the carryover effect of price increases implemented throughout 2004 and 2005, higher storm related shipments in the Power segment and several small acquisitions. Although underlying demand in many of our core markets improved year-over-year, continued softness in commercial construction markets, which represents our largest served market, negatively affected orders and sales particularly in the Electrical segment. We estimate that selling price increases accounted for approximately 2-3 percentage points of the year-over-year increase in sales. Refer to the table above under “Served Market Segments” for further details on how the underlying market demand can impact each segment’s revenues. Also refer to “Segment Results” within this Management’s Discussion and Analysis for more detailed information on performance by segment.

Gross Profit

      The consolidated gross profit margin for 2005 improved slightly to 28.3% compared to 28.2% in 2004. The improvement in gross profit margin is attributable to the favorable effects of higher selling prices in excess of commodity cost increases, lower product costs from strategic sourcing initiatives, productivity gains, and cost savings from our lighting integration and rationalization program. Substantially offsetting these increases versus 2004 were the negative impact of unabsorbed factory costs in certain of our manufacturing plants as a result of lower unit volumes and higher year-over-year energy prices, which have negatively impacted costs including transportation and utilities.

      In total, we estimate that price increases of approximately 2%-3% of net sales were realized to offset raw material, energy and transportation cost increases of approximately 2.5%-3.5% of sales, resulting in net unrecovered cost increases of approximately $10-$15 million. By segment, net benefits were realized in the Power and Industrial Technology segments, while the Electrical segment experienced cost increases in excess of price increases. Higher costs of certain raw materials along with higher energy and transportation costs were a major challenge in 2005 as they occurred across each of our businesses. These increases required us to increase selling prices which, particularly in our Electrical segment, were often not fully realized or required

up to 90-120 days to become effective and begin to offset the higher costs, which in many cases were immediate.

      In our lighting business, gross profit margins declined as a result of lower volume, unabsorbed factory costs and higher transportation costs partially offset by cost savings associated with our lighting integration and rationalization program. Our wiring systems business reported lower gross profit percentages in 2005 versus the prior year due to factory inefficiencies, due in part to the implementation of SAP, higher transportation and utility costs and increased costs associated with the launch of new products. Power segment gross margin improved for the year primarily due to higher volume, increased selling prices and improved factory performance. Gross profit margins in our Industrial Technology segment improved as a result of higher volume and price increases in excess of commodity cost increases.

Selling & Administrative Expenses

      Selling and administrative (S&A) expenses increased 7.2% compared to 2004. The increase is due to higher expenses associated with the SAP enterprise-wide information system, new product launches and an unusual item recorded in the first quarter of 2005. These increases were partially offset by a $4.9 million gain on sale of a building that was recorded in the fourth quarter of 2005. The SAP information systems initiative generated higher year-over-year costs primarily due to higher resource needs in support of both legacy and SAP information platforms and amortization of capitalized implementation costs. The unusual item consisted of $4.6 million, pretax, of transactional expenses in support of our strategic growth initiatives.

Special Charges

      Full year operating results in 2005, 2004 and 2003 include pretax special charges primarily related to programs approved following our acquisition of LCA in April 2002, which were undertaken to integrate and rationalize the combined lighting operations.

      The following table summarizes activity by year with respect to special charges for the three years ending December 31, 2005 (in millions):

      The integration and rationalization of our lighting operations is a multi-year initiative. Individual projects within the Program consist of factory, office and warehouse closures, personnel realignments, and costs to streamline and combine product offerings. Total costs from the start of the Program in 2002 through its

substantial completion in 2006 are expected to approximate $60 million. In addition, capital expenditures of $45-55 million are forecast, most of which have not yet been spent. State and local tax incentives are also expected to be available to offset certain of these costs. Program costs related to severance, asset impairments, and facility closures in conjunction with exit activities are generally reflected as Special charges, net within the Consolidated Statement of Income. Inventory write-downs related to exit activities are recorded as a component of Cost of goods sold. Other costs associated with the Program are recorded as Cost of goods sold or Selling & administrative expenses depending on the nature of the cost.

      The Program is comprised of three phases. Program costs by phase have been expensed as follows:

      Phase I of the Program began in 2002 soon after the LCA acquisition was completed and consisted of many individually identified actions which incurred costs totaling approximately $26 million. Phase I activities were focused on integrating the acquired operations with Hubbell’s legacy lighting operations. In accordance with applicable accounting rules, amounts were expensed either as actions were approved and announced or as costs were incurred. Reorganization actions primarily consisted of factory closures, warehouse consolidations and workforce realignment. These actions were substantially completed as of December 31, 2005.

      Phase II of the Program began in the second quarter of 2004. Many of the actions contemplated were similar to actions completed or underway from Phase I. However, these actions were increasingly focused on rationalizing the combined businesses. In the second quarter of 2004, a commercial products plant closure was announced and charges were recorded, primarily for asset impairments. In the third quarter of 2004, we announced two actions: (1) consolidation of selling, administrative and engineering support functions within the commercial lighting businesses, and (2) the selection of Greenville, South Carolina as the site for a new $40-$45 million lighting headquarters facility to be constructed over the next two years. In addition, in the 2004 fourth quarter, a further move of commercial lighting manufacturing to Mexico was approved. The cost of the office functions consolidation was substantially completed by December 31, 2005 and consisted primarily of cash expenditures for employee severance and relocation, the latter of which was included in S&A expenses as incurred. The cost of the plant consolidations is estimated at $21-$23 million, consisting of approximately $5 million of capital expenditures and $16-18 million of expense, of which approximately $18 million has been spent through December 31, 2005.

      In 2005, we announced another Phase II action consisting of the consolidation and closure of a commercial lighting leased office complex. In 2005, $1.8 million of costs were recorded, primarily related to severance, in connection with this announcement. Approximately 40 people were affected by this action, all of whom have left the Company by the end of the third quarter of 2005. Through December 31, 2005, $17.5 million of total expenses have been recorded for plant consolidations and the consolidation of support functions related to Phase II actions. In total, Phase II actions are expected to result in $23 million of expense through the end of 2006. In addition to the announced actions, primarily cash expenses are expected to be associated with further consolidation of commercial lighting manufacturing operations, as well as further office consolidations. Approximately 80-90% of the total amount expensed is expected to be associated with cash outlays. The new headquarters facility represents the largest remaining capital cost forecast to be required for these projects. Cash outlays in 2006 are expected to range from $5-$7 million, excluding capital costs of $30-$35 million.

      Phase III actions are characterized by commercial manufacturing space elimination actions. In the fourth quarter of 2005, the first Phase III action was approved related to the consolidation and relocation of administrative and engineering functions of a commercial lighting facility to South Carolina. In connection with this approval, we recorded a non-cash pension curtailment charge of approximately $1.3 million.

Approximately 100 employees are expected to be affected by this action over the next six to nine months. In 2006, an additional $8-$10 million of Phase III program costs are expected to be expensed under the Program. Cash expenditures should comprise a majority of this amount.

      In addition to the Program within the lighting business, in the second quarter of 2004, we announced the closure of a 92,000 square foot wiring device factory in Puerto Rico. Increased productivity facilitated by lean initiatives and cost savings opportunities resulting from low cost country sourcing contributed to the decision to close this leased facility. As a result, $7.2 million in special charges were recorded in 2004 in the Electrical segment of which $4.9 million related to impairments to fixed assets, $2.0 million provided for severance costs and $0.3 million related to facility exit costs. During the second quarter of 2005, the factory closed and substantially all employees left the Company. In the second quarter of 2005, we recorded an additional $0.9 million of special charges associated with this closure, of which $0.3 million related to inventory write-downs and $0.6 million related to additional facility exit costs. Only the severance and exit costs will result in a cash outlay. Annual, pretax savings from these actions are expected to be $3-$5 million when fully implemented in 2006, with the entire amount benefiting Cost of goods sold in the Electrical segment. Net benefits realized in the segment are likely to be lower and will be used to offset cost increases and other competitive pressures.

      Additional information with respect to special charges is included in Note 2 — Special Charges included in the Notes to Consolidated Financial Statements.

Operating Income

      Operating income increased 7% primarily due to the higher sales levels and $5.8 million of lower pretax special charges (including amounts charged to Cost of goods sold). Operating margins of 10.8% in 2005 were relatively flat compared to 10.7% in 2004 as a result of higher sales, improved gross profit margins and lower special charges, partially offset by higher S&A expenses.

Other Income/ Expense

      In 2005, investment income increased $3.0 million versus 2004 due to higher average cash and investment balances and higher average interest rates earned on cash and investments. Interest income in 2004 also included $1.0 million related to a tax settlement in the prior year. Interest expense was $19.3 million in 2005 compared to $20.6 million in 2004. The decrease was due to a lower level of fixed rate indebtedness in 2005 compared to 2004. In October 2005, we repaid $100 million of senior notes upon maturity. Other income (expense), net, in 2005 was $1.3 million of expense compared to $1.2 million of expense in 2004.

Income Taxes

      Our effective tax rate was 23.5% in 2005 compared to 21.6% in 2004. The 2005 consolidated effective tax rate reflected the impact of tax benefits of $10.8 million recorded in connection with the closing of an IRS examination of the Company’s 2002 and 2003 tax returns. The 2004 rate reflected the impact of tax benefits of $10.2 million recorded in connection with the closing of an IRS examination of our tax returns through 2001, which included refund claims for the years 1995 through 2000 related to research and development activities during these years. These benefits reduced the statutory tax rate by 5.1 percentage points and 5.3 percentage points in 2005 and 2004, respectively.

      We have certain operations in Puerto Rico that were eligible for U.S. tax benefits under Section 936/30A of the Internal Revenue Code. The U.S. federal tax benefits derived from our Puerto Rico operations expired on December 31, 2005. We converted our Puerto Rico operations to two wholly-owned, controlled foreign corporations and shifted more production to low cost sources. We intend to permanently reinvest the earnings from these operations outside the U.S. As permitted in APB Opinion No. 23, “Accounting for Income Taxes,” we do not provide U.S. income taxes on a controlled foreign corporation’s undistributed earnings that are intended to be permanently reinvested outside the U.S. Therefore, our effective tax rate following

expiration of these tax benefits should reflect the permanent reinvestment of these foreign earnings outside the U.S. See further information in Note 13 — Income Taxes in the Notes to Consolidated Financial Statements.

Net Income and Earnings Per Share

      Net income and diluted earnings per share in 2005 improved versus 2004 as a result of higher net sales, lower special charges and favorable other income/expense, partially offset by higher S&A expenses and an increase in the effective tax rate.

Segment Results

Electrical Segment

      Electrical segment net sales increased 1% in 2005 versus 2004 primarily as a result of higher selling prices which were partially offset by lower unit volumes. Higher selling prices were implemented and have been realized in most of the businesses within the segment in an effort to recover cost increases, primarily related to higher raw material, energy and freight costs.

      Lighting fixture sales represented in excess of 50% of total net sales reported in the Electrical segment in both 2005 and 2004. Sales of lighting fixtures declined modestly as lower shipments of commercial and industrial lighting fixtures were substantially offset by higher residential fixture sales. Residential products benefited from the continued favorable market conditions due in part to historically low mortgage interest rates and market share gains. The commercial and industrial (“C&I”) lighting businesses were negatively impacted by lower levels of construction projects in the U.S. which have intensified competitiveness and made price realization difficult.

      Wiring system sales were level with sales reported in the comparable prior year period as stronger industrial market demand was offset by weak commercial markets. Wiring systems sales are believed to be below the levels of improvement in the underlying markets served by this business due in part to lower order input levels and inefficiencies associated with the closure of a factory, outsourcing and the business system implementation.

      Rough-in electrical sales increased mainly as a result of higher selling prices, partially offset by lower volume due to weak commercial markets. Sales of harsh and hazardous products increased year-over-year by double digits primarily due to higher oil and gas project shipments related to strong market conditions worldwide.

      Operating margin in the segment was lower in 2005 versus 2004 primarily due to unabsorbed costs in our manufacturing facilities resulting from lower unit volumes, as well as higher commodity raw material, freight and utility costs which were not fully offset by selling price increases. As part of our lighting integration and rationalization program, we were engaged in plant relocations that have temporarily added costs and lowered factory efficiencies. In addition, operating margins in our wiring systems business were negatively affected year-over-year versus 2004 by higher costs and training and processing inefficiencies associated with the implementation of the SAP business system as well as a factory closure. Wiring systems also incurred higher than normal costs associated with new product programs. Harsh and hazardous margins were higher year-over-year, consistent with increases in sales, due to higher order input levels and a better mix of sales. Overall, the segment incurred higher S&A expenses year-over-year due to new product initiatives, office consolidations and higher SAP amortization charges, partially offset by a $4.9 million pretax gain on sale of a

building. Special charges in 2005 were lower by $5.8 million compared with 2004. See discussions above under “Special Charges”.

Power Segment

      Power segment net sales increased 18% in 2005 versus the prior year due to the carryover effect of price increases, the addition of two acquisitions and higher storm-related shipments. Price increases were implemented across most product lines throughout 2004 and into 2005 where costs have risen due to increased metal and energy costs. We estimate that price increases accounted for approximately one-third of the year-over-year sales increase. Two acquisitions accounted for approximately 5 percentage points of the year-over-year increase and incremental storm-related shipments comprised another 3 percentage points of the improvement.

      Operating margins improved in 2005 versus 2004 as a result of the increase in volume, an improved mix of higher margin products, productivity improvements including strategic sourcing and lean programs and selling price increases realized above the comparable level of cost increases.

Industrial Technology Segment

      Industrial Technology segment net sales increased 17% in 2005 versus 2004 as many of the businesses within this segment benefited from strong oil and gas markets and improvement in industrial market activity as evidenced by rising capacity utilization rates. This segment’s technology-oriented high voltage test equipment increased year-over-year sales by double-digits. In addition, we acquired two businesses which accounted for approximately 5 percentage points of the segment sales increase. Operating income and margins for the full year 2005 improved versus 2004 primarily as a result of increased volume, productivity improvements and a more favorable product mix. Acquisitions had only a modest impact on the year-over-year profitability improvement in the segment as a result of costs incurred to integrate the acquired operations into existing segment facilities.

2004 Compared to 2003

Net Sales

      Consolidated net sales for the year ended December 31, 2004 were $1,993.0 million, an increase of 13% over the year ended December 31, 2003. All segments contributed to the increase, led by our Electrical and Power segments where sales increased by 12% and 16%, respectively, over amounts reported in 2003.

      The increase in net sales in 2004 versus 2003 was primarily the result of improved market conditions within each of our business segments. With the exception of non-residential construction markets, higher end user demand was experienced consistently throughout 2004 and benefited many of our businesses serving industrial, residential and utility markets. In addition, 1%-2% of the year-over-year increase in sales was due to increases in selling prices which were implemented throughout 2004 as a result of rapid increases in the cost of many commodity raw materials which go into our products including steel, aluminum, copper and bronze. Refer to the table “Served Market Segments” under “Results of Operations” within this Management’s

Discussion and Analysis for further details on the extent to which changes in underlying market demand can impact each segment’s revenues.

Gross Profit

      The consolidated gross profit margin for 2004 improved by 100 basis points to 28.2% compared to 27.2% in 2003. The improvement in gross profit margin was attributable to increased sales volume in 2004 compared to 2003, productivity improvements as a result of lean initiatives and streamlining programs and an improvement in sales mix. However, these gains were partially offset by the net impact of higher raw material commodity costs in excess of realized selling price increases and higher freight and energy costs.

      In total, we estimate that price increases of approximately 1%-2% of net sales were realized to offset raw material commodity cost increases of approximately 2%-3% of sales, resulting in a net shortfall of cost increases versus costs recovered of approximately 1% of net sales or $15-$20 million, split approximately evenly between the Electrical and Power segments. Raw material cost increases were a major management challenge in 2004 as they occurred at frequent intervals across each of our businesses which have products comprised of basic metals. These increases required us to increase selling prices which, due to the competitive nature of our served markets, were often not fully realized or required up to 90-120 days to become effective and begin to offset the higher costs, which in many cases were immediate.

      In our lighting fixtures business, gross profit margins improved as a result of higher volume and cost savings associated with the lighting integration program, partially offset by increased commodity costs. Our wiring systems and electrical products businesses reported increased gross profit percentages in 2004 versus 2003 due to a more favorable product sales mix and productivity improvements. Power segment gross margin improved in 2004 despite unprecedented increases in commodity costs primarily due to higher volume, increased selling prices and improved factory performance. Gross profit margins in our Industrial Technology segment improved as a result of a more favorable industrial product mix as well as a return to profitability in our high voltage businesses. A pretax gain on sale of a warehouse in the Electrical segment of $1.5 million in 2004 compares with a $1.6 million favorable legal settlement in 2003 in the Power segment.

Selling & Administrative Expenses

      S&A expenses were 16.8% of net sales in 2004 compared with 17.2% in 2003. The decrease in S&A expenses as a percentage of sales reflects the leveraging of fixed costs on higher sales and a reduction in customer accounts receivable allowances associated with improved credit quality of certain customers in the Electrical segment. These declines were partially offset by approximately $7 million of increased expenses related to our business system initiative, and higher employee benefits and public company compliance costs.

Special Charges

      See separate discussion under “2005 Compared to 2004” within this Management’s Discussion and Analysis.

Operating Income

      Operating income increased 24% primarily due to the higher sales levels, offset by $8.6 million of higher pretax special charges (including amounts charged to Cost of goods sold). Operating margins improved by one percentage point due to higher sales, improved gross profit margins and lower S&A expenses as a percentage of sales.

Other Income/ Expense

      In 2004, investment income increased $2.8 million versus 2003 due to higher average cash and investment balances and higher average interest rates received on cash and investments. A tax settlement resulted in interest income of $1.0 million. Interest expense was virtually unchanged in 2004 compared to 2003 as a result of a comparable amount of fixed rate indebtedness. The weighted-average interest rate applicable to

total debt outstanding during 2004 and 2003 was 6.5%. Other income (expense), net, in 2004 was $1.2 million of expense compared to $0.5 million of income in 2003. The reduction was primarily due to higher foreign currency transaction losses in 2004 as compared to 2003.

Income Taxes

      Our effective tax rate was 21.6% in 2004 compared to 26% in 2003. The 2004 rate reflected the impact of tax benefits of $10.2 million recorded in connection with the closing of an IRS examination of our tax returns through 2001, which included refund claims for the years 1995 through 2000 related to research and development activities during these years. Excluding the impact of the tax benefit, the effective tax rate was higher in 2004 versus 2003 as a result of having higher U.S.-based income in 2004 at comparably higher tax rates.

Net Income and Earnings Per Share

      Net income and diluted earnings per share in 2004 improved versus 2003 as a result of higher net sales, increased gross profit margins and a lower tax rate, partially offset by increased special charges, higher S&A expenses and an increase in the number of average shares outstanding. The following items affect the comparability of 2004 and 2003 net income and earnings per share (after tax, in millions):

Segment Results

Electrical Segment

      Electrical segment net sales increased 12% in 2004 versus 2003 as a result of improved market conditions, a modest gain in market share and higher average selling prices. We estimate increases in selling prices contributed approximately 1%-2% to the increase in sales in 2004 versus 2003. Lighting fixture sales represented in excess of 50% of total net sales reported in the Electrical segment in both 2004 and 2003.

      By business unit, sales of lighting fixtures increased by double digits with the growth fairly evenly split between residential and C&I application products. These results reflect a strong housing market, share gain in residential and commercial application products and higher sales resulting from customer orders placed in advance of selling price increases in the fourth quarter.

      Wiring system sales improved near double digits year-over-year reflecting strong sales of commercial and industrial application wiring device products due to increased end user demand for industrial maintenance, repair and operations products. Rough-in electrical sales increased as a result of strong retail channel sales, new product sales, higher selling prices and modest share of market gains in electrical outlet box sales. Harsh and hazardous sales grew in markets outside the U.S. due to higher oil and gas project shipments and favorable foreign currency exchange rates.

      Operating margin improvement was primarily due to higher gross profit margins driven by higher sales and a favorable mix of higher margin products. Lower product costs resulting from product outsourcing, profitability improvements in connection with our lean initiatives and realized savings from the lighting integration program also contributed to operating margin improvements. Margin improvement occurred in all major product categories within the segment and was particularly strong in wiring devices, commercial lighting fixtures, electrical products and harsh and hazardous businesses where we experienced sales increases in more

profitable product categories along with improved factory performance. The segment also benefited from a $1.5 million pretax gain on sale of a warehouse. These margin improvements were partially offset by commodity costs increases in excess of higher selling prices, and higher special charges. Within S&A, increased spending in connection with the information system initiative was partially offset by a reduction of accounts receivable allowances as a result of the improved financial condition and credit quality of previously reserved customer accounts.

Power Segment

      Power segment net sales increased 16% in 2004 versus the prior year as a result of increased spending by domestic utility accounts, price increases and increased hurricane and storm related shipments. Price increases were implemented across all product lines where costs rose due to increased metal and energy costs. We estimate that price increases accounted for approximately 3 percentage points of the year-over-year sales increase with increased storm-related shipments comprising another one percentage point of the improvement. Segment operating income increased year-over-year as a result of higher sales, a favorable mix of higher margin products and improved factory performance as a result of our lean initiatives, partially offset by a significant escalation in commodity raw material costs. The commodity cost increases, primarily steel, aluminum, copper and zinc, outpaced our actions to increase selling prices. We estimate that the negative impact in 2004 of cost increases in excess of pricing actions was $6-$8 million for this segment. In addition, segment operating income in 2003 reflected the benefit of a pretax legal settlement of $1.6 million for a patent infringement case.

Industrial Technology Segment

      Industrial Technology segment net sales increased 4% versus 2003 as a result of increased demand for products in heavy industry including industrial controls, reels and other cable management products. These businesses benefited from the improvement in industrial activity and increased capital spending facilitated by higher steel and other metals costs, which benefits many of the customers served by this segment. Operating margins for the full year 2004 improved versus 2003 primarily as a result of a more favorable industrial product mix as well as elimination of losses in our high voltage test and instrumentation businesses as a result of cost reductions.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

      Cash provided by operating activities in 2005 of $184.1 million equalled cash provided by operating activities in 2004. Significant changes in elements of operating cash flow year-over-year include accounts receivable balances which increased $16.9 million in 2005 compared to an increase of $61.5 million in 2004 resulting in a lower use of cash in 2005. Partially offsetting the change in accounts receivable was lower cash provided by increases in current liabilities and accounts payable as a result of lower levels of growth in the business in 2005 compared to growth levels in 2004. Current liability balances in 2005 were impacted by higher disbursements primarily related to customer incentives, employee incentive compensation levels and the timing of tax payments year-over-year. We made cash contributions of approximately $28 million and $25 million to our domestic, qualified, defined benefit pension plans in 2005 and 2004, respectively. Information regarding our pension plans is included in Note 11 — Retirement Benefits in the Notes to Consolidated Financial Statements. Included in Other, net within cash provided by operating activities are income tax benefits from employee exercises of stock options of $7.8 million in 2005 and $6.7 million in 2004.

      Cash flows from investing activities include capital expenditures of $73.4 million in 2005 compared to $39.1 million in 2004. The $34.3 million increase is attributed to higher expenditures of $17.6 million for investments in new equipment and facility improvements, $10.1 million of higher cash expenditures for software, primarily related to the enterprise-wide business system and $6.6 million of expenditures related to the construction of a new lighting headquarters. Cash outlays to acquire new businesses amounted to $54.3 million in 2005. Purchases and maturities/sales of investments provided net cash proceeds of $81.1 million in 2005 compared to net cash outlays of $86.0 million in 2004. Proceeds from disposition of assets increased to $14.6 million in 2005 compared to $10.7 million in 2004. Included in Other, net within cash flows from investing activities are proceeds related to company owned life insurance of $2.1 million and $2.9 million in 2005 and 2004, respectively, and proceeds from the sale of investment properties of $0.2 million and $1.7 million in 2005 and 2004, respectively.

      Financing cash flows used $182.1 million of cash in 2005 compared to $55.6 million of cash in 2004. Cash used in 2005 reflects the repayment of $100.0 million of senior notes at maturity. Proceeds from borrowings of other short-term debt totaled $29.6 million in 2005. Cash outlays to pay dividends in 2005 and 2004 totaled $80.6 million and $79.9 million, respectively. Cash generated as a result of stock options exercised totaled $32.8 million in 2005 compared to $30.5 million in 2004. We repurchased $62.7 million and $6.2 million of common stock in 2005 and 2004, respectively, under our stock repurchase programs.

Working Capital

      Working capital decreased $23.5 million, or 4.9%, in 2005 compared to 2004. The decrease is primarily due to a decrease in cash and cash equivalents and short-term investments in 2005 compared to 2004. In 2005, a total of $54.3 million was used to acquire five new businesses. In addition, $62.7 million was used to repurchase common shares in 2005 compared to $6.2 million in 2004. Working capital initiatives which emphasize improved inventory management, faster collections of accounts receivable and negotiation of more favorable supplier payment terms are in place at all of our business units. Improving working capital efficiency, primarily related to inventory and accounts payable, will continue to be a primary focus for management in 2006.

Investments in the Business

      We define investments in our business to include both normal expenditures required to maintain the operations of our equipment and facilities as well as expenditures in support of our strategic initiatives.

      During 2005, capital expenditures were $73.4 million. Additions to property, plant, and equipment were $51.7 million in 2005 compared to $27.5 million in 2004 as a result increased investments made in new equipment and facility improvements. Higher expenditures were also incurred related to the construction of the lighting headquarters and facility expansion in our factory in Mexico. In 2005, we capitalized $20.5 million of software, primarily in connection with our business information system initiative (recorded in Intangible assets and other in the Consolidated Balance Sheet).

      In 2005, we acquired five businesses for a total of $54.3 million. These businesses are expected to provide approximately $50 million of annual net sales of which approximately 45% will be added to each of our Industrial Technology and Power segments, with approximately 10% added to our Electrical segment. Although not significant to our consolidated results, these acquisitions are part of our core markets growth strategy.

      We continue to invest in process improvement through our lean initiatives. Although we have just completed our fourth year of the lean journey, we still consider ourselves in the early part of this initiative. We expect benefits from this investment will improve our operating results primarily through increased productivity.

      In 2003 our Board of Directors approved a stock repurchase program and authorized the repurchase of up to $60.0 million of our Class A and Class B common stock. As of September 30, 2005 purchases under this program were completed. In June 2005 our Board of Directors approved a new stock repurchase program which authorized the repurchase of an additional $60 million of the Company’s Class A and Class B common stock. Stock repurchases are being implemented through open market and privately negotiated transactions. The timing of such transactions depends on a variety of factors, including market conditions. In 2005, we spent a total of $62.7 million on the repurchase of common shares compared to $6.2 million spent on the repurchase of common shares in 2004. Additional information with respect to share repurchases is included in Part II, Item 5 of this Annual Report on Form 10-K.

      Additional information with respect to future investments in the business can be found under “Outlook” within Management’s Discussion and Analysis.

Capital Structure

      Net debt as disclosed below is a non-GAAP measure that may not be comparable to definitions used by other companies. We consider Net debt to be more appropriate than Total Debt for measuring our financial leverage as it better measures our ability to meet our funding needs.

      As of December 31, 2005, the debt to capital ratio decreased to 19% from 24% as of December 31, 2004 primarily due to lower outstanding debt as a result of a $100 million repayment of senior notes.

      At December 31, 2005, Short-term and current portion of long-term debt in our Consolidated Balance Sheet consisted of a $7.5 million money market loan, $22.0 million of borrowings against our credit facility and $0.1 million of other borrowings. The money market loan represents a line of credit to borrow up to 5.0 million pounds sterling (U.S. $ equivalent at December 31, 2005 was $8.8 million) and was entered into by our UK subsidiary in order to fund a portion of the purchase price of a new business. The loan provides for an interest rate of one-half of a percentage point above the London Interbank Offered Rate (“LIBOR”). The loan is due within one year. Borrowings of $22.0 million were drawn against our $200 million credit facility and used along with available cash to repatriate foreign earnings from one of our foreign subsidiaries under the provisions of the American Jobs Creation Act of 2004.

      At December 31, 2004, Short-term and current portion of long-term debt in our Consolidated Balance Sheet consisted of $100 million, excluding unamortized discount, of senior notes with a maturity date of October 2005. The $100 million of senior notes was repaid on October 1, 2005. At December 31, 2005 and 2004, Long-term debt in our Consolidated Balance Sheet consisted of $200 million, excluding unamortized discount, of senior notes with a maturity date of 2012. These notes are fixed rate indebtedness, are not callable and are only subject to accelerated payment prior to maturity if we fail to meet certain non-financial covenants, all of which were met at December 31, 2005 and 2004. The most restrictive of these covenants limits our ability to enter into mortgages and sale-leasebacks of property having a net book value in excess of $5 million without the approval of the Note holders. In 2002, prior to the issuance of the $200 million notes, we entered into a forward interest rate lock to hedge our exposure to fluctuations in treasury interest rates, which resulted in a loss of $1.3 million in 2002. This amount was recorded in Accumulated other comprehensive income (loss) and is being amortized over the life of the notes.

      At December 31, 2005, we had $178 million of available borrowings under our $200 million committed bank credit facility. This credit facility was amended during the year to admit a wholly-owned foreign subsidiary as a borrower and will expire in October 2009. This credit facility also serves as a back up to our commercial paper program. Borrowings under this credit agreement generally are available with an interest rate equal to the prime rate or at a spread over LIBOR. Annual commitment fee requirements to support availability of the credit facility total approximately $0.2 million.

      Although not the principal source of our liquidity, we believe these facilities are capable of providing adequate financing at reasonable rates of interest. However, a significant deterioration in results of operations or cash flows, leading to deterioration in financial condition, could either increase our future borrowing costs or restrict our ability to sell commercial paper in the open market. We have not entered into any other guarantees, commitments or obligations that could give rise to unexpected cash requirements.

Liquidity

      We measure our liquidity on the basis of our ability to meet short-term and long-term operational funding needs, fund additional investments, including acquisitions, and make dividend payments to shareholders. Significant factors affecting the management of liquidity are the level of cash flows from operating activities, capital expenditures, access to bank lines of credit and our ability to attract long-term capital with satisfactory terms.

      Normal internal cash generation from operations together with currently available cash and investments, available borrowing facilities, and an ability to access credit lines, if needed, are expected to be more than sufficient to fund operations, the current rate of dividends, capital expenditures, stock repurchases and any increase in working capital that would be required to accommodate a higher level of business activity. We actively seek to expand by acquisition as well as through the growth of our present businesses. While a significant acquisition may require additional borrowings, we believe we would be able to obtain financing based on our favorable historical earnings performance and strong financial position.

Pension Funding Status

      We have a number of funded and unfunded non-contributory U.S. and foreign defined benefit pension plans. Benefits under these plans are generally provided based on either years of service and final average pay or a specified dollar amount per year of service. Effective January 1, 2004, the defined benefit pension plan for U.S. salaried and non-collectively bargained hourly employees was closed to employees hired on or after January 1, 2004. Effective January 1, 2006, the defined benefit pension plan for the Hubbell Canada salaried employees was closed to existing employees who did not meet certain age and service requirements as well as all new employees hired on or after January 1, 2006. These U.S. and Canadian employees are instead eligible for defined contribution plans.

      The funded status of our qualified, defined benefit pension plans is dependant upon many factors including future returns on invested pension assets, the level of market interest rates, employee earnings and employee demographics. Changes in the value of the defined benefit plan assets and liabilities will affect the amount of pension expense ultimately recognized. Differences between actuarial assumptions and actual results are deferred as unrecognized gains and losses. Unrecognized gains and losses in excess of an annual calculated minimum amount (the greater of 10% of the projected benefit obligation or 10% of the market value of assets) are amortized and recognized in net periodic pension cost over our average remaining service period of active employees which approximates 13-15 years. At December 31, 2005 the total unrecognized actuarial loss for our defined benefit pension plans was $99.7 million, which is primarily a result of using a lower discount rate in the calculation of plan liabilities in each of the proceeding four years. During this period, the rate has declined from 7.25% at December 31, 2001 to 5.45% at December 31, 2005. During 2005, we recorded $2.3 million of pension expense related to the amortization of these unrecognized losses. We expect to record a similar amount of expense related to unrecognized losses in 2006.

      The actual return on our pension assets in the current year as well as the cumulative return over the past five and ten year periods has exceeded our expected return for the same periods. Offsetting these favorable

returns has been a decline in long-term interest rates and a resulting increase in our pension liabilities. These declines in long-term interest rates have had a negative impact on the funded status of the plans. Consequently, we contributed $25 million in each of the years 2002, 2003, and 2004 and $28 million in 2005 to our domestic, defined benefit pension plans. Additional contributions have also been made to our foreign defined benefit plans. These contributions along with favorable investment performance of the plan assets have improved the funded status of the plans. In 2006 we anticipate that we will make a contribution to our domestic qualified defined benefit plans of between $15 — $20 million and between $5 — $7 million to our foreign plans. This level of funding is not expected to have any significant impact on our overall liquidity.

Assumptions

      The following assumptions were used to determine projected pension and other benefit obligations at the measurement date and the net periodic benefit costs for the year:

      At the end of each year, we estimate the expected long-term rate of return on pension plan assets based on the strategic asset allocation for our plans. In making this determination, we utilized expected rates of return for each asset class based upon current market conditions and expected risk premiums for each asset class. A one percentage point change in the expected long-term rate of return on pension fund assets would have an impact of approximately $4.8 million on 2006 pretax pension expense. The expected long-term rate of return on pension fund assets is applied to the fair market value of pension fund assets to produce the expected return on fund assets that is included in pension expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset gains (losses) ultimately affects future pension expense through the amortization of gains (losses).

      At the end of each year, we determine the discount rate to be used to calculate the present value of pension plan liabilities. The discount rate is an estimate of the current interest rate at which the pension plan’s liabilities could effectively be settled. In estimating this rate, we look to rates of return on high-quality, fixed-income investments with maturities that closely match the expected funding period of our pension liability. The discount rate of 5.50% which we used to determine the projected benefit obligation for our U.S. pension plans at December 31, 2005 was determined using the Citigroup Pension Discount Curve applied to our expected annual future pension benefit payments. In prior years, we used the Moody’s Aa Corporate bond rate to determine our discount rate. We believe that using the Citigroup Pension Discount Curve produces a more precise estimate of pension liabilities. An increase of one percentage point in the discount rate would lower 2006 pretax pension expense by approximately $3.4 million. A discount rate decline of one percentage point would increase pretax pension expense by approximately $7.9 million.

      Our shareholders’ equity is impacted by a variety of factors, including those items that are not reported in earnings but are reported directly in equity. In 2002, we recorded a $12.4 million after-tax charge to equity, reflecting the increase in the pension plan additional minimum liability. In 2003 and 2004, we recorded reductions of $8.3 million and $2.2 million, respectively, of the after-tax charge to equity, reflecting a reduction of the pension plan additional minimum liability. In 2005, we increased this after-tax charge by $2.2 million.

Other Post Employment Benefits

      We had health care and life insurance benefit plans covering eligible employees who reached retirement age while working for the Company. These benefits were discontinued in 1991 for substantially all future retirees with the exception of certain operations in our Power segment which still maintain a limited retiree medical plan for their union employees. These plans are not funded and, therefore, no assumed rate of return on assets is required. The discount rate of 5.50% used to determine the projected benefit obligation at December 31, 2005 was based upon the Citigroup Pension Discount Curve as applied to our projected annual benefit payments for these plans. The unrecognized loss for these plans was $11.6 million at December 31, 2005.

Off-Balance Sheet Arrangements

      Off-balance sheet arrangements are defined as any transaction, agreement or other contractual arrangement to which an entity that is not included in our consolidated results is a party, under which we, whether or not a party to the arrangement, have, or in the future may have: (1) an obligation under a direct or indirect guarantee or similar arrangement (2) a retained or contingent interest in assets or (3) an obligation or liability, including a contingent obligation or liability, to the extent that it is not fully reflected in the financial statements.

      We do not have any off-balance sheet arrangements as defined above which have or are likely to have a material effect on financial condition, results of operations or cash flows.

Contractual Obligations

      A summary of our contractual obligations and commitments at December 31, 2005 is as follows (in millions):

      Our purchase obligations include amounts committed under legally enforceable contracts or purchase orders for goods and services with defined terms as to price, quantity, delivery and termination liability. These obligations primarily consist of inventory purchases made in the normal course of business to meet operational requirements, contracts for the construction of the lighting headquarters, consulting arrangements and commitments for equipment purchases. Other long-term liabilities reflected in our consolidated balance sheet at December 31, 2005 have been excluded from the table above and primarily consist of costs associated with retirement benefits. See Note 11 — Retirement Benefits in the Notes to Consolidated Financial Statements for estimates of future benefit payments under our benefit plans.

Critical Accounting Policies

      Note 1 of the Notes to Consolidated Financial Statements describes the significant accounting policies used in the preparation of our financial statements.

Use of Estimates

      We are required to make estimates and judgments in the preparation of our financial statements. These estimates and judgments affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in estimates and assumptions used by us could have a significant impact on our financial results. We believe that the following are among our most significant accounting policies. These policies utilize estimates about the effect of matters that are inherently uncertain and therefore are based on our judgment.

Revenue Recognition

      We recognize revenue in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and the SEC revisions in SEC Staff Accounting Bulletin No. 104. Revenue is recognized when title to goods and risk of loss have passed to the customer, there is persuasive evidence of a purchase arrangement, delivery has occurred or services rendered and the price is determinable and collectibility reasonably assured. Revenue is typically recognized at the time of shipment. Sales are recorded net of estimated product returns, customer rebates and price discounts. Refer also to Customer Credit and Collections below. Also See Note 1 — Significant Accounting Policies of the Notes to Consolidated Financial Statements.

Inventory Valuation

      We routinely evaluate the carrying value of our inventories to ensure they are carried at the lower of cost or market value. Such evaluation is based on our judgment and use of estimates, including sales forecasts, gross margins for particular product groupings, planned dispositions of product lines, technological events and trends and overall industry trends. In addition, the evaluation is based on changes in inventory management practices which may influence the timing of exiting products and method of disposing of excess inventory.

      Excess inventory is generally identified by comparing future expected inventory usage to actual on-hand quantities. Reserves are provided for on-hand inventory in excess of pre-defined usage forecasts. Forecast usage is primarily determined by projecting historical (actual) sales and inventory usage levels forward to future periods. Application of this reserve methodology can have the effect of increasing reserves during periods of declining demand and, conversely, reducing reserve requirements during periods of accelerating demand. This reserve methodology is applied based upon a current stratification of inventory, whether by commodity type, product family, part number, stock keeping unit, etc. As a result of our lean process improvement initiatives, we continue to develop improved information concerning demand patterns for inventory consumption. This improved information is introduced into the excess inventory reserve calculation as it becomes available and may impact required levels of reserves.

Customer Credit and Collections

      We maintain allowances for doubtful accounts receivable in order to reflect the potential uncollectibility of receivables related to purchases of products on open credit. If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, we may be required to record additional allowances for doubtful accounts. Further, certain of our businesses account for sales discounts and allowances based on sales volumes, specific programs and customer deductions and debits, as is customary in electrical products markets. These items primarily relate to sales volume incentives, special pricing allowances, and returned goods. This requires us to estimate at the time of sale the value of shipments that should not be recorded as revenue equal to the amount which is not expected to be collected in cash from customers. We rely on specific customer agreements, historical experience and known future trends to estimate these amounts at the time of shipment.

Capitalized Computer Software Costs

      We capitalize certain costs of internally developed software in accordance with Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Capitalized costs include purchased materials and services and payroll and payroll related costs. General and administrative, overhead, maintenance and training costs, as well as the cost of software that does not add functionality to the existing system, are expensed as incurred. The cost of internally developed software is amortized on a straight-line basis over appropriate periods, generally five years. The unamortized balance of internally developed software is included in Intangible assets and other in the Consolidated Balance Sheet.

Employee Benefits Costs and Funding

      We sponsor domestic and foreign defined benefit pension, defined contribution and other postretirement plans. Major assumptions used in the accounting for these employee benefit plans include the discount rate, expected return on the pension fund assets, rate of increase in employee compensation levels and health care cost increase projections. These assumptions are determined based on company data and appropriate market indicators, and are evaluated each year as of the plans’ measurement date. Further discussion on the assumptions used in 2004 and 2005 are included above under “Pension Funding Status” and in Note 11 — Retirement Benefits in the Notes to Consolidated Financial Statements.

Taxes

      We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes” which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The factors used to assess the likelihood of realization of deferred tax assets are the forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. Failure to achieve forecasted taxable income can affect the ultimate realization of net deferred tax assets.

      In addition, we operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. The IRS and other tax authorities routinely review our tax returns. These audits can involve complex issues, which may require an extended period of time to resolve. The impact of these examinations on our liability for income taxes cannot be presently determined. In management’s opinion, adequate provision has been made for potential adjustments arising from these examinations.

Contingent Liabilities

      We are subject to proceedings, lawsuits, and other claims or uncertainties related to environmental, legal, product and other matters. We routinely assess the likelihood of an adverse judgment or outcome to these matters, as well as the range of potential losses. A determination of the reserves required, if any, is made after careful analysis, including consultations with outside advisors, where applicable. The required reserves may change in the future due to new developments.

Valuation of Long-Lived Assets

      Our long-lived assets include land, buildings, equipment, molds and dies, software, goodwill and other intangible assets. Long-lived assets, other than goodwill and indefinite-lived intangibles, are depreciated over their estimated useful lives. We review depreciable long-lived assets for impairment to assess recoverability from future operations using undiscounted cash flows. For these assets, no impairment charges were recorded in 2005 or 2004, except for certain assets affected by the lighting integration program, and within wiring systems as a result of our decision to exit a leased facility as discussed under “Special Charges” within this Management’s Discussion and Analysis.

      Goodwill and indefinite-lived intangible assets are reviewed annually for impairment unless circumstances dictate the need for more frequent assessment under the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”. The identification and measurement of impairment of goodwill involves the estimation of the fair value of reporting units. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment, which primarily incorporate our assumptions about discounted expected future cash flows. Future cash flows can be affected by changes in industry or market conditions or the rate and extent to which anticipated synergies or cost savings are realized from newly acquired entities. The identification and measurement of impairment of indefinite-lived intangible assets involves testing which compares carrying values of assets to the estimated fair values of assets. When appropriate, the carrying value of assets will be reduced to estimated fair values.

Forward-Looking Statements

      Some of the information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, and elsewhere in this Form 10-K and in the Annual Report attached hereto, which does not constitute part of this Form 10-K, contain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. These include statements about capital resources, performance and results of operations and are based on our reasonable current expectations. In addition, all statements regarding anticipated growth or improvement in operating results, anticipated market conditions, and economic recovery are forward looking. Forward-looking statements may be identified by the use of words, such as “believe”, “expect”, “anticipate”, “intend”, “depend”, “should”, “plan”, “estimated”, “could”, “may”, “subject to”, “continues”, “growing”, “prospective”, “forecast”, “projected”, “purport”, “might”, “if”, “contemplate”, “potential”, “pending,” “target”, “goals”, “scheduled”, “will likely be”, and similar words and phrases. Discussions of strategies, plans or intentions often contain forward-looking statements. Factors, among others, that could cause our actual results and future actions to differ materially from those described in forward-looking statements include, but are not limited to:

      Any such forward-looking statements are not guarantees of future performances and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements. The Company disclaims any duty to update any forward-looking statement, all of which are expressly qualified by the foregoing, other than as required by law.

      In the operation of our business, we have various exposures to areas of risk related to factors within and outside the control of management. Significant areas of risk and our strategies to manage the exposure are discussed below.

      We manufacture our products in the United States, Canada, Switzerland, Puerto Rico, Mexico, Italy, the United Kingdom and Brazil and sell products in those markets as well as through sales offices in Singapore, the People’s Republic of China, Mexico, Hong Kong, South Korea and the Middle East. International shipments from non-U.S. subsidiaries were 11% of the Company’s total net sales in 2005 and 10% in 2004 and 2003. The Canadian market represents 42%, United Kingdom 33%, Switzerland 10%, Mexico 9%, and all other areas 6% of total 2005 international sales. As such, our operating results could be affected by changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we sell our products. To manage this exposure, we closely monitor the working capital requirements of our international units and to the extent possible maintain their monetary assets in U.S. dollar instruments. In 2005, we entered into a series of forward exchange contracts on behalf of our Canadian operation to purchase U.S. dollars in order to hedge part of their exposure to fluctuating rates of exchange on anticipated inventory purchases. As of

December 31, 2005 we had six outstanding contracts for $1 million each, which expire ratably through June 2006.

      Product purchases representing approximately 10% of our net sales are sourced from unaffiliated suppliers located outside the United States, primarily in China and other Asian countries, Europe and Mexico. We are actively seeking to expand this activity, particularly related to purchases from low cost areas of the world. Foreign sourcing of products may result in unexpected fluctuations in product cost or increased risk of business interruption due to lack of product or component availability due to any one of the following:

      We have developed plans that address some of these risks. Such actions include careful selection of products to be outsourced and the suppliers selected; ensuring multiple sources of supply; limiting concentrations of activity by port, broker, freight forwarder, etc, and; maintaining control over operations, technologies and manufacturing deemed to provide competitive advantage.

      Many of our businesses have a dependency on certain basic raw materials needed to produce their products including steel, brass, copper, aluminum, bronze, plastics, phenols, zinc, nickel, elastomers and petrochemicals as well as purchased electrical and electronic components. Our financial results could be affected by the availability and changes in prices of these materials and components. Certain of these materials are sourced from a limited number of suppliers. These materials are also key source materials for many other companies in our industry and within the universe of industrial manufacturers in general. As such, in periods of rising demand for these materials, we may experience both (1) increased costs and (2) limited supply. These conditions can potentially result in our inability to acquire these key materials on a timely basis to produce our products and satisfy our incoming sales orders. Similarly, the cost of these materials can rise suddenly and result in materially higher costs of producing our products. We believe we have adequate primary and secondary sources of supply of each of our key materials and that, in periods of rising prices, we are able to recover a majority of the increased cost in the form of higher selling prices. However, recoveries typically lag the effect of cost increases due to the nature of our markets.

      Our financial results are subject to interest rate fluctuations to the extent that there is a difference between the amount of our interest-earning assets and the amount of interest-bearing liabilities. The principal objective of our investment management activities is to maximize net investment income while maintaining acceptable levels of interest rate and liquidity risk and facilitating our funding needs. As part of our investment management strategy, we may use derivative financial products such as interest rate hedges and interest rate swaps. Refer to further discussion under “Capital Structure” within this Management’s Discussion and Analysis.

      From time to time or when required, we issue commercial paper, which exposes us to changes in interest rates. Our cash position includes amounts denominated in foreign currencies. We manage our worldwide cash requirements by considering available funds held by our subsidiaries and the cost effectiveness with which these funds can be accessed.

      We continually evaluate risk retention and insurance levels for product liability, property damage and other potential exposures to risk. We devote significant effort to maintaining and improving safety and internal control programs, which are intended to reduce our exposure to certain risks. We determine the level of insurance coverage and the likelihood of a loss and believe that the current levels of risk retention are consistent with those of comparable companies in the industries in which we operate. There can be no assurance that we will not incur losses beyond the limits of our insurance. However, our liquidity, financial position and profitability are not expected to be materially affected by the levels of risk retention that we accept.

      The following table presents cost information related to interest risk sensitive instruments by maturity at December 31, 2005 (dollars in millions):