Cooper Companies (COO)

Provision for Income Taxes

We recorded tax expense of $11.6 million in the fiscal first half of 2009 compared to $7.3 million in the fiscal first half of 2008. Cooper’s effective tax rate (ETR) (provision for income taxes divided by pretax income) for the fiscal first half of 2009 was 19.3%. GAAP requires that the projected fiscal year ETR, plus any discrete items, be included in the year-to-date results. The ETR used to record the provision for income taxes for the six-month period ended April 30, 2008, was 28.8%.

Provision for Income Taxes

We recorded tax expense of $5.6 million in the first quarter of fiscal 2009 compared to $2.6 million in the first quarter of fiscal 2008. Cooper’s effective tax rate (ETR) (provision for income taxes divided by pretax income) for the first quarter of fiscal 2009 was 19 percent. GAAP requires that the projected fiscal year ETR, plus any discrete items, be included in the year-to-date results. The ETR used to record the provision for income taxes for the three-month period ended January 31, 2008, was 27.5 percent.

Provision for Income Taxes

We recorded tax expense of $10.7 million for fiscal year 2008 compared to $11.9 million for fiscal year 2007. Our geographic mix of income changed during 2008, with a decrease in profitability in high tax jurisdictions offset by certain expenses associated with the Ocular integration plan that impacted jurisdictions with lower tax rates.

Provision for Income Taxes

We recorded tax expense of $6.9 million in the first nine months of fiscal 2008 compared to $6.5 million in the first nine months of fiscal 2007. The effective tax rate for the first nine months of fiscal 2008 (provision for income taxes divided by income before taxes) was approximately 16.2 percent compared to approximately 33.3 percent for the first nine months of fiscal 2007. The decrease in our effective tax rate was primarily due to a shift in our geographic mix of income.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

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

and Results of Operations, Continued

Provision for Income Taxes

We recorded tax expense of $7.3 million in the first half of fiscal 2008 compared to $1.6 million in the first half of fiscal 2007. The effective tax rate for the first half of fiscal 2008 (provision for income taxes divided by income before taxes) was approximately 28.8 percent compared to approximately 24.8 percent for the first half of fiscal 2007. The increase in our effective tax rate was due primarily to our geographic mix of income, which continues to be impacted by certain expenses associated with the Ocular integration plan in jurisdictions with lower tax rates.

Provision for Income Taxes

We recorded tax expense of $2.6 million in the first quarter of fiscal 2008 compared to $1.4 million in the first quarter of fiscal 2007. The effective tax rate for the first quarter of fiscal 2008 (provision for taxes divided by income before taxes) was approximately 27.5 percent compared to approximately 21.2 percent for the first quarter of fiscal 2007. The increase in our effective tax rate was due primarily to our geographic mix of income, which continues to be impacted by certain expenses associated with the Ocular integration plan in jurisdictions with lower tax rates.

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THE COOPER COMPANIES, INC. AND SUBSIDIARIES

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

and Results of Operations, Continued

Provision for Income Taxes

We recorded tax expense of $11.9 million for fiscal year 2007 compared to $7.1 million for fiscal year 2006. Our geographic mix of income changed during 2007, and certain expenses associated with the Ocular integration plan have impacted jurisdictions with lower tax rates; resulting in net operating losses in jurisdictions with lower tax rates and net operating income in jurisdictions with higher tax rates.

Provision for Income Taxes

Our effective tax rate (ETR) for fiscal 2006 was 9.7% down from 15.4% in fiscal 2005 and 17.5% in 2004. The reduction of our ETR resulted primarily from a greater percentage of our income being taxed at rates substantially lower than the U.S. statutory rate.

Provision for Income Taxes

Our effective tax rate (ETR) for fiscal 2005 was 15.4% down from fiscal 2004’s ETR of 17.5% and fiscal 2003’s ETR of 24%. The reduction of our ETR resulted from a greater percentage of our income being taxed at rates substantially lower than the U.S. statutory rate.

We implemented a global trading arrangement in fiscal 1999 to minimize both the taxes reported in our statement of income and the actual taxes we will have to pay when we use all the benefits of our net operating losses (NOL). The global trading arrangement consisted of a restructuring of legal ownership for the CVI foreign sales and manufacturing subsidiaries.

Provision for Income Taxes

Our effective tax rate (ETR) for fiscal 2004 was 17.5% down from fiscal 2003’s effective tax rate (ETR) of 24% and fiscal 2002’s ETR of 25%. The reduction of our ETR resulted from a greater percent of our income being taxed at rates substantially lower than the U.S. statutory rate. We expect our ETR to be 21% for fiscal 2005.

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Management’s Discussion and Analysis of Financial Condition and

Results of Operations – (Continued)

With anticipated faster growth outside the U.S. and a favorable mix of products manufactured outside the U.S., Cooper now expects that its net operating loss carryforwards (NOLs) in the U.S. will last through 2007.

We implemented a global trading arrangement in fiscal 1999 to minimize both the taxes reported in our statement of income and the actual taxes we will have to pay when we use all the benefits of our NOLs. The global trading arrangement consisted of a restructuring of legal ownership for the CooperVision foreign sales and manufacturing subsidiaries.

The stock of those subsidiaries is now owned by a single foreign holding company, which centrally directs much of the activities of those subsidiaries. The foreign holding company has applied for and received the benefits of a reduced tax rate under a special tax regime available in its country of domicile. Assuming no other major acquisitions or large stock issuance, we currently expect that this plan will extend the cash flow benefits of the existing NOLs through 2007, and that actual cash payments of taxes will average less than 5% of pretax profits over this period. After 2007, actual cash payments of taxes are expected to average less than 20% of pretax profits.