Company Quick10K Filing
Quick10K
Cooper Tire & Rubber
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$34.32 50 $1,720
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
8-K 2019-02-19 Earnings, Other Events, Exhibits
8-K 2019-02-06 Other Events, Exhibits
8-K 2019-01-30 Other Events, Exhibits
8-K 2019-01-18 Other Events, Exhibits
8-K 2018-12-12 Enter Agreement, Other Events, Exhibits
8-K 2018-11-15 Officers, Regulation FD, Exhibits
8-K 2018-10-26 Earnings, Officers, Other Events, Exhibits
8-K 2018-10-10 Other Events, Exhibits
8-K 2018-08-06 Earnings, Other Events, Exhibits
8-K 2018-05-04 Shareholder Vote
8-K 2018-04-09 Officers, Regulation FD, Exhibits
GPC Genuine Parts
CPRT Copart
KMX Carmax
KAR Kar Auction Services
CASY Caseys General Stores
LAD Lithia Motors
ABG Asbury Automotive Group
GPI Group 1 Automotive
CRMT Americas Carmart
TA TravelCenters of America
CTB 2018-12-31
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Note 1. Significant Accounting Policies
Note 2. Revenue From Contracts with Customers
Note 3. Grt Acquisition
Note 4. Inventories
Note 5. Goodwill and Intangibles
Note 6. Accrued Liabilities
Note 7. Income Taxes
Note 8. Debt
Note 9. Fair Value Measurements
Note 10. Pensions and Postretirement Benefits Other Than Pensions
Note 11. Other Long-Term Liabilities
Note 12. Common Stock
Note 13. Stock-Based Compensation
Note 14. Changes in Accumulated Other Comprehensive Income (Loss) By Component
Note 15. Comprehensive Income (Loss) Attributable To Noncontrolling Shareholders' Interests
Note 16. Lease Commitments
Note 17. Contingent Liabilities
Note 18. Business Segments
Note 19. Subsequent Events
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
Part IV
Item 15.Exhibits and Financial Statement Schedules
Item 16.Form 10-K Summary
EX-10.XL a201812sailunjvagreeme.htm
EX-21 a2018123110kexhibit21.htm
EX-23 a2018123110kexhibit23.htm
EX-24 a2018123110kexhibit24.htm
EX-31.1 a2018123110kexhibit311.htm
EX-31.2 a2018123110kexhibit312.htm
EX-32 a2018123110kexhibit32.htm
EX-33.XLI a201812newcfoeperjesyo.htm

Cooper Tire & Rubber Earnings 2018-12-31

CTB 10K Annual Report

Balance SheetIncome StatementCash Flow

Document
30000000024100000350000003300000035000000030000000false--12-31FY20182018-12-310000024491YesfalseLarge Accelerated FilerCOOPER TIRE & RUBBER COfalsefalseNoYesCTB757000058360000.650.420.420.421130000000030000000087850292878502920.080.07625P3Y0.350.350.21274000P8YP2YP2YP1Y33827000120000000100000000115000000500000000P10YP40YP10YP20YP14YP2YP10YP5YP10YP5Y18499000P4YP3Y15.6315.630.33330.33330.33330.33330.33330.33330.33330.33330.33330.33330.33330.33330.33330.33330.3333P10Y3690855337776659495000000 0000024491 2018-01-01 2018-12-31 0000024491 2019-02-14 0000024491 2018-06-29 0000024491 2016-01-01 2016-12-31 0000024491 2017-01-01 2017-12-31 0000024491 2017-12-31 0000024491 2018-12-31 0000024491 us-gaap:TreasuryStockMember 2016-01-01 2016-12-31 0000024491 us-gaap:RetainedEarningsMember 2018-01-01 2018-12-31 0000024491 us-gaap:ParentMember 2018-01-01 2018-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2017-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-01-01 2016-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2017-01-01 2017-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2016-12-31 0000024491 us-gaap:ParentMember 2017-01-01 2017-12-31 0000024491 2016-12-31 0000024491 us-gaap:RetainedEarningsMember 2015-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-01-01 2017-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-12-31 0000024491 us-gaap:RetainedEarningsMember 2017-12-31 0000024491 us-gaap:CommonStockMember 2015-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000024491 us-gaap:CommonStockMember 2017-12-31 0000024491 us-gaap:ParentMember 2016-01-01 2016-12-31 0000024491 us-gaap:RetainedEarningsMember 2018-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2016-01-01 2016-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2016-12-31 0000024491 us-gaap:ParentMember 2015-12-31 0000024491 us-gaap:TreasuryStockMember 2015-12-31 0000024491 us-gaap:TreasuryStockMember 2016-12-31 0000024491 us-gaap:ParentMember 2016-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2017-01-01 2017-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2018-12-31 0000024491 us-gaap:RetainedEarningsMember 2017-01-01 2017-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000024491 us-gaap:ParentMember 2018-12-31 0000024491 us-gaap:TreasuryStockMember 2018-01-01 2018-12-31 0000024491 us-gaap:TreasuryStockMember 2017-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-12-31 0000024491 us-gaap:TreasuryStockMember 2017-01-01 2017-12-31 0000024491 us-gaap:RetainedEarningsMember 2016-01-01 2016-12-31 0000024491 us-gaap:NoncontrollingInterestMember 2015-12-31 0000024491 us-gaap:RetainedEarningsMember 2016-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2015-12-31 0000024491 us-gaap:ParentMember 2017-12-31 0000024491 us-gaap:CommonStockMember 2018-12-31 0000024491 2015-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2016-01-01 2016-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2015-12-31 0000024491 us-gaap:CommonStockMember 2016-12-31 0000024491 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-12-31 0000024491 us-gaap:TreasuryStockMember 2018-12-31 0000024491 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000024491 us-gaap:CostOfSalesMember us-gaap:LossFromCatastrophesMember 2017-01-01 2017-12-31 0000024491 us-gaap:CostOfSalesMember us-gaap:LossFromCatastrophesMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:AccountingStandardsUpdate201602Member us-gaap:ScenarioForecastMember 2019-01-01 0000024491 us-gaap:CostOfSalesMember us-gaap:LossFromCatastrophesMember 2017-01-22 2018-12-31 0000024491 srt:MaximumMember us-gaap:AccountingStandardsUpdate201602Member us-gaap:ScenarioForecastMember 2019-01-01 0000024491 us-gaap:UnfavorableRegulatoryActionMember 2016-06-01 2016-12-31 0000024491 us-gaap:UnfavorableRegulatoryActionMember 2017-01-01 2017-03-31 0000024491 2017-12-22 0000024491 srt:MinimumMember us-gaap:ComputerSoftwareIntangibleAssetMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:ComputerSoftwareIntangibleAssetMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:IntellectualPropertyMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:IntellectualPropertyMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember ctb:MoldsCoresAndRingsMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:LandImprovementsMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:FurnitureAndFixturesMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:LandImprovementsMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:BuildingMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember ctb:MoldsCoresAndRingsMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:FurnitureAndFixturesMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:MachineryAndEquipmentMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:MachineryAndEquipmentMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:BuildingMember 2018-01-01 2018-12-31 0000024491 ctb:LightvehicleMember 2018-01-01 2018-12-31 0000024491 ctb:TBRMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:OtherMember ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:LightvehicleMember ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:TBRMember ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 srt:ConsolidationEliminationsMember ctb:TBRMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:OtherMember ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 ctb:OtherMember 2018-01-01 2018-12-31 0000024491 srt:ConsolidationEliminationsMember ctb:OtherMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 srt:ConsolidationEliminationsMember 2018-01-01 2018-12-31 0000024491 srt:ConsolidationEliminationsMember ctb:LightvehicleMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:TBRMember ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:LightvehicleMember ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:CalculatedUnderRevenueGuidanceInEffectBeforeTopic606Member 2017-12-31 0000024491 us-gaap:AccountingStandardsUpdate201409Member us-gaap:DifferenceBetweenRevenueGuidanceInEffectBeforeAndAfterTopic606Member 2017-12-31 0000024491 ctb:GRTAcquisitionMember 2017-12-31 0000024491 ctb:GRTAcquisitionMember 2016-12-01 0000024491 ctb:GRTAcquisitionMember 2016-12-01 2017-12-31 0000024491 ctb:GRTAcquisitionMember 2016-01-01 2016-03-31 0000024491 ctb:GRTAcquisitionMember 2016-12-01 2016-12-31 0000024491 2018-07-01 2018-09-30 0000024491 ctb:GRTAcquisitionMember 2017-04-01 2017-06-30 0000024491 ctb:GRTAcquisitionMember 2017-01-01 2017-03-31 0000024491 ctb:GRTAcquisitionMember 2018-10-01 2018-12-31 0000024491 ctb:CapitalizedSoftwareDevelopmentCostsMember 2018-12-31 0000024491 us-gaap:OtherIntangibleAssetsMember 2017-12-31 0000024491 us-gaap:TrademarksAndTradeNamesMember 2018-12-31 0000024491 us-gaap:TrademarksAndTradeNamesMember 2017-12-31 0000024491 ctb:CapitalizedSoftwareDevelopmentCostsMember 2017-12-31 0000024491 us-gaap:OtherIntangibleAssetsMember 2018-12-31 0000024491 ctb:LandUseRightsMember 2018-12-31 0000024491 us-gaap:TrademarksMember 2017-12-31 0000024491 us-gaap:TrademarksMember 2018-12-31 0000024491 ctb:LandUseRightsMember 2017-12-31 0000024491 2018-10-01 2018-12-31 0000024491 2010-12-31 0000024491 2011-01-01 2011-12-31 0000024491 us-gaap:StateAdministrationOfTaxationChinaMember 2017-10-01 2017-12-31 0000024491 us-gaap:HerMajestysRevenueAndCustomsHMRCMember 2017-10-01 2017-12-31 0000024491 us-gaap:StateAdministrationOfTaxationChinaMember 2018-01-01 2018-12-31 0000024491 us-gaap:StateAdministrationOfTaxationChinaMember 2016-01-01 2016-12-31 0000024491 us-gaap:HerMajestysRevenueAndCustomsHMRCMember 2016-01-01 2016-12-31 0000024491 us-gaap:HerMajestysRevenueAndCustomsHMRCMember 2018-01-01 2018-12-31 0000024491 us-gaap:DomesticCountryMember 2018-12-31 0000024491 us-gaap:ForeignCountryMember 2018-12-31 0000024491 us-gaap:DomesticCountryMember 2018-01-01 2018-12-31 0000024491 us-gaap:ForeignCountryMember 2017-01-01 2017-12-31 0000024491 us-gaap:DomesticCountryMember 2017-01-01 2017-12-31 0000024491 us-gaap:ForeignCountryMember 2018-01-01 2018-12-31 0000024491 us-gaap:DomesticCountryMember 2016-01-01 2016-12-31 0000024491 us-gaap:ForeignCountryMember 2016-01-01 2016-12-31 0000024491 us-gaap:LetterOfCreditMember 2017-12-31 0000024491 ctb:AsianCreditLinesMember 2018-12-31 0000024491 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2018-02-15 0000024491 ctb:AccountsReceivableSecuritizationFacilityMember ctb:AmendedAccountsReceivableFacilityMember 2018-02-15 0000024491 us-gaap:LetterOfCreditMember us-gaap:LineOfCreditMember 2018-02-15 0000024491 us-gaap:LetterOfCreditMember 2018-12-31 0000024491 2010-01-01 2010-12-31 0000024491 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2018-12-31 0000024491 ctb:BankGroupAndAccountsReceivableSecuritizationFacilityMember 2018-12-31 0000024491 ctb:CapitalizedLeasesAndOtherMember 2018-12-31 0000024491 ctb:UnsecuredNotesDueInDecemberTwoThousandNineteenMember 2018-12-31 0000024491 ctb:UnsecuredNotesDueInMarchTwoThousandTwentySevenMember 2018-12-31 0000024491 ctb:UnsecuredNotesDueInMarchTwoThousandTwentySevenMember 2017-12-31 0000024491 ctb:UnsecuredNotesDueInDecemberTwoThousandNineteenMember 2017-12-31 0000024491 ctb:CapitalizedLeasesAndOtherMember 2017-12-31 0000024491 srt:ParentCompanyMember ctb:UnsecuredNotesDueInDecemberTwoThousandNineteenMember 2018-12-31 0000024491 srt:ParentCompanyMember ctb:UnsecuredNotesDueInMarchTwoThousandTwentySevenMember 2018-12-31 0000024491 us-gaap:NondesignatedMember 2017-12-31 0000024491 us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000024491 us-gaap:OtherNoncurrentLiabilitiesMember 2018-12-31 0000024491 us-gaap:NondesignatedMember 2018-12-31 0000024491 us-gaap:DesignatedAsHedgingInstrumentMember 2017-12-31 0000024491 us-gaap:OtherNoncurrentLiabilitiesMember 2017-12-31 0000024491 us-gaap:AccruedLiabilitiesMember 2018-12-31 0000024491 us-gaap:AccruedLiabilitiesMember 2017-12-31 0000024491 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:OtherNonoperatingIncomeExpenseMember 2016-01-01 2016-12-31 0000024491 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:OtherNonoperatingIncomeExpenseMember 2018-01-01 2018-12-31 0000024491 us-gaap:ForeignExchangeContractMember us-gaap:NondesignatedMember us-gaap:OtherNonoperatingIncomeExpenseMember 2017-01-01 2017-12-31 0000024491 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2017-12-31 0000024491 us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2018-12-31 0000024491 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2018-12-31 0000024491 us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember ctb:NonEmployeeDirectorsStockPlanMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignExchangeContractMember 2018-12-31 0000024491 us-gaap:FairValueInputsLevel1Member 2017-12-31 0000024491 us-gaap:ForeignExchangeContractMember 2018-12-31 0000024491 srt:MaximumMember us-gaap:ForeignExchangeContractMember 2018-01-01 2018-12-31 0000024491 us-gaap:ForeignExchangeContractMember 2017-12-31 0000024491 us-gaap:FairValueInputsLevel1Member 2018-12-31 0000024491 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2017-01-01 2017-12-31 0000024491 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2016-01-01 2016-12-31 0000024491 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-01-01 2018-12-31 0000024491 us-gaap:CashFlowHedgingMember 2018-01-01 2018-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-01-01 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-01-01 2018-12-31 0000024491 srt:ScenarioPreviouslyReportedMember 2017-01-01 2017-12-31 0000024491 srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member ctb:InternationalTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member 2017-01-01 2017-12-31 0000024491 srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member ctb:AmericasTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember country:US 2018-12-31 0000024491 country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashMember us-gaap:ForeignPlanMember 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashMember country:US 2017-12-31 0000024491 us-gaap:ForeignPlanMember 2017-12-31 0000024491 us-gaap:ForeignPlanMember 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:ForeignPlanMember 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember country:US 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:ForeignPlanMember 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:ForeignPlanMember 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:ForeignPlanMember 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:ForeignPlanMember 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:ForeignPlanMember 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashMember us-gaap:ForeignPlanMember 2018-12-31 0000024491 country:US 2018-12-31 0000024491 2016-07-01 2016-09-30 0000024491 country:GB 2018-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2016-10-01 2016-12-31 0000024491 country:GB 2017-12-31 0000024491 country:DE 2017-12-31 0000024491 2016-09-30 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2016-07-01 2016-09-30 0000024491 country:DE 2018-12-31 0000024491 srt:MinimumMember 2018-12-31 0000024491 srt:MaximumMember 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel2Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel1Member country:GB 2017-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2018-12-31 0000024491 us-gaap:FairValueInputsLevel2Member country:US 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember country:US 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel1Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel2Member country:GB 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember country:GB 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel1Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member country:US 2018-12-31 0000024491 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel2Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:US 2018-12-31 0000024491 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2017-12-31 0000024491 us-gaap:PrivateEquityFundsMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel2Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember country:US 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel1Member country:US 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember country:GB 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel1Member country:US 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel2Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember country:US 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel1Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member country:GB 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel1Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel3Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel3Member country:GB 2018-12-31 0000024491 us-gaap:FairValueInputsLevel1Member country:GB 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2017-12-31 0000024491 us-gaap:FairValueInputsLevel2Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel3Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member country:GB 2018-12-31 0000024491 us-gaap:FairValueInputsLevel1Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel1Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel1Member country:GB 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel2Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel3Member country:US 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel2Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2018-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2018-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel1Member country:US 2017-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel3Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel2Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel1Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel1Member country:GB 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel2Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember country:GB 2018-12-31 0000024491 us-gaap:FairValueInputsLevel1Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel3Member country:US 2017-12-31 0000024491 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel1Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel2Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember country:GB 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel3Member country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel3Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueInputsLevel3Member country:GB 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember country:US 2017-12-31 0000024491 us-gaap:FairValueInputsLevel1Member country:GB 2018-12-31 0000024491 us-gaap:FairValueInputsLevel2Member country:GB 2018-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2018-12-31 0000024491 us-gaap:PrivateEquityFundsMember us-gaap:FairValueInputsLevel2Member country:US 2018-12-31 0000024491 us-gaap:FixedIncomeFundsMember country:US 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:US 2017-12-31 0000024491 us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:US 2017-12-31 0000024491 us-gaap:FixedIncomeFundsMember us-gaap:FairValueInputsLevel3Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember us-gaap:FairValueInputsLevel3Member country:GB 2018-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel2Member country:GB 2017-12-31 0000024491 ctb:DefinedBenefitPlanOtherMember us-gaap:FairValueInputsLevel3Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember us-gaap:FairValueInputsLevel3Member country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanDebtSecurityMember us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember country:GB 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanRealEstateMember us-gaap:FairValueInputsLevel2Member country:US 2018-12-31 0000024491 us-gaap:DefinedBenefitPlanCashAndCashEquivalentsMember country:GB 2018-12-31 0000024491 us-gaap:FairValueInputsLevel2Member country:GB 2017-12-31 0000024491 us-gaap:DefinedBenefitPlanEquitySecuritiesMember country:GB 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2017-01-01 2017-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2018-01-01 2018-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2016-01-01 2016-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2016-12-31 0000024491 us-gaap:FairValueInputsLevel3Member country:GB 2015-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2018-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2018-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2018-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2017-12-31 0000024491 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2016-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2016-12-31 0000024491 country:US us-gaap:PensionPlansDefinedBenefitMember 2016-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2017-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-12-31 0000024491 us-gaap:ForeignPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 us-gaap:PensionPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2016-01-01 2016-12-31 0000024491 country:US us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2018-12-31 0000024491 srt:ScenarioPreviouslyReportedMember 2016-01-01 2016-12-31 0000024491 srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member ctb:AmericasTireMember 2016-01-01 2016-12-31 0000024491 srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member ctb:InternationalTireMember 2016-01-01 2016-12-31 0000024491 us-gaap:CorporateNonSegmentMember srt:RestatementAdjustmentMember us-gaap:AccountingStandardsUpdate201707Member 2016-01-01 2016-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary162017Member 2017-02-16 2018-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary162017Member 2017-02-16 0000024491 ctb:ShareRepurchaseProgramFebruary192016Member 2016-02-19 0000024491 ctb:ShareRepurchaseProgramFebruary192016Member 2016-02-19 2018-12-31 0000024491 2014-08-01 2018-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary162017Member 2017-01-01 2017-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary192016Member 2017-01-01 2017-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary202015Member 2016-01-01 2016-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary192016Member 2016-01-01 2016-12-31 0000024491 ctb:ShareRepurchaseProgramFebruary162017Member 2018-01-01 2018-12-31 0000024491 us-gaap:PerformanceSharesMember 2017-01-01 2017-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember 2016-01-01 2016-12-31 0000024491 us-gaap:EmployeeStockOptionMember 2017-01-01 2017-12-31 0000024491 us-gaap:PerformanceSharesMember 2018-01-01 2018-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember 2017-01-01 2017-12-31 0000024491 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-12-31 0000024491 us-gaap:PerformanceSharesMember 2016-01-01 2016-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0000024491 us-gaap:EmployeeStockOptionMember 2016-01-01 2016-12-31 0000024491 us-gaap:PerformanceSharesMember 2018-12-31 0000024491 us-gaap:PerformanceSharesMember 2017-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember 2018-01-01 2018-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFifteenToTwoThousandSeventeenMember 2016-01-01 2016-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember 2017-01-01 2017-12-31 0000024491 ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember 2014-02-01 2014-02-28 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember 2016-01-01 2016-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember 2016-01-01 2016-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFifteenToTwoThousandSeventeenMember 2015-01-01 2015-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember 2018-02-01 2018-02-28 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember 2015-01-01 2015-12-31 0000024491 ctb:LongTermIncentivePlanTwoThousandThirteenToTwoThousandFifteenMember 2013-02-01 2013-02-28 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember 2018-01-01 2018-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember 2016-02-01 2016-02-29 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember 2014-01-01 2014-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember us-gaap:ScenarioForecastMember 2019-01-01 2019-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlan2017to2019Member 2017-02-01 2017-02-28 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandFifteenToTwoThousandSeventeenMember 2017-01-01 2017-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember 2017-12-31 0000024491 us-gaap:PerformanceSharesMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember us-gaap:ScenarioForecastMember 2020-01-01 2020-12-31 0000024491 ctb:LessThanOrEqualToFifteenPointSixThreeMember 2018-12-31 0000024491 ctb:GreaterThanFifteenPointSixThreeMember 2018-12-31 0000024491 ctb:LessThanOrEqualToFifteenPointSixThreeMember 2018-01-01 2018-12-31 0000024491 ctb:GreaterThanFifteenPointSixThreeMember 2018-01-01 2018-12-31 0000024491 srt:MinimumMember us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0000024491 srt:MaximumMember us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlan2017to2019Member us-gaap:ShareBasedCompensationAwardTrancheOneMember 2017-02-01 2017-02-28 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2016-02-01 2016-02-29 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlan2017to2019Member us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2017-02-01 2017-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2014-02-01 2014-02-28 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2018-02-01 2018-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2014-02-01 2014-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandThirteenToTwoThousandFifteenMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2013-02-01 2013-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandFourteenToTwoThousandSixteenMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2014-02-01 2014-02-28 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2016-02-01 2016-02-29 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2018-02-01 2018-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandThirteenToTwoThousandFifteenMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2013-02-01 2013-02-28 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlan2017to2019Member us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2017-02-01 2017-02-28 0000024491 us-gaap:EmployeeStockOptionMember ctb:LongTermIncentivePlanTwoThousandThirteenToTwoThousandFifteenMember us-gaap:ShareBasedCompensationAwardTrancheThreeMember 2013-02-01 2013-02-28 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandSixteenToTwoThousandEighteenMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2016-02-01 2016-02-29 0000024491 us-gaap:RestrictedStockUnitsRSUMember ctb:LongTermIncentivePlanTwoThousandEighteenToTwoThousandTwentyMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2018-02-01 2018-02-28 0000024491 us-gaap:AccumulatedTranslationAdjustmentMember 2017-01-01 2017-12-31 0000024491 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-01-01 2017-12-31 0000024491 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-01-01 2017-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedTranslationAdjustmentMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2018-01-01 2018-12-31 0000024491 us-gaap:AccumulatedTranslationAdjustmentMember 2016-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2016-12-31 0000024491 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-12-31 0000024491 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember 2017-01-01 2017-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0000024491 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2016-12-31 0000024491 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2017-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember 2017-01-01 2017-12-31 0000024491 us-gaap:AccumulatedTranslationAdjustmentMember 2017-12-31 0000024491 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-12-31 0000024491 2017-07-01 2017-09-30 0000024491 us-gaap:AccountingStandardsUpdate201707Member 2016-01-01 2016-12-31 0000024491 us-gaap:SubsequentEventMember 2019-01-17 2019-01-17 0000024491 us-gaap:AccountingStandardsUpdate201707Member 2017-01-01 2017-12-31 0000024491 us-gaap:AccountingStandardsUpdate201618Member us-gaap:ScenarioAdjustmentMember 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2016-01-01 2016-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2017-01-01 2017-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:AmericasTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2018-01-01 2018-12-31 0000024491 us-gaap:IntersegmentEliminationMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-12-31 0000024491 us-gaap:IntersegmentEliminationMember 2016-01-01 2016-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-01-01 2017-12-31 0000024491 ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2016-01-01 2016-12-31 0000024491 us-gaap:IntersegmentEliminationMember 2017-01-01 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2016-01-01 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2017-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:InternationalTireMember 2017-01-01 2017-12-31 0000024491 ctb:InternationalTireMember 2016-01-01 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:AmericasTireMember 2016-01-01 2016-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:InternationalTireMember 2016-01-01 2016-12-31 0000024491 ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2016-12-31 0000024491 ctb:AmericasTireMember 2016-01-01 2016-12-31 0000024491 ctb:AmericasTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2016-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2016-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:AmericasTireMember 2018-01-01 2018-12-31 0000024491 ctb:InternationalTireMember 2017-01-01 2017-12-31 0000024491 us-gaap:IntersegmentEliminationMember ctb:InternationalTireMember 2018-01-01 2018-12-31 0000024491 ctb:TBCTreadwaysMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2016-01-01 2016-12-31 0000024491 ctb:AmericanTireDistributorsInc.Member us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2017-01-01 2017-12-31 0000024491 ctb:AmericanTireDistributorsInc.Member us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2016-01-01 2016-12-31 0000024491 ctb:TBCTreadwaysMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-12-31 0000024491 ctb:TBCTreadwaysMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2017-01-01 2017-12-31 0000024491 ctb:AmericanTireDistributorsInc.Member us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2017-01-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2016-01-01 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2016-01-01 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2018-01-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2017-01-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:RestOfWorldMember 2016-01-01 2016-12-31 0000024491 us-gaap:OperatingSegmentsMember country:US 2017-01-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:PrcMember 2017-12-31 0000024491 srt:MinimumMember us-gaap:OtherRestructuringMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 srt:MaximumMember us-gaap:OtherRestructuringMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 srt:MinimumMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 srt:MinimumMember us-gaap:EmployeeSeveranceMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 srt:MaximumMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 srt:MaximumMember us-gaap:EmployeeSeveranceMember us-gaap:ScenarioForecastMember us-gaap:SubsequentEventMember 2019-01-01 2019-12-31 0000024491 2017-10-01 2017-12-31 0000024491 2018-04-01 2018-06-30 0000024491 us-gaap:CorporateNonSegmentMember 2018-07-01 2018-09-30 0000024491 us-gaap:IntersegmentEliminationMember 2018-01-01 2018-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-10-01 2018-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2018-04-01 2018-06-30 0000024491 2018-01-01 2018-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-01-01 2018-03-31 0000024491 us-gaap:IntersegmentEliminationMember 2018-10-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-07-01 2018-09-30 0000024491 us-gaap:IntersegmentEliminationMember 2018-04-01 2018-06-30 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-07-01 2018-09-30 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-10-01 2018-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2018-01-01 2018-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2018-04-01 2018-06-30 0000024491 us-gaap:IntersegmentEliminationMember 2018-07-01 2018-09-30 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-01-01 2018-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2018-04-01 2018-06-30 0000024491 us-gaap:CorporateNonSegmentMember 2018-10-01 2018-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-04-01 2017-06-30 0000024491 us-gaap:CorporateNonSegmentMember 2017-07-01 2017-09-30 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-07-01 2017-09-30 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-10-01 2017-12-31 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-07-01 2017-09-30 0000024491 2017-04-01 2017-06-30 0000024491 us-gaap:IntersegmentEliminationMember 2017-04-01 2017-06-30 0000024491 us-gaap:IntersegmentEliminationMember 2017-07-01 2017-09-30 0000024491 2017-01-01 2017-03-31 0000024491 us-gaap:IntersegmentEliminationMember 2017-01-01 2017-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-04-01 2017-06-30 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-10-01 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2017-04-01 2017-06-30 0000024491 us-gaap:OperatingSegmentsMember ctb:InternationalTireMember 2017-01-01 2017-03-31 0000024491 us-gaap:CorporateNonSegmentMember 2017-10-01 2017-12-31 0000024491 us-gaap:CorporateNonSegmentMember 2017-01-01 2017-03-31 0000024491 us-gaap:OperatingSegmentsMember ctb:AmericasTireMember 2017-01-01 2017-03-31 0000024491 us-gaap:IntersegmentEliminationMember 2017-10-01 2017-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2015-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2018-01-01 2018-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2016-01-01 2016-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2016-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2016-01-01 2016-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2017-01-01 2017-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2018-01-01 2018-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2017-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2017-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2017-01-01 2017-12-31 0000024491 us-gaap:AllowanceForCreditLossMember 2018-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2016-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2018-12-31 0000024491 us-gaap:ValuationAllowanceOfDeferredTaxAssetsMember 2015-12-31 xbrli:shares xbrli:pure iso4217:USD iso4217:USD xbrli:shares ctb:Employee ctb:Store ctb:Segment ctb:Tire
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
For Annual and Transition Reports Pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934
ý
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2018
or
¨
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 001-04329
COOPER TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
 
34-4297750
(State or Other Jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
701 Lima Avenue, Findlay, Ohio
 
45840
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (419) 423-1321
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $1 par value per share
 
New York Stock Exchange
(Title of Each Class)
 
(Name of Each Exchange on which Registered)
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  ý    No  ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
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.  ý
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
ý
  
 
Accelerated filer
 
¨

Non-Accelerated Filer
 
¨



 
Smaller Reporting Company
 
¨

 
 
 
 
 
Emerging growth company
 
¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
The aggregate market value of the voting common stock held by non-affiliates of the registrant at June 29, 2018 was $1,259,031,486.
The number of shares outstanding of the registrant’s common stock as of February 14, 2019 was 50,073,633.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information from the registrant’s definitive proxy statement for its 2019 Annual Meeting of Stockholders will be herein incorporated by reference into Part III, Items 10 – 14, of this report.



TABLE OF CONTENTS
COOPER TIRE & RUBBER COMPANY – FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018
 
Page
reference
 
 
 
 
PART I
NOTE ABOUT FORWARD-LOOKING STATEMENTS
The annual report on Form 10-K contains what the Company believes are “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding projections, expectations or matters that the Company anticipates may happen with respect to the future performance of the industries in which the Company operates, the economies of the United States and other countries, or the performance of the Company itself, which involve uncertainty and risk. Such “forward-looking statements” are generally, though not always, preceded by words such as “anticipates,” “expects,” “will,” “should,” “believes,” “projects,” “intends,” “plans,” “estimates,” and similar terms that connote a view to the future and are not merely recitations of historical fact. Such statements are made solely on the basis of the Company’s current views and perceptions of future events, and there can be no assurance that such statements will prove to be true.
It is possible that actual results may differ materially from projections or expectations due to a variety of factors, including but not limited to:
volatility in raw material and energy prices, including those of rubber, steel, petroleum-based products and natural gas or the unavailability of such raw materials or energy sources;

-1-


the failure of the Company’s suppliers to timely deliver products or services in accordance with contract specifications;
changes to tariffs or trade agreements, or the imposition of new tariffs or trade restrictions, imposed on tires or materials or manufacturing equipment which the Company uses, including changes related to tariffs on automotive imports, as well as on tires, raw materials and tire-manufacturing equipment imported into the U.S. from China;
changes in economic and business conditions in the world, including changes related to the United Kingdom’s decision to withdraw from the European Union;
the inability to obtain and maintain price increases to offset higher production, tariffs or material costs;
the impact of the recently enacted tax reform legislation;
increased competitive activity including actions by larger competitors or lower-cost producers;
the failure to achieve expected sales levels;
changes in the Company’s customer or supplier relationships or distribution channels, including the write-off of outstanding accounts receivable or loss of particular business for competitive, credit, liquidity, bankruptcy, restructuring or other reasons;
the failure to develop technologies, processes or products needed to support consumer demand or changes in consumer behavior, including changes in sales channels;
the costs and timing of restructuring actions and impairments or other charges resulting from such actions, including the possible outcome of the recently announced decision to cease light vehicle production in the U.K., or from adverse industry, market or other developments;
consolidation or other cooperation by and among the Company’s competitors or customers;
inaccurate assumptions used in developing the Company’s strategic plan or operating plans, including impairment of goodwill supported by such plans, or the inability or failure to successfully implement such plans or to realize the anticipated savings or benefits from strategic actions;
risks relating to investments and acquisitions, including the failure to successfully integrate them into operations or their related financings may impact liquidity and capital resources;
the ultimate outcome of litigation brought against the Company, including product liability claims, which could result in commitment of significant resources and time to defend and possible material damages against the Company or other unfavorable outcomes;
a disruption in, or failure of, the Company’s information technology systems, including those related to cybersecurity, could adversely affect the Company’s business operations and financial performance;
government regulatory and legislative initiatives including environmental, healthcare, privacy and tax matters;
volatility in the capital and financial markets or changes to the credit markets and/or access to those markets;
changes in interest or foreign exchange rates or the benchmarks used for establishing the rates;
an adverse change in the Company’s credit ratings, which could increase borrowing costs and/or hamper access to the credit markets;
failure to implement information technologies or related systems, including failure by the Company to successfully implement ERP systems;
the risks associated with doing business outside of the U.S.;
technology advancements;
the inability to recover the costs to refresh existing products or develop and test new products or processes;
the impact of labor problems, including labor disruptions at the Company, its joint ventures, or at one or more of its large customers or suppliers;
failure to attract or retain key personnel;
changes in pension expense and/or funding resulting from the Company’s pension strategy, investment performance of the Company’s pension plan assets and changes in discount rate or expected return on plan assets assumptions, or changes to related accounting regulations;
changes in the Company’s relationship with its joint-venture partners or suppliers, including any changes with respect to its former PCT joint venture’s production of TBR products;

-2-


the ability to find and develop alternative sources for products supplied by PCT;
a variety of factors, including market conditions, may affect the actual amount expended on stock repurchases; the Company’s ability to consummate stock repurchases; changes in the Company’s results of operations or financial conditions or strategic priorities may lead to a modification, suspension or cancellation of stock repurchases, which may occur at any time;
the inability to adequately protect the Company’s intellectual property rights; and
the inability to use deferred tax assets.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected.
The Company makes no commitment to update any forward-looking statement included herein or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Further information covering issues that could materially affect financial performance is contained under Risk Factors below and in the Company’s other filings with the U. S. Securities and Exchange Commission (“SEC”).

Item 1.
BUSINESS
Cooper Tire & Rubber Company, with its subsidiaries (“Cooper” or the “Company”), is a leading manufacturer and marketer of replacement tires. It is the fifth largest tire manufacturer in North America and, according to a recognized trade source, the Cooper family of companies is the thirteenth largest tire company in the world based on sales. Cooper specializes in the design, manufacture, marketing and sales of passenger car, light truck, truck and bus radial ("TBR"), motorcycle and racing tires.
The Company is organized into four business segments: North America, Latin America, Europe and Asia. Each segment is managed separately. Additional information on the Company’s segments as reported, including their financial results, total assets, products, markets and presence in particular geographic areas, appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Business Segments” note to the consolidated financial statements.
Cooper Tire & Rubber Company was incorporated in the state of Delaware in 1930 as the successor to a business originally founded in 1914. Based in Findlay, Ohio, Cooper and its family of companies currently operate in 14 countries, including 9 manufacturing facilities and 22 distribution centers. As of December 31, 2018, it employed 9,027 persons worldwide.
Business Segments
The Company has four segments under Accounting Standards Codification (“ASC”) 280, “Segments”: 
North America, composed of the Company’s operations in the United States (“U.S.”) and Canada;
Latin America, composed of the Company’s operations in Mexico, Central America and South America;
Europe; and
Asia.
North America and Latin America meet the criteria for aggregation in accordance with ASC 280, as they are similar in their production and distribution processes and exhibit similar economic characteristics. The aggregated North America and Latin America segments are presented as “Americas Tire Operations” in the segment disclosure.
Both the Europe and Asia segments have been determined to be individually immaterial, as they do not meet the quantitative requirements for segment disclosure under ASC 280. In accordance with ASC 280, information about operating segments that are not reportable shall be combined and disclosed in an all other category separate from other reconciling items. As a result, these two segments have been combined in the segment operating results discussion. The results of the combined Europe and Asia segments are presented as “International Tire Operations” in the segment disclosure.
Americas Tire Operations Segment
The Americas Tire Operations segment manufactures and markets passenger car and light truck tires, primarily for sale in the U.S. replacement market. The segment also has a joint venture manufacturing operation in Mexico, Corporacion de Occidente SA de CV (“COOCSA”), which supplies passenger car tires to the North American, Mexican, Central American and South American markets. The segment also markets and distributes racing, TBR and motorcycle tires. The racing and motorcycle tires

-3-


are manufactured by the Company’s European Operations segment and by others. TBR tires are sourced from China-based Qingdao Ge Rui Da Rubber Co., Ltd. ("GRT"), a majority-owned joint venture manufacturing facility, and through an off-take agreement that was entered with Prinx Chengshan (Shandong) Tire Company Ltd. ("PCT"), the Company's former joint venture. In December 2017, the Company signed an off-take agreement with Sailun (Vietnam) Co., Ltd. ("Sailun Vietnam"), effective from January 1, 2018 through December 31, 2020, as an additional source of TBR tires. On December 12, 2018, Cooper Tire & Rubber Company Vietnam Holding, LLC ("Cooper Vietnam"), a wholly owned subsidiary of Cooper, and Sailun Vietnam entered into an equity joint venture contract to establish a joint venture in Vietnam which will produce and sell TBR tires. The new joint venture is expected to begin producing tires in 2020.
Major distribution channels and customers include independent tire dealers, wholesale distributors, regional and national retail tire chains, and large retail chains that sell tires as well as other automotive products. The segment does not currently sell its products directly to end users, except through three Company-owned retail stores. The segment sells a limited number of tires to original equipment manufacturers ("OEMs").
The segment operates in a highly competitive industry, which includes Bridgestone Corporation, Goodyear Tire & Rubber Company and Groupe Michelin. These competitors are substantially larger than the Company and serve OEMs as well as the replacement tire market. The segment also faces competition from low-cost producers in Asia, Mexico, South America and Central Europe. Some of those producers are foreign affiliates of the segment’s competitors in North America. The segment had a market share in 2018 of approximately 10.3 percent of all light vehicle replacement tire sales in the U.S. The segment also participates in the U.S. TBR tire market. A portion of the products manufactured by the segment are exported throughout the world.
Success in competing for the sale of replacement tires is dependent upon many factors, the most important of which are price, quality, performance, line coverage, availability through appropriate distribution channels and relationships with dealers and retailers. Other factors include warranty, credit terms and other value-added programs. The segment has built close working relationships through the years with independent dealers. It believes those relationships have enabled it to obtain a competitive advantage in that channel of the market. As a steadily increasing percentage of replacement tires are sold by large regional and national tire retailers, the segment has increased focus on its penetration of those distribution channels, while maintaining its traditionally strong network of independent dealers. The segment is also active in various other sales channels, including digital channels and others in which the Company has been less active in the past.
The segment’s replacement tire business has a broad customer base that includes purchasers of proprietary brand tires that are marketed and distributed by the Company and private label tires which are manufactured by the Company but marketed and distributed by the Company’s customers.
Customers generally place orders on a month-to-month basis and the segment adjusts production and inventory to meet those orders, which results in varying backlogs of orders at different times of the year. Tire sales are subject to a seasonal demand pattern. This usually results in the sales volumes being strongest in the third and fourth quarters and weaker in the first and second quarters.
International Tire Operations Segment
The International Tire Operations segment is the combination of the Europe and Asia operating segments. The European operations include manufacturing operations in the United Kingdom (“U.K.”) and the Republic of Serbia (“Serbia”). The U.K. entity manufactures and markets passenger car, light truck, motorcycle and racing tires and tire retread material for domestic and global markets. The Serbian entity manufactures passenger car and light truck tires primarily for the European markets and for export to the North American segment. The Asian operations are located in the People’s Republic of China (“PRC”). Cooper Kunshan Tire manufactures passenger car and light truck tires both for the Chinese domestic market and for export to markets outside of the PRC. On December 1, 2016, the Company acquired 65 percent ownership of China-based GRT, a joint venture manufacturing facility located in the PRC. GRT serves as a global source of TBR tire production for the Company. The segment also had another joint venture in the PRC, PCT, which manufactured and marketed truck and bus radial and bias tires, as well as passenger car and light truck tires for domestic and global markets. The Company sold its ownership interest in this joint venture in November 2014, and the Company began procuring certain TBR and passenger car tires under off-take agreements with PCT through mid-2018, which were subsequently extended and now expire in mid-2020. In December 2017, the Company signed an off-take agreement with Sailun Vietnam, as an additional source of TBR tires. On December 12, 2018, Cooper Tire & Rubber Company Vietnam Holding, LLC ("Cooper Vietnam"), a wholly owned subsidiary of Cooper, and Sailun Vietnam entered into an equity joint venture contract to establish a joint venture in Vietnam which will produce and sell TBR tires in addition to the off-take agreement. The new joint venture is expected to begin producing tires in 2020. The segment sells a majority of its tires in the replacement market, with a growing portion also sold to OEMs.
On January 17, 2019, Cooper Tire & Rubber Company Europe Ltd. (“Cooper Tire Europe”), a wholly owned subsidiary of the Company, committed to a plan to cease light vehicle tire production at its Melksham, England facility. Light vehicle tire

-4-


production is expected to be phased out over a period of approximately 10 months. An estimated 300 roles will be eliminated at the site. Cooper Tire Europe will obtain light vehicle tires to meet customer needs from other production sites within the Company’s global production network. Approximately 400 roles will remain in Melksham to support the functions that continue there, including motorsports and motorcycle tire production, the materials business, Cooper Tire Europe headquarters, sales and marketing, and the Europe Technical Center.
As in the Americas Tire Operations segment, the International Tire Operations segment operates in a highly competitive industry, which includes Bridgestone Corporation, Goodyear Tire & Rubber Company and Groupe Michelin. These competitors are substantially larger than the Company and serve OEMs as well as the replacement tire market. The segment also faces competition from low-cost producers.
Raw Materials
The Company’s principal raw materials include natural rubber, synthetic rubber, carbon black, chemicals and steel reinforcement components. The Company acquires its raw materials from various sources around the world to assure continuing supplies for its manufacturing operations and to mitigate the risk of potential supply disruptions.
During 2018, the Company experienced increases in the costs of certain of its principal raw materials in comparison to 2017. The pricing volatility of natural rubber and certain other raw materials contributes to the difficulty in accurately predicting and managing these costs.
The Company has a purchasing office in Singapore to acquire natural rubber directly from producers in Southeast Asia. This purchasing operation enables the Company to work directly with producers to continually improve consistency and quality, while reducing the costs of materials, transportation and transactions.
The Company’s contractual relationships with its raw material suppliers are generally based on long-term agreements or purchase order arrangements. For natural rubber, natural gas and certain principal materials, procurement is managed through a combination of buying forward production requirements and utilizing the spot market. For other principal materials, procurement arrangements include supply agreements that may contain formula-based pricing based on commodity indices, multi-year agreements or spot purchases. These arrangements only cover quantities needed to satisfy normal manufacturing demands.
Working Capital
The Company’s working capital consists mainly of inventory, accounts receivable and accounts payable. These working capital accounts are closely managed by the Company. Inventory balances are primarily valued at a last-in, first-out (“LIFO”) basis in the U.S. and under the first-in, first-out (“FIFO”) basis in the rest of the world. Inventories turn regularly, but balances typically increase during the first half of the year before declining as a result of increased sales in the second half. The Company’s inventory levels are generally kept within a targeted range to meet projected demand. The mix of inventory is critical to inventory turnover and meeting customer demand. Accounts receivable and accounts payable are also affected by this business cycle, typically requiring the Company to have greater working capital needs during the second and third quarters. The Company engages in a rigorous credit analysis of its customers and monitors their financial positions. The Company offers incentives to certain customers to encourage the payment of account balances prior to their scheduled due dates.
At December 31, 2018, the Company held cash and cash equivalents of $356 million.
Research, Development and Product Improvement
The Company directs its research activities toward product development, performance and operating efficiency. The Company conducts extensive testing of current tire lines, as well as new concepts in tire design, construction and materials. During 2018, over 137 million miles of tests were performed on indoor test wheels and in monitored road tests. The Company has a tire and vehicle test track in Texas that assists with the Company’s testing activities. Uniformity equipment is used to physically monitor manufactured tires for high standards of ride quality. The Company continues to design and develop specialized equipment to fit the precise needs of its manufacturing and quality control requirements.
Patents, Intellectual Property and Trademarks
The Company owns or has licenses to use patents and intellectual property covering various aspects in the design and manufacture of its products and processes and equipment for the manufacture of its products. While the Company believes these assets as a group are of material importance, it does not consider any one asset or group of these assets to be of such importance that the loss or expiration thereof would materially affect its business.
The Company owns and uses tradenames and trademarks worldwide. While the Company believes such tradenames and trademarks as a group are of material importance, the trademarks the Company considers most significant to its business are

-5-


those using the words "Cooper," "Mastercraft," "Roadmaster," "Starfire" and “Avon.” The Company believes all of these significant trademarks are valid and will have unlimited duration as long as they are adequately protected and appropriately used. Certain other tradenames and trademarks are being amortized over the next one to two years.
Seasonal Trends
There is year-round demand for passenger car and truck replacement tires, but passenger car replacement tire sales are generally strongest during the third and fourth quarters of the year. Winter tires are sold principally during the months of May through November.
Environmental Matters
The Company recognizes the importance of compliance in environmental matters and has programs in place to comply with local, state, federal and foreign requirements and regulations. The Company has an organizational structure which allows it to supervise environmental activities, planning and programs to ensure compliance. The Company also participates in activities concerning general industry environmental matters, and the Company is committed to achieving a baseline of key environmental sustainability metrics and targets. A number of the Company’s operations are certified to the ISO 14001 standard and the Company has been recognized with several awards for efforts to improve energy efficiency.
The Company’s manufacturing facilities, like those of the industry generally, are subject to numerous laws and regulations designed to protect the environment. In general, the Company has not experienced difficulty in complying with these requirements and believes they have not had a material adverse effect on its financial condition or the results of its operations. The Company expects additional requirements with respect to environmental matters will be imposed in the future. The Company’s 2018 expense and capital expenditures for environmental matters at its facilities were not material, nor is it expected that expenditures in 2019 for such matters will be material.
Global Social Impact
The Company is committed to environmental responsibility and the health and safety of its employees, contractors and the community, as well as the long-term, sustainable health and growth of the Company. The Company's organization structure allows it to supervise and audit, using a combination of internal and external resources, environmental activities, planning and programs to ensure compliance with applicable environmental, health and safety ("EHS") requirements and Company standards. Additionally, the Company has implemented a global EHS management system to predictably and sustainably manage EHS and to hold management accountable for non-compliance. The Company also participates in activities concerning general industry environmental matters, including the Tire Industry Project and the Global Platform for Sustainable Natural Rubber. For an overview of the Company's EHS and sustainability strategy and commitments, please visit http://www.coopertire.com/Corporate-Responsibility/Sustainability.aspx. The information contained on or accessible through the Company's website is not incorporated by reference in this annual report on Form 10-K and should not be considered a part of this report.
Foreign Operations
The Company has a manufacturing facility, a technical center, a distribution center and its European headquarters office located in the U.K. The Company has a manufacturing facility, two distribution centers and an office in Serbia. In total, there are seven distribution centers and three sales offices in Europe. The number of foreign operations in Europe will not be impacted by the January 17, 2019 decision to cease light vehicle tire production at its Melksham, England manufacturing facility. The Company has a manufacturing facility and a joint venture manufacturing facility, two distribution centers, a technical center, a sales office and an administrative office in the PRC. The Company also has a purchasing office in Singapore. A joint venture manufacturing facility, in Vietnam, is expected to become operational in 2020 as a result of the joint venture contract signed by Cooper Vietnam and Sailun Vietnam in December 2018. In Latin America, the Company has a joint venture manufacturing facility, an administrative office, three sales offices and a distribution center.
Additional information on the Company’s foreign operations can be found in the “Business Segments” note to the consolidated financial statements.
Available Information
The Company makes available free of charge, on or through its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the U.S. Securities and Exchange Commission (“SEC”) (https://www.sec.gov). The Company’s internet address is http://www.coopertire.com. The Company has adopted charters for each of its Audit, Compensation and Nominating and Governance Committees, corporate governance guidelines and a code of conduct, which are available on the Company’s

-6-


website and will be available to any stockholder who requests them from the Company’s Investor Relations department. The information contained on or accessible through the Company’s website is not incorporated by reference in this annual report on Form 10-K and should not be considered a part of this report.

-7-


EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and all positions and offices held by all executive officers of the Company as of December 31, 2018 are as follows:
Name
Age
Executive Office Held
Business Experience
John J. Bollman
61
Senior Vice President and Chief Human Resources Officer
Senior Vice President and Chief Human Resources Officer since March 2017. Previously Chief Human Resources Officer of Sequa Corporation, a global firm that provides manufacturing support to gas turbine engine makers, from 2008 to March 2017; Vice President of Human Resources, North America of Whirlpool Corporation, a global home appliance manufacturing company, from 2000 to 2008.
Christopher J. Eperjesy
50
Senior Vice President and Chief Financial Officer
Senior Vice President, Chief Financial Officer since December 2018. Previously Chief Financial Officer of the IMAGINE Group, a provider of marketing products, from August 2017 to December 2018; Chief Financial Officer of Arctic Cat, an all-terrain vehicle manufacturer, from 2015 to 2017; and Vice President - Finance, Chief Financial Officer, Treasurer and Secretary of Twin Disc, an off-highway power transmission equipment manufacturer, from 2002 to 2015.
Bradley E. Hughes
57
President, Chief Executive Officer and Director
President, Chief Executive Officer and Director since September 2016. Senior Vice President and Chief Operating Officer from January 2015 to September 2016. Senior Vice President and President-International Tire Operations from July 2014 to January 2015. Senior Vice President and Chief Financial Officer from September 2014 to December 2014. Senior Vice President, Chief Financial Officer and Treasurer from July 2014 to September 2014. Vice President, Chief Financial Officer and Treasurer from November 2013 to July 2014. Vice President and Chief Financial Officer from November 2009 to November 2013.
Stephen Zamansky
48
Senior Vice President, General Counsel and Secretary
Senior Vice President, General Counsel and Secretary since July 2014. Vice President, General Counsel and Secretary from April 2011 to July 2014. Previously Senior Vice President, General Counsel & Secretary of Trinity Coal Corporation, a privately held mining company, from 2008 to March 2011. Trinity was acquired by the Essar Group in 2010 and commenced bankruptcy proceedings in March 2013.

-8-


Item 1A.
RISK FACTORS
Some of the more significant risk factors related to the Company follow:
Pricing volatility for raw materials or commodities or an inadequate supply of key raw materials could result in increased costs and may significantly affect the Company’s profitability.
The pricing volatility for natural rubber, petroleum-based materials and other raw materials contributes to the difficulty in managing the costs of raw materials. Costs for certain raw materials used in the Company’s operations, including natural rubber, chemicals, carbon black, steel reinforcements and synthetic rubber remain highly volatile. Increasing costs for raw material supplies will increase the Company’s production costs and affect its margins if the Company is unable to pass the higher production costs on to its customers in the form of price increases. Even if the Company is able to pass along these higher costs, its profitability may be adversely affected until it is able to do so. Decreasing costs for raw materials could also affect margins if the Company is unable to maintain its pricing structure due to the need to offer price reductions to remain competitive. Further, if the Company is unable to obtain adequate supplies of raw materials in a timely manner for any reason, its operations could be interrupted or otherwise adversely affected.
The Company is facing heightened risks due to the uncertain business environment.
Current global economic conditions may affect demand for the Company’s products, create volatility in raw material costs and affect the availability and cost of credit. These conditions also affect the Company’s customers and suppliers as well as the ultimate consumer.
Deterioration in the global macroeconomic environment or in specific regions could impact the Company and, depending upon the severity and duration of these factors, the Company’s profitability and liquidity position could be negatively impacted.
The Company’s competitors may also change their actions as a result of changes to the business environment, which could result in increased price competition and discounts, resulting in lower margins or reduced sales volumes for the business.
In addition, the bankruptcy, restructuring, consolidation or other cooperation of one or more of the Company’s major customers or suppliers, as well as the strategic actions of competitors, could result in the write-off of accounts receivable, a reduction in purchases of the Company’s products or a supply disruption to its facilities, which could harm the Company’s results of operations, financial condition and liquidity.
The Company’s results could be impacted by changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments on imported tires, raw materials or equipment used in tire manufacturing.
The Company’s ability to competitively source and sell tires can be significantly impacted by changes in tariffs, changes or repeals of trade agreements, including withdrawal from or material modifications to NAFTA, including the implementation of the USMCA, or certain other international trade agreements, or other trade restrictions or retaliatory actions imposed by various governments. Other effects, including impacts on the price of tires, responsive actions from governments and the opportunity for competitors to establish a presence in markets where the Company participates, could also have significant impacts on the Company’s results.
For example, antidumping and countervailing duty investigations into certain passenger car and light truck tires imported from the PRC into the United States were initiated on July 14, 2014. The determinations announced in both investigations were affirmative and resulted in the imposition of significant additional duties from each.
Antidumping and countervailing duty investigations into certain truck and bus tires imported from the PRC into the U.S. were initiated on January 29, 2016. The preliminary determinations announced in both investigations were affirmative and resulted in the imposition of significant additional duties from each. On February 22, 2017, the International Trade Commission ("ITC") made a final determination that the U.S. market had not suffered material injury because of imports of truck and bus tires from China. As a result of this decision, preliminary antidumping and countervailing duties from Chinese truck and bus tires imported subsequent to the preliminary determination were not collected and any amounts previously paid were refunded. On April 14, 2017, the United Steelworkers Union filed a civil action challenging the ITC's decision not to impose duties on truck and bus tires from China imported into the U.S. and that case is still pending. On November 1, 2018, the Court of International Trade (“CIT”) remanded the case back to the ITC for reconsideration.  On January 30, 2019, the ITC reversed its earlier decision and made an affirmative determination of material injury, which started the process for the imposition of duties on Chinese truck and bus tire imports. Duties will be collected after the determination is published in the Federal Register. The ITC’s re-determination, along with comments from the parties regarding the re-determination, are due to the CIT by April 15, 2019. The CIT will then make a final determination.

-9-


Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, passenger, light truck and truck and bus tires, raw materials and tire-manufacturing equipment from the PRC imported into the U.S. became subject to additional 10 percent duties effective September 24, 2018. These duties are scheduled to increase to 25 percent effective March 2, 2019, unless the current negotiations between the U.S. and China result in a trade agreement, which could impact the future duty percentage. Retaliatory duties on U.S. products have been implemented in response to these additional duties by China. In addition, depending on the outcome of the Section 232 National Security Investigation of Automobiles, Including Cars, SUVs, Vans and Light Trucks, and Automotive Parts, passenger car and light truck tires imported into the U.S. may be subject to an additional duty.
The imposition of additional duties or other trade restrictions in the U.S. or elsewhere on raw materials or tire-manufacturing equipment used by the Company or on certain tires imported from the PRC or other countries will result in higher costs and potentially lower margins, or in the case of finished goods, in those tires being diverted to other regions of the world, such as Europe, Latin America or elsewhere in Asia, which could materially harm the Company’s results of operations, financial condition and liquidity.
The Company’s industry is highly competitive, and the Company may not be able to compete effectively with lower-cost producers and larger competitors.
The tire industry is a highly competitive, global industry. Some of the Company’s competitors are larger companies with greater financial resources. Intense competitive activity in the replacement tire industry, including consolidation or other cooperation by and among the Company's competitors, has caused, and will continue to cause, pressures on the Company’s business, as well as pressure on certain of the Company's customers, suppliers or distribution network. As the Company increases its presence in the original equipment market, the demand for products by the OEM's will be impacted by automotive vehicle production. The Company’s ability to compete successfully will depend in part on its ability to balance capacity with demand, leverage global purchasing of raw materials, make required investments to improve productivity, eliminate redundancies and increase production at low-cost, high-quality supply sources. If the Company is unable to offset continued pressures with improved operating efficiencies, its sales, margins, operating results and market share would decline and the impact could become material on the Company’s earnings.
The Company is facing supply risks related to certain tires it purchases from PCT.
In 2014, the Company sold its ownership interest in PCT and entered into off-take agreements with PCT to provide the continuous supply of certain TBR and passenger car tires for the Company through mid-2018. The agreements have been extended and now expire in mid-2020. If there are any disruptions in or quality issues with the supply of TBR products from PCT, it could have a material negative impact on the Company’s business. The Company is actively pursuing options to ensure the uninterrupted supply of these tires to meet the demands of the business beyond the terms of the PCT off-take agreements, including sourcing through GRT, an off-take agreement with Sailun Vietnam and the recently announced joint venture between Cooper Vietnam and Sailun Vietnam, which is expected to begin producing tires in 2020, but there can be no assurance that the Company will be able to do so in a timely manner.
If the Company fails to develop technologies, processes or products needed to keep up with rapidly evolving distribution channels and to support consumer demand or, changes in consumer behavior, it may lose significant market share or be unable to recover associated costs.
The Company’s tire sales, margins and profitability may be significantly impacted if it does not develop or have available technologies, processes, including distribution methods, or products that competitors may be developing and consumers or dealers are demanding. This includes, but is not limited to, changes in the design of and materials used to manufacture tires, changes in the types of tires consumers desire and changes in the vehicles consumers are purchasing. Additionally, the Company is also impacted by changes in the way consumers buy tires and failure to effectively compete in various sales and marketing channels, including digital channels and others in which the Company has been less active in the past, such as through mass merchandisers, which have negotiating leverage and costs associated with their operating procedures that are unique to their needs.
Technologies or processes may also be developed by competitors that better distribute tires to consumers, including through wholly-owned distributors, which could affect the Company’s customers and implementation of its strategic plan.
An increase in consumer preference for car- and ride-sharing services, as opposed to automobile ownership, may result in a long term reduction in the number of vehicles per capita. Additionally, refreshing existing products and developing new products and technologies requires significant investment and capital expenditures, is technologically challenging and requires extensive testing and accurate anticipation of technological and market trends. If the Company fails to develop new products that are appealing to its customers, or fails to develop products on time and within budgeted amounts, the Company may be

-10-


unable to recover its product development and testing costs. If the Company cannot successfully use new production or equipment methodologies it invests in, it may also not be able to recover those costs.
If assumptions used in developing the Company’s strategic plan are inaccurate or the Company is unable to execute its strategic plan effectively, its profitability and financial position could be negatively impacted.
The Company faces both general industry and company-specific challenges. These include volatile raw material costs, increasing product complexity and pressure from competitors with greater resources or manufacturing in lower-cost regions. To address these challenges and position the Company for future success, the Company continues to execute towards strategic imperatives outlined in its Strategic Plan. The three strategic imperatives are building a sustainable cost competitive position, driving top-line profitable growth and building organizational capabilities and enablers to support strategic goals.
The Company continually reviews and updates its business plans to achieve these imperatives. If the assumptions used in developing the Company’s business plans vary significantly from actual conditions, the Company’s sales, margins and profitability could be harmed. If the Company is unsuccessful in implementing the tactics necessary to execute its business plans, it may not be able to achieve or sustain future profitability, which could impair its ability to meet debt and other obligations and could otherwise negatively affect its operating results, financial condition and liquidity.
The Company may not be successful in executing and integrating investments and acquisitions into its operations, which could harm its results of operations and financial condition.
The Company routinely evaluates potential investments and acquisitions and may pursue additional investment and acquisition opportunities, some of which could be material to its business. The Company cannot provide assurance whether it will be successful in pursuing and integrating any investment or acquisition opportunities or what the consequences of any investment or acquisition would be. The Company may encounter various risks in any investment or acquisition, including:
the possible inability to integrate an acquired business into its operations;
diversion of management’s attention;
loss of key management personnel;
unanticipated problems or liabilities;
potential asset impairment charges, including goodwill, due to inability to meet operating plans; and
increased labor and regulatory compliance costs of acquired businesses.
Some or all of those risks could impair the Company’s results of operations and impact its financial condition. The Company may finance any future investments or acquisitions from internally generated funds, bank borrowings, public offerings or private placements of equity or debt securities, or a combination of the foregoing. Investments and acquisitions may involve the expenditure of significant funds and management time.
Investments and acquisitions may also require the Company to increase its borrowings under its bank credit facilities or other debt instruments, or to seek new sources of liquidity. Increased borrowings would correspondingly increase the Company’s financial leverage, and could result in lower credit ratings and increased future borrowing costs. These risks could also reduce the Company’s flexibility to respond to changes in its industry or in general economic conditions.
In addition, the Company’s business plans call for growth. If the Company is unable to identify or execute on appropriate opportunities for acquisition, investment or growth, its business could be materially adversely affected.
The Company has and could in the future incur restructuring charges and other costs as it continues to execute actions in an effort to improve future profitability and competitiveness and may not achieve the anticipated savings and benefits from these actions.
The Company has and may in the future initiate restructuring actions designed to improve future profitability and competitiveness, and enhance the Company’s flexibility, including the outcome of the recently announced restructuring in the U.K., as well as potential future outcomes from the Company's ongoing region by region global footprint assessment. The Company may not realize anticipated savings or benefits from the U.K. action, or future actions, in full or in part or within the time periods it expects. The Company is also subject to the risks of labor unrest, negative publicity and business disruption in connection with these actions. Failure to realize anticipated savings or benefits from the Company’s actions could have an adverse effect on the business and could result in potential unexpected costs or other impacts. Such restructuring actions and impairments or other charges could have a significant negative effect on the Company’s earnings or cash flows in the short-term.
Any interruption in the Company’s skilled workforce, or that of its suppliers or customers, including labor disruptions, could impair its operations and harm its earnings and results of operations.

-11-


The Company’s operations depend on maintaining a skilled workforce and any interruption of its workforce due to shortages of skilled technical, production or professional workers, work disruptions, or other events could interrupt the Company’s operations and affect its operating results. Competition for these employees is intense and the Company could experience difficulty in hiring and retaining the personnel necessary to support its business. Further, a significant number of the Company’s employees are currently represented by unions. If the Company is unable to resolve any labor disputes or if there are work stoppages or other work disruptions at the Company or any of its suppliers or customers, the Company’s business and operating results could suffer. See also related comments under “The Company is facing supply risks related to certain tires it purchases from PCT.”
If the Company is unable to attract and retain key personnel, its business could be materially adversely affected.
The Company’s business depends on the continued service of key members of its management. The loss of the services of a significant number of members of its management team could have a material adverse effect on its business. The Company’s future success will also depend on its ability to attract, retain and develop highly skilled personnel, such as engineering, marketing, information technology and senior management professionals. Competition for these employees is intense and the Company could experience difficulty in hiring and retaining the personnel necessary to support its business. If the Company does not succeed in retaining its current employees and attracting new high-quality employees, its business could be materially adversely affected.
The Company has a risk due to volatility of the capital and financial markets.
The Company periodically requires access to the capital and financial markets as a significant source of liquidity for maturing debt payments, including the Company's unsecured notes due in December 2019, or working capital needs or investments in the business that it cannot satisfy by cash on hand or operating cash flows. Substantial volatility in world capital markets and the banking industry may make it difficult for the Company to access credit markets and to obtain financing or refinancing, as the case may be, on satisfactory terms or at all. In addition, various additional factors, including a deterioration of the Company’s credit ratings or its business or financial condition, could further impair its access to the capital markets and bank financings. Additionally, any inability to access the capital markets or bank financings, including the ability to refinance existing debt when due, could require the Company to defer critical capital expenditures, reduce or not pay dividends, reduce spending in areas of strategic importance, suspend stock repurchases, sell important assets or, in extreme cases, seek protection from creditors. See also related comments under “There are risks associated with the Company’s global strategy, which includes using joint ventures and partially-owned subsidiaries.”
The Company’s operations in Asia have been or will be financed in part using multiple loans from several lenders to finance working capital needs. These loans are generally for terms of one year or less. Therefore, debt maturities occur frequently and access to the capital markets and bank financings is crucial to the Company’s ability to maintain sufficient liquidity to support its operations in Asia.
Increases in interest rates or changes in credit ratings may negatively impact the Company.
Certain of the Company's variable rate debt, including its revolving credit facility, currently uses LIBOR as a benchmark for establishing the interest rate. LIBOR is the subject of recent proposals for reform. These reforms and other pressures may cause LIBOR to disappear entirely or to perform differently than in the past. The consequences of these developments with respect to LIBOR cannot be entirely predicted but could result in an increase in the cost of variable rate debt. The interest rates under on the Company's term loans and revolving credit facilities can vary based on the Company's credit ratings. The Company's policy is to manage interest rate risk by entering into both fixed and variable rate debt arrangements. Interest rate swaps are also used to minimize worldwide financing cost and to achieve a desired mix of fixed and variable rate debt. The Company utilizes derivative financial instruments to enhance its ability to manage risk, including interest rate exposures that exist as part of ongoing business operations. The company does not enter into contracts for trading purposes, nor is it a party to any leveraged derivative instruments. The use of derivative financial instruments is monitored through regular communication with senior management and the utilization of written guidelines. However, the Company's use of these instruments may not effectively limit or eliminate exposure to changes in interest rates. Therefore, the Company cannot provide assurance that future credit rating or interest rate changes will not have a material negative impact on its business, financial position or operating results.
A disruption in, or failure of, the Company’s information technology systems, including those related to cybersecurity, could adversely affect the Company’s business operations and financial performance.
The Company relies on the accuracy, capacity and security of its information technology systems across all of its major business functions, including its research and development, manufacturing, sales, financial and administrative functions. While the Company maintains some of its critical information technology systems, it is also dependent on third parties to provide important information technology services relating to, among other things, human resources, electronic communications and certain finance functions. Additionally, the Company collects and stores sensitive data, including intellectual property,

-12-


proprietary business information and the proprietary business information of its customers and suppliers, as well as personally identifiable information of the Company’s customers and employees, in data centers and on information technology networks. In addition, the European Union’s General Data Protection Regulation (“GDPR”), which came into effect in May 2018, creates a range of new compliance obligations for companies that process personal data of European Union residents, and increases financial penalties for non-compliance. As a company that processes personal data of European Union residents, we bear the costs of compliance with the GDPR and are subject to the potential for fines and penalties in the event of a breach of the GDPR. Aside from the European Union, other jurisdictions have enacted, or are considering, regulations regarding data privacy. Despite the security measures that the Company has implemented, including those related to cybersecurity, its systems could be breached or damaged by computer viruses, natural or man-made incidents or disasters or unauthorized physical or electronic access. Furthermore, the Company may have little or no oversight with respect to security measures employed by third-party service providers, which may ultimately prove to be ineffective at countering threats. A system failure, accident or security breach could result in business disruption, theft of its intellectual property, trade secrets or customer information and unauthorized access to personnel information. To the extent that any system failure, accident or security breach results in disruptions to its operations or the theft, loss or disclosure of, or damage to, its data or confidential information, the Company’s reputation, business, results of operations, cash flows and financial condition could be materially adversely affected. In addition, the Company may be required to incur significant costs to protect against and, if required, remediate the damage caused by such disruptions or system failures in the future.
The Company may be adversely affected by legal actions, including product liability claims which, if successful, could have a negative impact on its financial position, cash flows and results of operations.
The Company’s operations expose it to legal actions, including potential liability for personal injury or death as an alleged result of the failure of or conditions in the products that it designs, manufactures and sells. Specifically, the Company is a party to a number of product liability cases in which individuals involved in motor vehicle accidents seek damages resulting from allegedly defective tires that it manufactured. Product liability claims and lawsuits, including possible class action, may result in material losses in the future and cause the Company to incur significant litigation defense costs. The Company is largely self-insured against these claims. These claims and related reserves could have a significant effect on the Company’s financial position, cash flows and results of operations.
From time to time, the Company is also subject to audits, litigation or other commercial disputes and other legal proceedings relating to its business. Due to the inherent uncertainties of any litigation, commercial disputes or other legal proceedings, the Company cannot accurately predict their ultimate outcome, including the outcome of any related appeals. An unfavorable outcome could materially adversely impact the Company’s financial condition, cash flows and results of operations.
The Company conducts its manufacturing, sales and distribution operations on a worldwide basis and is subject to risks associated with doing business outside the U.S.
The Company has affiliate, subsidiary and joint venture operations worldwide, including in the U.S., Europe, Mexico and the PRC. The Company has a wholly-owned manufacturing entity, Cooper Kunshan Tire, and is the majority owner of GRT, both in the PRC. The Company also is the majority owner of COOCSA, a manufacturing entity in Mexico, and has established operations in Serbia and the U.K. PCT, located in the PRC, is currently a supplier of TBR tires for the Company and the Company entered into an off-take agreement with Sailun Vietnam, located in Vietnam, for the supply of TBR tires. Additionally, the Company recently announced a joint venture between Cooper Vietnam and Sailun Vietnam, which is expected to begin producing tires in 2020. There are a number of risks in doing business abroad, including political and economic uncertainty, social unrest, sudden changes in laws and regulations, ability to enforce existing or future contracts, shortages of trained labor and the uncertainties associated with entering into joint ventures or similar arrangements in foreign countries. These risks may impact the Company’s ability to expand its operations in different regions and otherwise achieve its objectives relating to its foreign operations, including utilizing these locations as suppliers to other markets. In addition, compliance with multiple and potentially conflicting foreign laws and regulations, import and export limitations and exchange controls is burdensome and expensive. For example, the Company could be adversely affected by violations of the Foreign Corrupt Practices Act (“FCPA”) and similar worldwide anti-bribery laws as well as export controls and economic sanction laws. The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials and, in some cases, other persons, for the purpose of obtaining or retaining business or obtaining another improper benefit. Violations of these laws and regulations could result in civil and criminal fines, penalties and sanctions against the Company, its officers or its employees, prohibitions on the conduct of the Company’s business and on its ability to offer products and services in one or more countries, and could also harm the Company’s reputation, business and results of operations. The Company’s foreign operations also subject it to the risks of international terrorism and hostilities and to foreign currency risks, including exchange rate fluctuations and limits on the repatriation of funds. See also related comments under "The Company’s results could be impacted by changes in tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments on imported tires or raw materials", "There are risks associated with the Company’s

-13-


global strategy, which includes using joint ventures and partially-owned subsidiaries" and "The results of the United Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets or the Company’s business."

There are risks associated with the Company’s global strategy, which includes using joint ventures and partially-owned subsidiaries.
The Company’s strategy includes the use of joint ventures and other partially-owned subsidiaries, including the recently announced Vietnam joint venture with Sailun Vietnam. These entities operate in countries outside of the U.S., are generally less well capitalized than the Company and bear risks similar to the risks of the Company. In addition, there are specific risks applicable to these subsidiaries and these risks, in turn, add potential risks to the Company. Such risks include greater risk of joint venture partners or other investors failing to meet their obligations under related stockholders’ agreements; conflicts with joint venture partners; the possibility of a joint venture partner taking valuable knowledge from the Company; and risk of being denied access to the capital markets, which could lead to resource demands on the Company in order to maintain or advance its strategy. The Company’s outstanding notes and primary credit facility contain cross default provisions in the event of certain defaults by the Company under other agreements with third parties. For further discussion of access to the capital markets, see also related comments under “The Company has a risk due to volatility of the capital and financial markets.”
The results of the United Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets or the Company’s business.
In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum. The U.K. is currently negotiating the terms of its exit from the European Union (“Brexit”) is currently scheduled for March 29, 2019. In November 2018, the U.K. and the European Union agreed upon a draft Withdrawal Agreement that sets out the terms of the U.K.’s departure, including commitments on citizen rights after Brexit, a financial settlement from the U.K., and a transition period from March 29, 2019 through December 31, 2020 to allow time for a future trade deal to be agreed. On January 15, 2019, the draft Withdrawal Agreement was rejected by the U.K. Parliament creating significant uncertainty about the terms and timing under which the U.K. will leave the European Union.
If the U.K. leaves the European Union with no agreement, it will likely have an adverse impact on labor and trade in addition to creating further short-term uncertainty and currency volatility. In the absence of a future trade deal, the U.K.’s trade with the European Union and the rest of the world would be subject to tariffs and duties set by the World Trade Organization. Additionally, the movement of goods between the U.K. and the remaining member states of the European Union will be subject to additional inspections and documentation checks, leading to possible delays at ports of entry and departure. These changes to the trading relationship between the U.K and European Union would likely result in increased cost of goods imported into and exported from the U.K. and may decrease the profitability of the Company's U.K. and other operations. Additional currency volatility could drive a weaker British pound, which increases the cost of goods imported into the U.K. operations and may decrease the profitability of the U.K. operations. A weaker British pound versus the U.S. dollar also causes local currency results of U.K. operations to be translated into fewer U.S. dollars during a reporting period. With a range of outcomes still possible, the impact from Brexit remains uncertain and will depend, in part, on the final outcome of tariff, trade, regulatory and other negotiations.
Compliance with legal and regulatory initiatives could increase the cost of operating the Company’s business.
The Company is subject to federal, state, local and foreign laws and regulations. Compliance with those laws now in effect, or that may be enacted, could require significant capital expenditures, increase the Company’s production costs and affect its earnings and results of operations. Periodic changes as the result of elections in the U.S. and worldwide make it difficult to predict the legislative and regulatory changes that may occur.
Several countries have or may implement labeling requirements for tires. This legislation could cause the Company’s products to be at a disadvantage in the marketplace resulting in a loss of market share or could otherwise impact the Company’s ability to distribute and sell its tires.
In addition, while the Company believes that its tires are free from design and manufacturing defects and comply with all applicable regulations and standards, it is possible that a recall of the Company’s tires could occur in the future. A recall could harm the Company’s reputation, operating results and financial position.
The Company is also subject to legislation governing labor, environmental, privacy and data protection, occupational safety and health both in the U.S. and other countries. The related legislation can change over time making it more expensive for the Company to produce its products.

-14-


The Company could also, despite its best efforts to comply with these laws and regulations, be found liable and be subject to additional costs because of these laws and regulations.
The Company may fail to successfully develop or implement information technologies or related systems, resulting in a significant competitive disadvantage.
Successfully competing in the highly competitive tire industry can be impacted by the successful development of information technology. If the Company fails to successfully develop or implement information technology systems, it may be at a disadvantage to its competitors resulting in lost sales and negative impacts on the Company’s earnings.
The Company has implemented Enterprise Resource Planning systems in the United States and other locations. The Company is evaluating its available options for integrating information technology solutions outside of the United States, which will require significant amounts of capital and human resources to deploy. These requirements may be significant and exceed Company projections. Throughout integration of the systems, there are also risks created to the Company’s ability to successfully and efficiently operate.
The Company’s expenditures for pension and other postretirement obligations could be materially higher than it has predicted if its underlying assumptions prove to be incorrect.
The Company provides defined benefit and hybrid pension plan coverage to union and non-union U.S. employees and a contributory defined benefit plan in the U.K. The Company’s pension expense and its required contributions to its pension plans are directly affected by the value of plan assets, the projected and actual rates of return on plan assets and the actuarial assumptions the Company uses to measure its defined benefit pension plan obligations, including the discount rate at which future projected and accumulated pension obligations are discounted to a present value and the inflation rate. The Company could experience increased pension expense due to a combination of factors, including the decreased investment performance of its pension plan assets, decreases in the discount rate, changes in its assumptions relating to the expected return on plan assets, updates to mortality tables and the impact of changes to the Company’s pension strategy. The Company could also experience increased other postretirement expense due to decreases in the discount rate, increases in the health care trend rate and changes in the health care environment.
In the event of declines in the market value of the Company’s pension assets or lower discount rates to measure the present value of pension and other postretirement benefit obligations, the Company could experience changes to its Condensed Consolidated Balance Sheet or significant cash requirements.
If the price of energy sources increases, the Company’s operating expenses could increase significantly or the demand for the Company’s products could be affected.
The Company’s manufacturing facilities rely principally on natural gas, as well as electrical power and other energy sources. High demand and limited availability of natural gas and other energy sources can result in significant increases in energy costs increasing the Company’s operating expenses and transportation costs. Higher energy costs would increase the Company’s production costs and adversely affect its margins and results of operations. If the Company is unable to obtain adequate sources of energy, its operations could be interrupted.
In addition, if the price of gasoline increases significantly for consumers, it can affect driving and purchasing habits and impact demand for tires.
The realizability of deferred tax assets may affect the Company’s profitability and cash flows.
The Company has significant net deferred tax assets recorded on the balance sheet and determines at each reporting period whether or not a valuation allowance is necessary based upon the expected realizability of such deferred tax assets. In the U.S., the Company has recorded deferred tax assets, the largest of which relate to product liability, pension and other postretirement benefit obligations, partially offset by deferred tax liabilities, the most significant of which relates to accelerated depreciation. The Company’s non-U.S. deferred tax assets relate to pension, accrued expenses and net operating losses, and are partially offset by deferred tax liabilities related to accelerated depreciation. Based upon the Company’s assessment of the realizability of its net deferred tax assets, the Company maintains a valuation allowance in the U.K., as well as a small valuation allowance for the portion of its U.S. deferred tax assets primarily associated with a loss carryforward. In addition, the Company has recorded valuation allowances for deferred tax assets primarily associated with other non-U.S. net operating losses.
The Company’s assessment of the realizability of deferred tax assets is based in part on certain assumptions regarding future profitability, and potentially adverse business conditions could have a negative impact on the future realizability of the deferred tax assets and therefore impact the Company’s future operating results or financial position.

-15-


Compliance with and changes in tax laws, including recently enacted tax reform legislation in the United States, could materially and adversely impact our financial condition, results of operations and cash flows.
The Company is subject to extensive tax liabilities, including federal and state income taxes and transactional taxes such as excise, sales and use, payroll, franchise, withholding and property taxes. New tax laws and regulations and changes in existing tax laws and regulations could result in increased expenditures by the Company for tax liabilities in the future and could materially and adversely impact the Company's financial condition, results of operations and cash flows.
Recently enacted tax reform legislation has made substantial changes to U.S. tax law, including a reduction in the corporate tax rate, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate expensing of capital expenditures and deemed repatriation of foreign earnings. The Company expects this legislation to have significant effects, some of which may be adverse. For example, the reduction in the corporate tax rate has resulted in a reduction in the value of the Company's existing deferred tax assets, and consequently was a charge to earnings in 2017.
Additionally, the Company’s income tax returns are subject to examination by federal, state and local tax authorities in the U.S. and tax authorities outside the U.S. Based upon the outcome of tax examinations, judicial proceedings, or expiration of statutes of limitations, it is possible that the ultimate resolution of these unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities. Such factors could have an adverse effect on the Company’s provision for income taxes and the cash outlays required to satisfy income tax obligations.
Environmental issues, including climate change, or legal, regulatory or market measures to address environmental issues, may negatively affect the Company's business and operations and cause it to incur significant costs.
The Company’s manufacturing facilities are subject to numerous federal, state, local and foreign laws and regulations designed to protect the environment, including increased government regulations to limit carbon dioxide and other greenhouse gas emissions as a result of concern over climate change, and the Company expects that additional requirements with respect to environmental matters will be imposed on it in the future.
There is also growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. In the event that issues related to such climate change have a negative effect on the Company's business, it may be subjected to decreased availability or less favorable pricing for certain raw materials, including natural rubber. Natural disasters and extreme weather conditions may also disrupt the productivity of the Company's facilities or the operation of its supply chain.
In addition, the Company has contractual indemnification obligations for environmental remediation costs and liabilities that may arise relating to certain divested operations. Material future expenditures may be necessary if compliance standards change, if material unknown conditions that require remediation are discovered, or if required remediation of known conditions becomes more extensive than expected. If the Company fails to comply with present and future environmental laws and regulations, it could be subject to future liabilities or the suspension of production, which could harm its business or results of operations. Environmental laws could also restrict the Company’s ability to expand its facilities or could require it to acquire costly equipment or to incur other significant expenses in connection with its manufacturing processes.
The Company has been and may continue to be impacted by currency fluctuations, which may reduce reported results for the Company’s international operations and otherwise adversely affect the business.
Because the Company conducts transactions in various non-U.S. currencies, including the Euro, Canadian dollar, British pound sterling, Swiss franc, Swedish kronar, Norwegian krone, Mexican peso, Chinese yuan, Serbian dinar and Brazilian real, fluctuations in foreign currency exchange rates may impact the Company’s financial condition, results of operations and cash flows, despite currency hedging actions by the Company. The Company’s operating results are subject to the effects of fluctuations in the value of these currencies and fluctuations in the related currency exchange rates. As a result, the Company’s sales have historically been affected by, and may continue to be affected by, these fluctuations. Exchange rate movements between currencies in which the Company sells its products have been affected by and may continue to result in exchange losses that could materially affect results. During times of strength of the U.S. dollar, the reported revenues of the Company’s international operations will be reduced because local currencies will translate into fewer dollars. In addition, a strong U.S. dollar may increase the competitiveness of competitors based outside of the United States. As a result, continued strengthening of the U.S. dollar may have a material adverse effect on the Company’s financial condition, results of operations and cash flows. A weak U.S. dollar could increase the cost of goods imported into the Company's U.S. operations and other goods imported in U.S. dollars at other locations and may decrease the profitability of the Company's operations. As a result, continued weakening of the U.S. dollar may have a material adverse effect on the Company’s financial condition, results of operations and cash flows.

-16-


The Company may not be able to protect its intellectual property rights adequately.
The Company’s success depends in part upon its ability to use and protect its proprietary technology and other intellectual property, which generally covers various aspects in the design and manufacture of its products and processes. The Company owns and uses tradenames and trademarks worldwide. The Company relies upon a combination of trade secrets, confidentiality policies, nondisclosure and other contractual arrangements and patent, copyright and trademark laws to protect its intellectual property rights. The steps the Company takes in this regard may not be adequate to protect its intellectual property or to prevent or deter challenges or infringement or other violations of its intellectual property, and the Company may not be able to detect unauthorized use or take appropriate and timely steps to enforce its intellectual property rights.
In addition, the laws of some countries may not protect and enforce the Company’s intellectual property rights to the same extent as the laws of the U.S. Further, while the Company believes it has rights to use all intellectual property in the Company’s use, if the Company is found to infringe on the rights of others it could be adversely impacted.
The impact of proposed new accounting standards may have a negative impact on the Company’s financial statements.
The Financial Accounting Standards Board is considering or has issued for future adoption several projects which may result in the modification of accounting standards affecting the Company. Any such changes could have a negative impact on the Company’s financial statements.
The Company is facing risks relating to healthcare legislation.
The Company is facing risks emanating from legislation in the U.S., including the Patient Protection and Affordable Care Act and the related Healthcare and Education Reconciliation Act, which are collectively referred to as healthcare legislation. The future of this major legislation and any replacement is now in question and the ultimate cost and the potentially adverse impact to the Company and its employees cannot be quantified at this time.

Item 1B.
UNRESOLVED STAFF COMMENTS
None.
Item 2.
PROPERTIES
As shown in the following table, at December 31, 2018, the Company maintained 55 manufacturing facilities, distribution centers, retail stores, technical centers and office facilities worldwide. A majority of the manufacturing facilities are wholly-owned by the Company. Some manufacturing, distribution and office facilities are leased.
 
 
Americas Tire Operations
 
 
International Tire Operations
 
 
 
Type of Facility
 
North America
 
Latin America
 
 
Europe
 
Asia
 
 
Total
Manufacturing
 
4

 
1

 
2

 
2

 
9

Distribution centers
 
12

 
1

  
 
7

 
2

 
 
22

Retail stores
 
3

 

  
 

 

 
 
3

Technical centers and offices
 
7

 
4

  
 
6

 
4

 
 
21

Total
 
26

 
6

  
 
15

 
8

 
 
55

*
This includes a manufacturing facility that is a joint venture.
The Company believes its properties have been adequately maintained, generally are in good condition and are suitable and adequate to meet the demands of each segment’s business.

-17-


Item 3.
LEGAL PROCEEDINGS
The Company is a defendant in various judicial proceedings arising in the ordinary course of business. A significant portion of these proceedings are product liability cases in which individuals involved in motor vehicle accidents seek damages resulting from allegedly defective tires manufactured by the Company. After reviewing all of these proceedings, and taking into account all relevant factors concerning them, the Company does not believe that any liabilities resulting from these proceedings are reasonably likely to have a material adverse effect on its liquidity, financial condition or results of operations in excess of amounts recorded at December 31, 2018. In the future, such costs could have a materially greater impact on the consolidated results of operations and financial position of the Company than in the past.

-18-


Item 4.
MINE SAFETY DISCLOSURES
None.

-19-


PART II
Item 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
(a)
Market information
Cooper Tire & Rubber Company common stock is traded on the New York Stock Exchange under the symbol CTB.
Five-Year Stockholder Return Comparison
The SEC requires that the Company include in its annual report to stockholders a line graph presentation comparing cumulative five-year stockholder returns on an indexed basis with the Standard & Poor’s (“S&P”) Stock Index and either a published industry or line-of-business index or an index of peer companies selected by the Company. In 1993, the Company chose what is now the S&P 500 Auto Parts & Equipment Index as the most appropriate of the nationally recognized industry standards and has used that index for its stockholder return comparisons in all of its annual reports since that time.
The following chart assumes three hypothetical $100 investments on December 31, 2013, and shows the cumulative values at the end of each succeeding year resulting from appreciation or depreciation in the stock market price, assuming dividend reinvestment.
Total Return To Shareholders
(Includes reinvestment of dividends)
 
 
ANNUAL RETURN PERCENTAGE
Year Ended December 31,
Company / Index
 
2014
 
2015
 
2016
 
2017
 
2018
Cooper Tire & Rubber Company
 
46.32

 
10.42

 
3.86

 
(7.95
)
 
(7.24
)
S&P 500 Index
 
13.69

 
1.38

 
11.96

 
21.83

 
(4.38
)
S&P 500 Auto Parts & Equipment
 
3.68

 
(5.65
)
 
(2.21
)
 
47.52

 
(27.93
)
 
 
Base
Period
 
INDEXED RETURNS
Year Ended December 31,
Company / Index
 
2013
 
2014
 
2015
 
2016
 
2017
 
2018
Cooper Tire & Rubber Company
 
$
100.00

 
$
146.32

 
$
156.74

 
$
160.60

 
$
152.65

 
$
145.41

S&P 500 Index
 
100.00

 
113.69

 
115.07

 
127.03

 
148.86

 
144.48

S&P 500 Auto Parts & Equipment
 
100.00

 
103.68

 
98.03

 
95.82

 
143.34

 
115.41


-20-


chart-f5262c48c274550b9e1.jpg

-21-


(b)
Holders
The number of holders of record at December 31, 2018 was 1,650.
(c)    Dividends
The Company has paid consecutive quarterly dividends on its common stock since 1973.
(d)    Issuer purchases of equity securities
During the quarter ended December 31, 2018, the Company did not purchase any equity securities registered by the Company pursuant to Section 12 of the Securities Exchange Act of 1934.
 
 
 
 
 
 
 
 
 
On February 16, 2017, the Board of Directors increased the amount under and expanded the duration of the Company's existing share repurchase program (as amended, the "2017 Repurchase Program"). The 2017 Repurchase Program allows the Company to repurchase up to $300,000,000, excluding commissions, of the Company’s common stock through December 31, 2019. The approximately $95,634,000 remaining authorization under the Company's existing share repurchase program as of February 16, 2017 is included in the $300,000,000 maximum amount authorized by the 2017 Repurchase Program. No other changes were made. The 2017 Repurchase Program does not obligate the Company to acquire any specific number of shares and can be suspended or discontinued at any time without notice. Shares can be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. All repurchases under the programs listed above have been made using cash resources.

-22-


Item 6.
SELECTED FINANCIAL DATA
(Dollar amounts in thousands except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
2018 (a)
 
2017 (b)
 
2016
 
2015
 
2014 (h)
Net sales
 
$
2,808,062

 
$
2,854,656

 
$
2,924,869

 
$
2,972,901

 
$
3,424,809

Operating profit (c)
 
$
165,245

 
$
309,247

 
$
437,458

 
$
399,305

 
$
337,612

Income before income taxes
 
$
114,058

 
$
243,925

 
$
367,093

 
$
334,028

 
$
348,519

Net income attributable to Cooper Tire & Rubber Company
 
$
76,586

 
$
95,400

 
$
248,381

 
$
212,766

 
$
213,578

Earnings per share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
1.52

 
$
1.83

 
$
4.56

 
$
3.73

 
$
3.48

Diluted
 
$
1.51

 
$
1.81

 
$
4.51

 
$
3.69

 
$
3.42

Dividends per share
 
$
0.42

 
$
0.42

 
$
0.42

 
$
0.42

 
$
0.42

Weighted average shares outstanding (000s):
 
 
 
 
 
 
 
 
 
 
Basic
 
50,350

 
52,206

 
54,480

 
57,012

 
61,402

Diluted
 
50,597

 
52,673

 
55,090

 
57,623

 
62,401

Property, plant and equipment, net
 
$
1,001,921

 
$
966,747

 
$
864,227

 
$
795,198

 
$
740,203

Total assets (d), (e), (f)
 
$
2,634,205

 
$
2,707,925

 
$
2,731,677

 
2,550,203

 
$
2,600,962

Long-term debt (f)
 
$
121,284

 
$
295,987

 
$
297,094

 
$
296,412

 
$
297,937

Total equity
 
$
1,232,443

 
$
1,185,756

 
$
1,130,236

 
$
1,017,611

 
$
884,261

Capital expenditures
 
$
193,299

 
$
197,186

 
$
175,437

 
$
182,544

 
$
145,041

Depreciation and amortization
 
$
147,161

 
$
140,228

 
$
130,257

 
$
121,408

 
$
139,166

Number of employees (g)
 
9,027

 
9,204

 
9,149

 
8,027

 
7,823

(a)
The Company recorded a non-cash goodwill impairment charge of $33,827 in 2018.
(b)
The Company recorded $35,378 of deemed repatriation tax and $20,413 for the re-measurement of deferred tax assets in conjunction with U.S. tax reform, as well as a U.K. valuation allowance charge of $18,915, less the reversal of an Asia valuation allowance of $6,671 in 2017.
(c)
The non-service cost components of net periodic benefit cost were reclassified outside of operating profit to Other pension and postretirement benefit expense in the amount of $37,523, $53,071, $44,825 and $37,154 in 2017, 2016, 2015 and 2014, respectively, as a result of the adoption of Accounting Standards Update ("ASU") 2017-07 in 2018.
(d)
The Company has reclassified its volume and customer rebate program reserves from a contra-asset included within Accounts receivable to a liability within Accrued liabilities in the amount of $100,190, $93,783, $96,927, and $96,995 in 2017, 2016, 2015 and 2014, respectively, as a result of the adoption of Accounting Standards Codification ("ASC") 606 in 2018.
(e)
The Company has reclassified its voluntary employee beneficiary association trust from a reduction of accrued benefits within Accrued liabilities to restricted cash included within Other assets of $18,499, $17,100, and $15,030 in 2016, 2015 and 2014, respectively, as a result of the adoption of ASC 2016-18 in 2018.
(f)
Unamortized debt issuance costs associated with long-term debt have been reclassified from a noncurrent asset to a reduction of the carrying value of the debt liability upon the adoption of ASU 2015-03 in the amount of $994 in 2014.
(g)
The number of employees has been adjusted downward by 1,391, 1,092 and 1,058 in 2016, 2015 and 2014, respectively, to properly reflect members of the COOCSA joint venture workforce who are employed by an employment services company.
(h)
The Company sold its ownership interest in Cooper Chengshan (Shandong) Tire Company Ltd. during the fourth quarter of 2014. Results include a gain on sale of interest in subsidiary of $77,471. Income tax expense on the gain on sale of interest in subsidiary was $21,767.

-23-


Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Business of the Company
The Company specializes in the design, manufacture, marketing and sales of passenger car, light truck, TBR, motorcycle and racing tires. The Company’s products are sold globally, primarily in the replacement tire market to independent tire dealers, wholesale distributors, regional and national retail tire chains and large retail chains that sell tires as well as other automotive products.
The Company faces both general industry and company-specific challenges. These include volatile raw material costs, increasing product complexity and pressure from competitors who, in some cases, are larger companies with greater financial resources. To address these challenges and position the Company for future success, the Company continues to execute towards strategic imperatives outlined in its Strategic Plan. The three strategic imperatives outlined in the Strategic Plan are building a sustainable cost competitive position, driving top-line profitable growth and building organizational capabilities and enablers to support strategic goals.
The Company has operations in what are considered lower-cost countries. This includes the Cooper Kunshan Tire manufacturing operation in the PRC, joint venture manufacturing operations in Mexico and the PRC and a manufacturing facility in Serbia. Products from these operations provide a lower-cost source of tires for existing markets and have been used to expand the Company’s market share in Mexico and the PRC. Through a variety of other projects, the Company also has improved the competitiveness of its manufacturing operations in the United States.
On December 12, 2018, Cooper Vietnam, a wholly owned subsidiary of Cooper, and Sailun Vietnam entered into an equity joint venture contract to establish a joint venture in Vietnam which will produce and sell TBR tires. The new joint venture is expected to begin producing tires in 2020.
On January 17, 2019, Cooper Tire Europe, a wholly owned subsidiary of the Company, committed to a plan to cease light vehicle tire production at its Melksham, England facility. Light vehicle tire production is expected to be phased out over a period of approximately 10 months. An estimated 300 roles will be eliminated at the site. Cooper Tire Europe will obtain light vehicle tires to meet customer needs from other production sites within the Company’s global production network. Approximately 400 roles will remain in Melksham to support the functions that continue there, including motorsports and motorcycle tire production, the materials business, Cooper Tire Europe headquarters, sales and marketing, and the Europe Technical Center.
The following discussion of financial condition and results of operations should be read together with “Selected Financial Data,” the Company’s consolidated financial statements and the notes to those statements and other financial information included elsewhere in this report.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) presents information related to the consolidated results of the operations of the Company, a discussion of past results of the Company’s segments, future outlook for the Company and information concerning the liquidity, capital resources and critical accounting policies of the Company. The Company's future results may differ materially from those indicated in the forward-looking statements, including for the reasons noted in the Risk Factors in Item 1A.



-24-


Consolidated Results of Operations
(Dollar amounts in thousands except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
Change
 
2017
 
Change
 
2016
Net Sales
 
 
 
 
 
 
 
 
 
 
Americas Tire
 
$
2,362,646

 
(2.2
)%
 
$
2,416,778

 
(7.1
)%
 
$
2,600,323

International Tire
 
640,976

 
3.6
 %
 
618,869

 
33.4
 %
 
464,003

Eliminations
 
(195,560
)
 
(8.0
)%
 
(180,991
)
 
(29.8
)%
 
(139,457
)
Net sales
 
2,808,062

 
(1.6
)%
 
2,854,656

 
(2.4
)%
 
2,924,869

Operating profit (loss):
 
 
 


 
 
 
 
 
 
Americas Tire
 
229,500

 
(35.4
)%
 
355,059

 
(24.7
)%
 
471,613

International Tire
 
(14,044
)
 
n/m

 
15,168

 
9.1
 %
 
13,907

Unallocated corporate charges
 
(51,564
)
 
(12.8
)%
 
(59,153
)
 
26.3
 %
 
(46,818
)
Eliminations
 
1,353

 
n/m

 
(1,827
)
 
46.9
 %
 
(1,244
)
Operating profit
 
165,245

 
(46.6
)%
 
309,247

 
(29.3
)%
 
437,458

Interest expense
 
(32,181
)
 
0.4
 %
 
(32,048
)
 
20.5
 %
 
(26,604
)
Interest income
 
10,216

 
38.8
 %
 
7,362

 
68.2
 %
 
4,378

Other pension and postretirement benefit expense
 
(27,806
)
 
(25.9
)%
 
(37,523
)
 
(29.3
)%
 
(53,071
)
Other non-operating (expense) income
 
(1,416
)
 
(54.5
)%
 
(3,113
)
 
n/m

 
4,932

Income before income taxes
 
114,058

 
(53.2
)%
 
243,925

 
(33.6
)%
 
367,093

Provision for income taxes
 
33,495

 
(77.2
)%
 
147,180

 
27.1
 %
 
115,799

Net income
 
80,563

 
(16.7
)%
 
96,745

 
(61.5
)%
 
251,294

Net income attributable to noncontrolling shareholders’ interests
 
3,977

 
195.7
 %
 
1,345

 
(53.8
)%
 
2,913

Net income attributable to Cooper Tire & Rubber Company
 
$
76,586

 
(19.7
)%
 
$
95,400

 
(61.6
)%
 
$
248,381

Basic earnings per share
 
$
1.52

 
(16.9
)%
 
$
1.83

 
(59.9
)%
 
$
4.56

Diluted earnings per share
 
$
1.51

 
(16.6
)%
 
$
1.81

 
(59.9
)%
 
$
4.51

n/m – not meaningful
2018 versus 2017
Consolidated net sales for the year ended December 31, 2018 were $2,808 million, a decrease of $47 million from 2017. Lower unit volumes ($67 million) were partially offset by favorable foreign currency impact ($17 million) and pricing and mix ($3 million). The negative impact to net sales from lower unit volume was caused by a 2.2 percent unit volume decline in the Americas, coupled with a 5.4 percent decline in the International Tire Operations, compared with 2017.
The Company recorded operating profit of $165 million in 2018, compared to operating profit of $309 million in 2017, a decrease of $144 million. The 2018 results include a goodwill impairment charge ($34 million) in the Company's International Tires Operations segment. Additionally, the Company experienced higher manufacturing costs ($45 million) compared to 2017 in both segments, primarily as a result of the Company's efforts to right-size inventory levels. Lower unit volumes ($18 million) also contributed to the decline in operating profit. The Company also experienced unfavorable price and mix ($22 million), higher raw material costs ($6 million) and increased selling, general and administrative costs ($2 million) compared to 2017. The Company benefited in 2017 from the reversal of $22 million related to preliminary TBR tire duties expensed in 2016. The preliminary TBR tire duties were reversed in the first quarter of 2017 as a result of the International Trade Commission's vote nullifying the preliminary duties. Other operating costs increased from 2017 ($14 million), including start-up costs related to two new U.S. distribution warehouses and increased freight costs. These higher costs were partially offset by lower product liability costs ($8 million) in 2018. Operating profit in 2018 also benefited by $11 million related to the timing of costs and related insurance recoveries resulting from tornado damage at a North American distribution center in 2017.
The Company announced in December a joint venture agreement with Sailun Vietnam to build a new TBR tire production plant in Vietnam. The capacity created by this planned facility will decrease expected production requirements for Cooper’s GRT joint venture in China. The Company included the expected impact of the new Vietnam joint venture on projected future

-25-


cash flows in performing its annual goodwill impairment assessment on GRT. Based on the assessment performed, the goodwill balance was deemed to be fully impaired and resulted in a non-cash fourth quarter 2018 impairment charge.
The principal raw materials for the Company include natural rubber, synthetic rubber, carbon black, chemicals and steel reinforcement components. Approximately 70 percent of the Company’s raw materials are petroleum-based. Substantially all U.S. inventories have been valued using the LIFO method of inventory costing, which accelerates the impact to cost of goods sold from changes to raw material prices.
The Company strives to assure raw material and energy supply and to obtain the most favorable pricing possible. For natural rubber, natural gas and certain principal materials, procurement is managed through a combination of buying forward of production requirements and utilizing the spot market. For other principal materials, procurement arrangements include supply agreements that may contain formula-based pricing based on commodity indices, multi-year agreements or spot purchase contracts. While the Company uses these arrangements to satisfy normal manufacturing demands, the pricing volatility in these commodities contributes to the difficulty in managing the costs of raw materials.
Product liability expense decreased $8 million to $18 million in 2018 as compared to $26 million in 2017. Based on the Company's review of its reserves in 2018, coupled with normal activity, including the addition of another year of self-insured incidents, settlements and changes in the amount of reserves, the Company reduced its provision in 2018. Additional information related to the Company’s accounting for product liability costs appears in the Notes to the Consolidated Financial Statements.
Selling, general, and administrative expenses were $244 million in 2018 (8.7 percent of net sales) and $242 million in 2017 (8.5 percent of net sales). The increase in selling, general and administrative expenses was driven primarily by an increase in incentive compensation and professional fees, partially offset by the absence of costs incurred in 2017 related to the write-off of assets associated with the Company's global ERP system implementation.
Interest expense in 2018 was comparable to 2017. Interest income increased $3 million compared to 2017 as a result of improved interest rates.
As a result of the adoption of ASU 2017-07, the income statement presentation of net periodic benefit cost was changed in the first quarter of 2018. The service cost component of net periodic benefit cost continues to be classified in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost are presented in the income statement separately from the service cost component as Other pension and postretirement benefit expense, outside of operating profit. Application of the standard has been applied retrospectively for all periods presented. For the year ended December 31, 2018, other pension and postretirement benefit expense decreased to $28 million from $38 million in 2017. The decrease is primarily the result of decreased amortization of actuarial loss in 2018 as a result of improved funding levels as compared to 2017.
Other expense decreased $2 million compared with 2017, primarily due to the impact of foreign currency forward contracts.
For the year ended December 31, 2018, the Company recorded an income tax expense of $33 million (effective rate of 29.4 percent) compared with $147 million (effective rate of 60.3 percent) in 2017. The 2018 effective rate was unfavorably impacted by the non-deductible GRT goodwill impairment charge. The 2017 effective rate was impacted by a number of unique items. On December 22, 2017, the U.S. enacted comprehensive tax legislation, commonly referred to as the Tax Act, which made broad and complex changes to the tax code. In particular, the transition to a new territorial tax system resulted in a deemed repatriation tax of $35 million on undistributed earnings of foreign subsidiaries. In addition, the reduction of the U.S. corporate tax rate from 35 percent to 21 percent resulted in an adjustment to the company's U.S. deferred tax assets and liabilities to the lower base rate of 21 percent. The impact of the re-measurement of deferred tax assets and liabilities resulted in a non-cash charge of $20 million to the Company's 2017 fourth quarter tax provision. Additionally, the fourth quarter 2017 tax provision includes the impact of the recording of a non-cash valuation allowance based upon the expected realization of certain foreign deferred tax assets related to the Company's European operations of $19 million, partially offset by the reversal of an existing non-cash $7 million valuation allowance in Asia. Aside from the 2017 discrete items, the effective tax rate was also negatively impacted by the mix of earnings, with an increased percentage of earnings in a higher rate tax jurisdiction in 2017.
Net income attributable to noncontrolling shareholders’ interests increased $3 million compared with 2017, reflective of higher 2018 net income amongst the impacted entities.
The effects of inflation did not have a material effect on the results of operations of the Company in 2018.

-26-


2017 versus 2016
Consolidated net sales for the year ended December 31, 2017 were $2,855 million, a decrease of $70 million from 2016. Lower unit volumes ($83 million) and unfavorable foreign currency impact ($12 million) were partially offset by favorable pricing and mix ($25 million). The favorable pricing and mix was primarily due to net price increases related to higher raw material costs. The negative impact to net sales from lower unit volume was related to a unit volume decline in Americas Tire Operations, partially offset by improved unit volume in International Tire Operations due to increased unit volume in Asia.
The Company recorded operating profit of $309 million in 2017, compared to operating profit of $437 million in 2016. The Company experienced unfavorable raw material costs, net of price and mix, ($125 million) and lower unit volume ($33 million) compared to 2016. The Company also experienced higher manufacturing costs ($38 million) compared to 2016, primarily in the Americas Tire Operations, due to lower production volumes in North America as a result of the decline in unit volume year over year. These higher costs were partially offset by lower product liability costs ($39 million) and decreased selling, general and administrative costs ($11 million). The Company also had a reversal of $22 million related to preliminary truck and bus tire duties expensed in 2016. Other operating costs increased ($4 million), including unfavorable currency impact, compared with 2016.
Product liability expense decreased $39 million to $26 million in 2017 as compared to 2016. Based on the Company's review of its reserves in 2017, coupled with normal activity, including the addition of another year of self-insured incidents, settlements and changes in the amount of reserves, the Company reduced its accrual in 2017.
Selling, general, and administrative expenses were $242 million in 2017 (8.5 percent of net sales) and $253 million in 2016 (8.6 percent of net sales). The reduction in selling, general and administrative expenses was driven primarily by decreased incentive compensation, partially offset by an increase in professional fees, the write-off of assets related to the Company's global ERP system implementation and costs related to a reduction in force in the U.S.
Interest expense increased $5 million compared with 2016. The increase was a result of increased borrowings and higher interest rates, primarily in Asia. Interest income increased $3 million compared to 2016 as a result of improved interest rates.
For the year ended December 31, 2017, other pension and postretirement benefit expense decreased to $38 million from $53 million in 2016. The 2016 other pension and postretirement benefit expense includes $12 million of expense related to lump-sum distributions which did not recur in 2017. In 2016, in order to reduce the size and potential future volatility of the Company’s domestic defined benefit pension plan obligations, the Company offered certain plan participants with deferred vested benefits the opportunity to make a one-time election to receive a lump sum distribution of their benefits. Based on participants that accepted the offer, the Company paid $23 million of lump-sum distributions from plan assets in the third quarter of 2016, which resulted in a non-cash settlement charge ($11 million) in the third quarter of 2016. An additional non-cash settlement charge ($1 million) was incurred in the fourth quarter of 2016 as a result of normal course settlements.
Other income decreased $8 million compared with 2016, primarily due to the impact of foreign currency forward contracts.
For the year ended December 31, 2017, the Company recorded an income tax expense of $147 million (effective rate of 60.3 percent) compared with $116 million (effective rate of 31.5 percent) in 2016. On December 22, 2017, the U.S. enacted comprehensive tax legislation, commonly referred to as the Tax Act, which made broad and complex changes to the tax code. In particular, the transition to a new territorial tax system resulted in a deemed repatriation tax of $35 million on undistributed earnings of foreign subsidiaries. In addition, the reduction of the U.S. corporate tax rate from 35 percent to 21 percent resulted in an adjustment to the company's U.S. deferred tax assets and liabilities to the lower base rate of 21 percent. The impact of the re-measurement of deferred tax assets and liabilities resulted in a non-cash charge of $20 million to the Company's 2017 fourth quarter tax provision. Additionally, the fourth quarter 2017 tax provision includes the impact of the recording of a non-cash valuation allowance based upon the expected realization of certain foreign deferred tax assets related to the Company's European operations of $19 million, partially offset by the reversal of an existing non-cash $7 million valuation allowance in Asia. Aside from the 2017 discrete items, the effective tax rate was also negatively impacted by the mix of earnings, with an increased percentage of earnings in a higher rate tax jurisdiction in 2017.
Net income attributable to noncontrolling shareholders’ interests decreased $2 million compared with 2016.
The effects of inflation did not have a material effect on the results of operations of the Company in 2017.
Segment Operating Results
The Company has four segments under ASC 280:
North America, composed of the Company’s operations in the U.S. and Canada;
Latin America, composed of the Company’s operations in Mexico, Central America and South America;
Europe; and
Asia.

-27-


North America and Latin America meet the criteria for aggregation in accordance with ASC 280, as they are similar in their production and distribution processes and exhibit similar economic characteristics. The aggregated North America and Latin America segments are presented as “Americas Tire Operations” in the segment disclosure.
Both the Europe and Asia segments have been determined to be individually immaterial, as they do not meet the quantitative requirements for segment disclosure under ASC 280. In accordance with ASC 280, information about operating segments that are not reportable shall be combined and disclosed in an all other category separate from other reconciling items. As a result, these two segments have been combined in the segment operating results discussion. The results of the combined Europe and Asia segments are presented as “International Tire Operations” in the segment disclosure.
Americas Tire Operations Segment
(Dollar amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
Change
 
2017
 
Change
 
2016
Sales
 
$
2,362,646

 
(2.2
)%
 
$
2,416,778

 
(7.1
)%
 
$
2,600,323

Operating profit
 
$
229,500

 
(35.4
)%
 
$
355,059

 
(24.7
)%
 
$
471,613

Operating margin
 
9.7
%
 
(5.0) points

 
14.7
%
 
(3.4) points

 
18.1
%
Total unit sales change
 
 
 
(2.2
)%
 
 
 
(6.3
)%
 
 
United States replacement market unit shipment changes:
 
 
 
 
 
 
 
 
 
 
Passenger tires
 
 
 
 
 
 
 
 
 
 
Segment
 
 
 
(1.8
)%
 
 
 
(7.9
)%
 
 
USTMA members
 
 
 
(0.6
)%
 
 
 
0.3
 %
 
 
Total Industry
 
 
 
3.4
 %
 
 
 
0.5
 %
 
 
Light truck tires
 
 
 
 
 
 
 
 
 
 
Segment
 
 
 
(1.4
)%
 
 
 
(16.6
)%
 
 
USTMA members
 
 
 
(1.3
)%
 
 
 
(5.2
)%
 
 
Total Industry
 
 
 
0.7
 %
 
 
 
(1.7
)%
 
 
Total light vehicle tires
 
 
 
 
 
 
 
 
 
 
Segment
 
 
 
(1.7
)%
 
 
 
(10.0
)%
 
 
USTMA members
 
 
 
(0.7
)%
 
 
 
(0.4
)%
 
 
Total Industry
 
 
 
3.0
 %
 
 
 
0.2
 %
 
 
The source of this information is the United States Tire Manufactures Association ("USTMA") and internal sources.
Overview
The Americas Tire Operations segment manufactures and markets passenger car and light truck tires, primarily for sale in the U.S. replacement market. The segment also has a joint venture manufacturing operation in Mexico, COOCSA, which supplies passenger car tires to the North American, Mexican, Central American and South American markets. The segment also markets and distributes racing, TBR and motorcycle tires. The racing and motorcycle tires are manufactured by the Company’s European Operations segment and by others. TBR tires are sourced from GRT and through an off-take agreement that was entered with PCT, the Company's former joint venture. In December 2017, the Company signed an off-take agreement with Sailun Vietnam, effective from January 1, 2018 through December 31, 2020, as an additional source of TBR tires. On December 12, 2018, Cooper Vietnam, a wholly owned subsidiary of Cooper, and Sailun Vietnam entered into an equity joint venture contract to establish a joint venture in Vietnam which will produce and sell TBR tires. The new joint venture is expected to begin producing tires in 2020. Major distribution channels and customers include independent tire dealers, wholesale distributors, regional and national retail tire chains, and large retail chains that sell tires as well as other automotive products. The segment does not currently sell its products directly to end users, except through three Company-owned retail stores. The segment sells a limited number of tires to OEMs.
2018 versus 2017
Sales
Net sales of the Americas Tire Operations segment decreased from $2,417 million in 2017 to $2,363 million in 2018. The decrease in sales was a result of decreased unit volume ($54 million), partially offset by favorable pricing and mix ($3

-28-


million), primarily due to net price increases related to higher raw material costs. Foreign currency impact was unfavorable ($3 million). Unit shipments for the segment decreased 2.2 percent in 2018 compared with 2017. In the U.S., the segment’s unit shipments of total light vehicle tires decreased 1.7 percent in 2018 compared with 2017. This decrease compares with a 0.7 percent decrease in total light vehicle tire shipments experienced by the USTMA, and a 3.0 percent increase in total light vehicle tire shipments experienced for the total industry, which includes an estimate for non-USTMA members. The segment's TBR tire shipments for the U.S. increased 1.4 percent in 2018 compared with 2017, outperforming the USTMA, but trailing the total industry.
Operating Profit
Operating profit for the segment decreased $126 million to $230 million in 2018. The segment experienced unfavorable price and mix ($32 million), higher raw material costs ($19 million) and lower unit volumes ($15 million) compared to 2017. The segment also experienced higher manufacturing costs ($32 million) as a result of the Company's efforts to right-size inventory levels, as well as increased selling, general, and administrative costs ($10 million), primarily related increased incentive compensation costs in 2018. The Company benefited in 2017 from the reversal of $22 million related to preliminary TBR tire duties expensed in 2016 and reversed in the first quarter of 2017. Other operating costs increased from 2017 ($15 million), including start-up costs related to two new U.S. distribution warehouses and increased freight costs. These higher costs were partially offset by lower product liability expense ($8 million). 2018 also benefited by $11 million related to the timing of costs and related insurance recoveries resulting from tornado damage at a North American distribution center in 2017.
The segment’s internally calculated raw material index of 163.6 for the year ended December 31, 2018 was an increase of 3.3 percent from 2017.
2017 versus 2016
Sales
Net sales of the Americas Tire Operations segment decreased from $2,600 million in 2016 to $2,417 million in 2017. The decrease in sales was a result of decreased unit volume ($185 million), partially offset by favorable pricing and mix ($3 million), primarily due to net price increases related to higher raw material costs. Foreign currency impact was unfavorable ($1 million). Unit shipments for the segment decreased 6.3 percent in 2017 compared with 2016. In the U.S., the segment’s unit shipments of total light vehicle tires decreased 10.0 percent in 2017 compared with 2016. This decrease compares with a 0.4 percent decrease in total light vehicle tire shipments experienced by the USTMA, and a 0.2 percent increase in total light vehicle tire shipments experienced for the total industry. The segment's commercial truck tire shipments for the U.S. increased 14.7 percent in 2017 compared with 2016, outperforming both the industry and the USTMA.
Operating Profit
Operating profit for the segment decreased $117 million from $472 million in 2016 to $355 million in 2017. The segment experienced unfavorable raw material costs, net of price and mix, ($102 million) and lower unit volumes ($47 million) compared to 2016. The segment also experienced higher manufacturing costs ($47 million) due to lower production volumes as a result of the decline in unit volume year over year. These higher costs were partially offset by lower product liability expense ($39 million) and decreased selling, general, and administrative costs ($25 million), primarily related to reduced incentive compensation compared to 2016. The Company also had a reversal of expense ($22 million) related to preliminary truck and bus tire duties expensed in 2016. Other operating costs increased ($7 million), including unfavorable currency impact, compared with 2016.
The segment’s internally calculated raw material index of 158.3 for the year ended December 31, 2017 was an increase of 14.0 percent from 2016.


-29-


International Tire Operations Segment
(Dollar amounts in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
Change
 
2017
 
Change
 
2016
Sales
 
$
640,976

 
3.6
 %
 
$
618,869

 
33.4
%
 
$
464,003

Operating (loss) profit
 
$
(14,044
)
 
n/m

 
$
15,168

 
9.1
%
 
$
13,907

Operating margin
 
(2.2
)%
 
4.7 points

 
2.5
%
 
0.5 points

 
3.0
%
Total unit sales change
 
 
 
(5.4
)%
 
 
 
21.6
%
 
 
Overview
The International Tire Operations segment is the combination of the Europe and Asia operating segments. The European operations include manufacturing operations in the U.K. and Serbia. The U.K. entity manufactures and markets passenger car, light truck, motorcycle and racing tires and tire retread material for domestic and global markets. The Serbian entity manufactures passenger car and light truck tires primarily for the European markets and for export to the North American segment. The Asian operations are located in the PRC. Cooper Kunshan Tire manufactures passenger car and light truck tires both for the Chinese domestic market and for export to markets outside of the PRC. On December 1, 2016, the Company acquired 65 percent ownership of China-based GRT, a joint venture manufacturing facility located in the PRC. GRT serves as a global source of TBR tire production for the Company. The segment also had another joint venture in the PRC, PCT, which manufactured and marketed truck and bus radial and bias tires, as well as passenger car and light truck tires for domestic and global markets. The Company sold its ownership interest in this joint venture in November 2014, and the Company began procuring certain TBR and passenger car tires under off-take agreements with PCT through mid-2018, which were subsequently extended and now expire in mid-2020. In December 2017, the Company signed an off-take agreement with Sailun Vietnam, as an additional source of TBR tires. On December 12, 2018, Cooper Vietnam, a wholly owned subsidiary of Cooper, and Sailun Vietnam entered into an equity joint venture contract to establish a joint venture in Vietnam which will produce and sell TBR tires in addition to the off-take agreement. The new joint venture is expected to begin producing tires in 2020. The segment sells a majority of its tires in the replacement market, with a growing portion also sold to OEMs.
On January 17, 2019, Cooper Tire Europe, a wholly owned subsidiary of the Company, committed to a plan to cease light vehicle tire production at its Melksham, England facility. Light vehicle tire production is expected to be phased out over a period of approximately 10 months. An estimated 300 roles will be eliminated at the site. Cooper Tire Europe will obtain light vehicle tires to meet customer needs from other production sites within the Company’s global production network. Approximately 400 roles will remain in Melksham to support the functions that continue there, including motorsports and motorcycle tire production, the materials business, Cooper Tire Europe headquarters, sales and marketing, and the Europe Technical Center.
2018 versus 2017
Sales
Net sales of the International Tire Operations segment increased $22 million, or 3.6 percent, from 2017. The segment experienced decreased unit volumes ($33 million), which was more than offset by favorable price and mix ($33 million) and favorable foreign currency impact ($22 million) compared with 2017. Unit volume was lower in both China and Europe compared to 2017. Net segment exports to the U.S. decreased compared with 2017.
Operating Profit
Operating profit for the segment decreased $29 million to an operating loss of $14 million in 2018. Results for 2018 included a goodwill impairment charge related to GRT ($34 million), as well as increased manufacturing costs ($14 million) and unfavorable unit volume ($4 million). These items were partially offset by lower raw material costs ($13 million), favorable price and mix ($8 million) and lower selling, general and administrative costs ($2 million) compared to 2017.
2017 versus 2016
Sales
Net sales of the International Tire Operations segment increased $155 million, or 33.4 percent, from 2016. The segment experienced increased unit volumes ($76 million) and favorable price and mix ($89 million), which were partially offset by unfavorable foreign currency impact ($10 million) compared with 2016. Unit volume was higher in China due to increased

-30-


sales in the domestic market for both original equipment and replacement tires, while unit volume in Europe declined slightly compared to 2016. Net segment exports to the U.S. increased compared with 2016.
Operating Profit
Operating profit for the segment increased $1 million to an operating profit of $15 million in 2017. The segment experienced favorable unit volume ($11 million), decreased manufacturing costs ($8 million) and lower other costs ($2 million). These items were partially offset by unfavorable raw material costs, net of price and mix, ($20 million) compared to 2016.
Outlook for the Company
In 2019, the Company expects modest unit volume growth compared to 2018.
Operating profit margin is expected to improve throughout the year, with the full year exceeding 2018.
The Company expects its full year 2019 effective tax rate will be in a range between 22 and 25 percent.
The Company expects capital expenditures for 2019 will be in a range between $190 million and $210 million. This does not include capital contributions related to Cooper’s pro rata share of the previously announced joint venture with Sailun Vietnam or other potential manufacturing footprint investments.
These 2019 expectations include tariffs already in place, but do not include rate changes or additional tariffs that continue to be considered, but have not yet been imposed.

-31-


Liquidity and Capital Resources
Sources and uses of cash in operating activities
Net cash provided by operating activities of continuing operations was $254 million in 2018 compared to $178 million in 2017. Net income provided $81 million in 2018 as compared to net income of $97 million in 2017. In 2018, non-cash items contributed $249 million, including the benefit of the $34 million reduction in goodwill due to an impairment charge, compared to $251 million contributed in 2017, which included a favorable decrease in deferred income taxes due to the re-measurement of U.S. deferred tax assets as a result of the Tax Act. In 2018, changes in working capital used $76 million, as compared to the usage of $170 million in 2017. The 2018 usage was driven primarily by the decrease in the Company's pension and postretirement benefit liabilities and increased accounts and notes receivable, partially offset by benefits provided by decreased inventory in 2018, as a result of the management of inventory levels, and favorable movement in accounts payable due to cash management initiatives. The usage of working capital in 2017 was primarily due to increasing inventory levels, decreased pension and postretirement benefit liabilities, unfavorable movement in accounts payable and the decline of the Company's long-term product liability accrual.
Net cash provided by operating activities of continuing operations was $178 million in 2017 compared to $315 million in 2016. Net income provided $97 million and $251 million in 2017 and 2016, respectively. Net income in 2017 included the benefit of $39 million related to lower product liability expense, changes in the amount of reserves for cases where sufficient information is known to estimate a liability, and changes in assumptions. Other non-cash items totaled $251 million in 2017 compared to $199 million in 2016. The increase in 2017 was due to the re-measurement of U.S. deferred tax assets as result of the Tax Act. Changes in working capital consumed $170 million and $135 million in 2017 and 2016, respectively. The additional consumption in 2017 was the result of several unfavorable cash flow movements in 2017, including the decline of the Company's long-term product liability accrual, decreased pension and postretirement benefit liabilities and unfavorable movement in accounts payable.
Sources and uses of cash in investing activities
Net cash used in investing activities reflect capital expenditures of $193 million, $197 million and $175 million in 2018, 2017 and 2016, respectively.
In 2016, the Company invested $6 million to purchase 65 percent of GRT, net of $8 million of cash acquired.
The Company’s capital expenditure commitments at December 31, 2018 were $88 million and are included in the “Purchase Obligations” line of the Contractual Obligations table, which appears later in this section.
Sources and uses of cash in financing activities
In 2018, the Company repaid $20 million of short-term debt at its Asian operations. In 2016, the Company added $10 million of short-term debt at its Asian operations.
The Company repurchased $30 million, $91 million and $108 million of its common stock in 2018, 2017 and 2016, respectively, as part of the Company’s share repurchase program authorized by the Board of Directors.
Dividends paid on the Company’s common shares were $21 million, $22 million and $23 million in 2018, 2017 and 2016, respectively. The Company has maintained a quarterly dividend of 10.5 cents per share in each quarter during the three years ended December 31, 2018. No dividend was paid to the noncontrolling shareholder in COOCSA in 2018. Dividends paid to the noncontrolling shareholder in COOCSA were less than $1 million in each of 2017 and 2016.
In 2018, 2017, and 2016, stock options were exercised to acquire common stock shares of 16,111, 210,125 and 166,434, respectively. The cash impact of these exercises was $0.3 million, $4 million and $4 million in 2018, 2017 and 2016, respectively. Employee taxes paid as a result of shares withheld in conjunction with stock compensation activity were $2 million, $7 million and $3 million in 2018, 2017, and 2016, respectively.
Available cash, credit facilities and contractual commitments
At December 31, 2018, the Company had cash and cash equivalents of $356 million.
Domestically, the Company has a revolving credit facility with a consortium of banks that provides up to $400 million based on available collateral, including a $110 million letter of credit subfacility, and is set to expire in February 2023.
The Company also has an accounts receivable securitization facility with a borrowing limit of up to $150 million, based on available collateral, which expires in February 2021.

-32-


These credit facilities are undrawn, other than to secure letters of credit, at December 31, 2018. The Company’s additional borrowing capacity under these facilities, net of amounts used to back letters of credit and based on available collateral at December 31, 2018, was $494 million.
The Company’s operations in Asia have annual renewable unsecured credit lines that provide up to $65 million of borrowings and do not contain significant financial covenants. The additional borrowing capacity on the Asian credit lines totaled $50 million at December 31, 2018.
At December 31, 2018, $174 million of unsecured notes due in December 2019 are classified within the current portion of long-term debt. The Company intends to finance all or a portion of the maturing debt through borrowings.
The Company believes that its cash and cash equivalent balances, along with available cash from operating cash flows and credit facilities, will be adequate to fund its typical needs, including working capital requirements, projected capital expenditures, including its portion of capital expenditures in its partially-owned subsidiaries, capital contributions in the joint venture with Sailun Vietnam, dividend and share repurchase goals and maturing long-term debt. The Company also believes it has access to additional funds from capital markets to fund potential strategic initiatives and to finance maturing long-term debt. The entire amount of short-term notes payable outstanding at December 31, 2018 is debt of consolidated subsidiaries. The Company expects its subsidiaries to refinance or pay these amounts within the next twelve months.

The Company’s cash requirements relating to contractual obligations at December 31, 2018 are summarized in the following table:
(Dollar amounts in thousands)
 
Payment Due by Period
Contractual Obligations
 
Total
 
2019
 
2020
 
2021
 
2022
 
2023
 
After 2023
Unsecured notes
 
$
290,458

 
$
173,578

 
$

 
$

 
$

 
$