UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-K

 

 

(Mark one)

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20082010

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            

Commission file number 333-123708

 

 

COOPER-STANDARD HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware 20-1945088

(State or other jurisdiction of


incorporation or organization)

 

(I.R.S. Employer

Identification No.)

39550 Orchard Hill Place Drive

Novi, Michigan 48375

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:

(248) 596-5900

 

 

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

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

Title of Each Class

Name of Exchange on Which Registered

Common Stock, par value $0.001 per shareOTC Bulletin Board

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

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  x¨    No  ¨x

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  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ¨    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. x

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

  ¨  Accelerated filer  ¨

Non-accelerated filer

  x  Smaller reporting company  ¨

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  x    No  ¨

The aggregate market value of voting and non-voting common stock held by non-affiliates as of June 30, 2010 was $258,799,060.

The number of the registrant’s shares of common stock, $0.01$0.001 par value per share, outstanding as of March 24, 200916, 2011 was 3,479,10018,376,112 shares.

The registrant’s common stock is not publicly traded.Documents Incorporated by Reference

Certain portions, as expressly described in this report, of the Registrant’s Proxy Statement for the 2011 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

 

 

 


TABLE OF CONTENTS

 

      Page
PART I

Item 1.

  

Business

 3

Item 1A.

  

Risk Factors

  1518

Item 1B.

  

Unresolved Staff Comments

  2228

Item 2.

  

Properties

  2328

Item 3.

  

Legal Proceedings

  2431

Item 4.

  

Submission of Matters to a Vote of Security HoldersReserved

  24
31
PART II
Item 5.  PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

  2532

Item 6.

  

Selected Financial Data

  2533

Item 7.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

  2735

Item 7A.

  

Quantitative and Qualitative Disclosures About Market Risk

  4857

Item 8.

  

Financial Statements and Supplementary Data

  5159

Item 9.

  

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  101122

Item 9A(T).9A.

  

Controls and Procedures

  102122

Item 9B.

  

Other Information

  102
123
PART III
Item 10.  PART III

Item 10.

Directors, Executive Officers and Corporate Governance

  103124

Item 11.

  

Executive Compensation

  107124

Item 12.

  

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

  138124

Item 13.

  

Certain Relationships and Related Transactions and Director Independence

  139125

Item 14.

  

Principal Accountant Fees and Services

  139
125
PART IV
Item 15.  PART IV

Item 15.

Exhibits and Financial Statement Schedules

  140126

Signatures

  146
Supplemental Information131  147


PART I

 

Item 1.Business

The terms the “Company,” “Cooper-Standard,” “we,” “us,” and “our” in this Form 10-K refer to Cooper-Standard Holdings Inc. and(together with its consolidated subsidiaries, unless the context requires otherwise.

General:

Cooper-Standard“Company”, “Cooper-Standard”, “we” or “us”) is a leading manufacturer of fluid handling, body sealing, and noise, vibration and harshness controlAnti-Vibration Systems (“NVH”AVS”) components, systems, subsystems, and modules,modules. Our products are primarily for use in passenger vehicles and light trucks forthat are manufactured by global automotive original equipment manufacturers (“OEMs”) and replacement markets. The Company conductsWe conduct substantially all of itsour activities through itsour subsidiaries.

We believe that we are the largest global producer of body sealing systems, the second largest global producer of the types of fluid handling products that we manufacture and one of the largest North American producers of AVS business. We design and manufacture our products in each major region of the world through a disciplined and sustained approach to engineering and operational excellence. We operate in 66 manufacturing locations and nine design, engineering, and administrative locations in 18 countries around the world.

Approximately 81% of our sales in 2010 were to OEMs, including Ford Motor Company (“Ford”), General Motors Company (“GM”), and Chrysler Group LLC ( “Chrysler” ) (collectively, the “Detroit 3”), Fiat, Volkswagen/Audi Group, Renault/Nissan, PSA Peugeot Citroën, Daimler, BMW, Toyota, Volvo, Jaguar/Land Rover and Honda. The Company’sremaining 19% of our 2010 sales were primarily to Tier I and Tier II automotive suppliers and non-automotive manufacturers. In 2010, our products were found in each of the 20 top-selling models in North America and in 19 of the 20 top-selling models in Europe. Our principal executive offices are located at 39550 Orchard Hill Place Drive, Novi, Michigan 48375, and itsour telephone number is (248) 596-5900. Additional information is available at our website at www.cooperstandard.com, which is not a part of this Annual Report on Form 10-K.

We believe that we are the largest global producer of body sealing systems, one of the two largest North American producers in the NVH control business,Corporate History and the second largest global producer of the types of fluid handling products that we manufacture. We design and manufacture our products in each major region of the world through a disciplined and consistent approach to engineering and production. The Company operates in 68 manufacturing locations and ten design, engineering, and administrative locations in 18 countries around the world.Business Developments

The Company’s principal shareholders are affiliates of The Cypress Group L.L.C. and GS Capital Partners 2000, L.P., whom we refer to as our “Sponsors.” Each of the Sponsors, including their respective affiliates, currently owns approximately 49.3% of the equity of Cooper-Standard Holdings Inc. See “Item 12. Security Ownership of Certain Beneficial Ownerswas formed and Managementcapitalized in 2004 as a Delaware corporation and Related Stockholder Matters”.

Approximately 76% of our sales in 2008 were to automotive original equipment manufacturers (“OEMs”), including Ford, General Motors, Chrysler (collectively, the “Detroit 3”), Audi, BMW, Fiat, Honda, Mercedes Benz, Porsche, PSA Peugeot Citroën, Renault/Nissan, Toyota, and Volkswagen. The remaining 24% of our 2008 sales were primarily to Tier I and Tier II automotive suppliers. In 2008, our products were found in 22 of the 25 top-selling models in North America and in 24 of the 25 top-selling models in Europe.

Some market data and other statistical information used throughout this Form 10-K is basedbegan operating on data available from CSM Worldwide, an independent market research firm. Other data are based on our good faith estimates, which are derived from our review of internal surveys, as well as third party sources. Although we believe all of these third party sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness. To the extent that we have been unable to obtain information from third party sources, we have expressed our belief on the basis of our own internal analyses and estimates of our and our competitors’ products and capabilities.

Acquisition History

On December 23, 2004 Cooper-Standard Holdings Inc.when it acquired the automotive segment of Cooper Tire & Rubber Company (the “2004 Acquisition”) and began operating. Cooper-Standard Holdings Inc. operates the business on a stand-alone basis primarily through its principal operating subsidiary, Cooper-Standard Automotive Inc. See “Item 8. Financial Statements and Supplementary Data” (especially Notes 8 and 17, respectively) for further information concerning financing and equity contributions relating to the 2004 Acquisition.

In July 2005, the Company acquired Gates Corporation’s Enfriamientos de Automoviles manufacturing operations in Atlacomulco, Mexico (the “Atlacomulco business”). The Atlacomulco business manufactures low pressure heating and cooling hose, principally for the OEM automotive market.

In February 2006, the Companywe acquired the automotivefifteen fluid handling systems business ofoperations in North America, Europe and China (collectively, “FHS”) from ITT Industries, Inc. (“FHS” or the “FHS business”). See “Item 8. Financial Statements and Supplementary Data” (especially Note 3).

In March 2007, the Company acquired Automotive Components Holdings’ El Jarudo manufacturing operations located in Juarez, Mexico (the “El Jarudo business”). The El Jarudo business manufactures automotive fuel rails.

In August 2007, the Company completed the acquisition of ninewe acquired Metzeler Automotive Profile Systems sealing systems operations in Germany, Italy, Poland, Belarus, and Belgium, and a joint venture interest in China (“MAPS” or the “MAPS business”) from Automotive Sealing Systems S.A. (“ASSSA”). See “Item 8. Financial Statements and Supplementary Data” (especially Note 3).

In December 2007, the Company acquired the 74%We completed a related acquisition of a joint venture interest of ASSSA in Metzeler Automotive Profiles India Private Limited (“MAP India”), a leading manufacturer of automotive sealing products in India. See “Item 8. Financial Statements and Supplementary Data” (especially Note 3).

Business Environment and Industry Trends:

During 2008, our revenues were adversely affected by a significant decline in worldwide automotive production levels, particularly during the second half of the year. Production volumes during the first half of the year were relatively stable. During the second half of 2008, however, overall negative macroeconomic conditions, including disruptions in the financial markets, led to severe declines in consumer confidence which significantly impacted the demand for, and production of, passenger cars and light trucks.

A number of key industry developments and trends have coincided with, or resulted in whole or in part from, these negative macroeconomic conditions. These developments and trends include:

A deterioration in the financial condition of certain of our customers which has caused them to implement restructuring initiatives, including in some cases significant capacity reductions and/or reorganization under bankruptcy laws.December 2007. In certain cases, our customers have asked for and received financial assistance from government sources. Their ability to obtain further assistanceaddition to the extent necessary is unknownFHS and creates additional uncertainty.

A declineMAPS acquisitions, we acquired a hose manufacturing operation in market share, significant production cuts and permanent capacity reductions by some of our largest customers, includingMexico from the Detroit 3.

Continuing pricing pressures from OEMs.

Growing concerns over the economic viability of certain of our suppliers whose financial stability, access to credit and liquidity is uncertain due to negative macroeconomic conditions and industry conditions.

A shift in consumer preference and vehicle production mix, particularly in North America, from sport utility vehicles and light trucks to more fuel efficient vehicles, cross-over utility vehicles and passenger cars;Gates Corporation and a shiftfuel rail manufacturing operation in consumer preferenceMexico from Automotive Component Holdings, LLC, in 2005 and vehicle production mix, particularly in Europe, from large and mid-size passenger cars to smaller cars.

Changes in foreign currency exchange rates that affect the relative competitiveness of manufacturing operations in different geographic markets.

Strategy:2007, respectively.

We have undertaken a number of initiatives, and will be implementing additional measures, to reduce our cost and operating structures in order to position the Company to operate successfully under the difficult macroeconomic and industry conditions that adversely impacted us during the second half of 2008 and are likely to persist to a degree, and over a period of time, that is difficult to predict. At the same time, we intend to solidify our position as one of the world’s leading automotive suppliers of body sealing, noise, vibration and harshness (NVH) control, and fluid handling components and systems. Our focus is on the following key areas:

Reconfiguring our Business and Cost Structure as Appropriate in the Changing Industry Environment

In the second half of 2008, we announced the closure of two manufacturing facilities, one located in Australia and the other in Germany. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” (especially the “Restructuring” subsection beginning on page 41) for additional information concerning these and other restructuring actions undertaken by the Company since the 2004 Acquisition. We plan to continue to identify and implement restructuring opportunities so that the Company is appropriately configured in the rapidly changing industry environment.

We have also taken a number of other actions reducing the size of the Company’s salaried and hourly workforce and adjusting work hours, wages, salaries and benefits at all levels of the Company, including the following actions:

Implementation of across-the-board 10% reductions in the base salaries of the Company’s salaried employees in the United States and Canada effective January 2009 through the first half of the year.

Implementation of workforce reductions, reduced workweeks and mandatory time-off in many of the Company’s locations.

Implementation of short work weeks, voluntary salary reduction programs and other actions in Europe to effectuate cost-savings in accordance with applicable laws.

The freezing of benefit accruals in certain defined benefit retirement plans, and the suspension of matching contributions under the Company’s defined contribution plans for 2009.

Reduction and delay of capital spending by raising return on investment hurdles.

On March 26, 2009, the Company announced the implementation of a comprehensive plan involving the discontinuation of its global product line operating divisions, formerly called the Body & Chassis Systems division and the Fluid Systems division, and the establishment of a new operating structure organized on the basis of geographic regions. The Company will now operate from two divisions, North America and International (covering Europe, South America and Asia). Under the plan, the Company’s reporting segments, as well as its operating structure, have changed. This new operating structure allows the Companyus to maintain itsour full portfolio of global products, and provide unified customer contact points, while better managing its operating costs and resources in severe industry conditions. It will result in a reduction in the Company’s worldwide salaried workforce of approximately 20 percent.

Solidifying global leadership position with emphasis on high growth vehicles around the world

We plan to maintain our leading positions with the Detroit 3, with particular emphasis on the vehicles they produce globally, and to continue to strengthen our relationships with European and Asian manufacturers as their market share increases. Many conquest business opportunities are becoming available worldwide as a result of significant automotive supply base consolidations. China and India will continue to be regions of emphasis as the light vehicle market is projected to grow in those regions as their economies continue to develop.

Further Developing Technologies and Customer Service

To further strengthen our customer relationships, we plan to continue to focus on innovative product development, program management, engineering excellence, and customer service, all of which enhance the value we offer our customers. We will continue to seek customer feedback with respect to quality, manufacturing, design and engineering, delivery, and after-sales support in an effort to provide the highest level of customer service and responsiveness. We believe our efforts have been successful to date and we continue to be awarded content on our customer’s new programs. We have also achieved several recent

successes with other OEMs, such as Nissan, Toyota, Honda, Audi, and Volkswagen. Further, our acquisition of MAPS diversified our customer base with new key customers such as Fiat, Audi, BMW, Daimler and Volkswagen Group. In Asia, and particularly in China, we have been successful in entering new markets and are developing a substantial manufacturing and marketing presence to serve local OEMs and to follow our customers as they target these markets. We operate eight manufacturing locations in China, which provide products and services to both Chinese OEMs and our traditional customers.

Targeting fuel efficient vehicles, global platforms and certain high volume vehicles

With the recent shift in customer preferences, we intend to target small car, hybrid and alternative powertrains and increase the amount of content we provide to each of these segments. Given our many innovations in products which help conserve fuel and reduce emissions, many customers are looking to us to assist them in providing lighter, more fuel efficient vehicles that meet consumer demand, as well as more stringent emissions standards.

Further expanding into the small carsupport our regional and hybrid market will allow us to gain market share, create greater economies of scale,global customers with complete engineering and provide more opportunities to partner with customers on future generation designs of small cars, hybrids and alternative powertrains, as we can assist with newly introduced lightweight high- performance plastic materials for use in our hose and body sealing products and fuel rail assemblies, improve fuel flow and help reduce fuel consumption. Our engineering teams have also partnered with customers to deliver state-of-the-art thermal management solutions to enhance cooling effectiveness for the electric motors and batteries of their new hybrid vehicle platforms.

Global platforms which feature the same vehicle design produced in multiple regions of the world is a growing trend as it enables OEMs to reduce cost by leveraging global engineering, purchasing and supply base synergies. These types of programs allow us to showcase our production capabilitiesmanufacturing expertise in all major regions of the world which has beenworld.

We have implemented a key elementnumber of restructuring initiatives in winning businessrecent years, including the global restructuring of our operating structure in 2009 as well as the closure of facilities in North America, Europe and Asia. For information on these platforms.restructuring initiatives, see Note 5. “Restructuring” to the consolidated financial statements.

Reorganization

On August 3, 2009, Cooper-Standard Holdings Inc. and each of its direct and indirect wholly-owned U.S. subsidiaries (the “Debtors”) filed voluntary petitions for relief under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On August 4, 2009, our Canadian subsidiary, Cooper-Standard Automotive Canada Limited (“CSA Canada”) commenced proceedings seeking relief from its creditors under Canada’s Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List) in Toronto, Canada (the “Canadian Court”). Our subsidiaries and operations outside the United States and Canada were not included in the Chapter 11 cases or the Canadian proceedings (other than CSA Canada) and continued to operate in the ordinary course of business.

On March 26, 2010, the Debtors filed with the Bankruptcy Court their Second Amended Joint Chapter 11 Plan of Reorganization (as amended and supplemented, the “Plan of Reorganization”) and their First Amended Disclosure Statement with the Bankruptcy Court. On May 12, 2010, the Bankruptcy Court entered an order confirming our Plan of Reorganization. The combinationCanadian Court sanctioned CSA Canada’s second amended plan of compromise and arrangement on April 16, 2010.

On May 27, 2010, the effective date of our global footprint, experience in global programPlan of Reorganization, we consummated the reorganization and emerged from Chapter 11.

Following the effective date of our Plan of Reorganization, our capital structure consisted of the following:

Senior ABL Facility. A senior secured asset-based revolving credit facility in the aggregate principal amount of $125 million (the “Senior ABL Facility”), which contains an uncommitted $25 million “accordion” facility that will be available at our request if the lenders, at the time, consent.

8 1/2% Senior Notes due 2018. $450 million of senior unsecured notes (the “Senior Notes”) that bear interest at 8 1/2% per annum and mature on May 1, 2018.

Common stock, 7% preferred stock and warrants. Equity securities comprised of (i) 17,489,693 shares of our common stock, (ii) 1,000,000 shares of our 7% cumulative participating convertible preferred stock (“7% preferred stock”), which are initially convertible into 4,290,788 shares of our common stock, and (iii) 2,419,753 warrants (“warrants”) to purchase up to an aggregate of 2,419,753 shares of our common stock.

In addition, on the effective date of our Plan of Reorganization, we issued to certain officers and key employees (i) 757,896 shares of our common stock as restricted stock, plus an additional 104,075 shares of our common stock as restricted stock that may be reduced subject to realized dilution on the warrants, (ii) 41,664 shares of our 7% preferred stock as restricted 7% preferred stock and (iii) 702,509 options to purchase shares of common stock, plus an additional 78,057 options to purchase shares of our common stock that may be reduced subject to realized dilution on the warrants. On the day after the effective date of our Plan of Reorganization, we issued to certain of our directors and Oak Hill Advisors L.P. and its affiliates 26,448 shares of our common stock as restricted stock and 58,386 options to purchase shares of our common stock. We also reserved up to 780,566 shares of our common stock for future issuance to management and worldwide customer service puts us inboard of directors. On July 19, 2010 we paid a leadership position as a proven supplier for future global programs.

While smaller cars and crossover vehicles have grown in popularity, certain large car and truck platforms (pick-up trucks) continuedividend to be in demand and remain important as we look to maximize content and utilizeholders of our lean manufacturing program to continuously improve processes and increase productivity on these platforms. An example of this: The Ford F-150 continues to be a popular selling truck. Our overall content on the F-150 consists of the following products: engine mounts, transmission mounts, engine and transmission brackets (NVH products), appliqué, inner belts, outer belts, below belt brackets, body seals, door seals, glass runs, cutline seals, roof rail secondary seals, hood to radiator seals (sealing products), fuel tank bundle, fuel rails, chassis fuel bundle, brake line assemblies (fuel and brake products), radiator hose assemblies, heater hose assemblies, transmission oil cooler line assemblies (thermal management products) and engine emission tubes.

Through our extensive product portfolio, innovative solutions for emerging technology trends and broad global capabilities, we expect to continue winning new business across all major regions and with all major automakersoutstanding 7% preferred stock in the global market.form of 10,780 additional shares of 7% preferred stock.

Developing new modular solutionsOn the effective date of our Plan of Reorganization, our prepetition equity, debt and certain other obligations were cancelled, terminated and repaid, as applicable, as follows:

Our prepetition common stock and other value-added productsequity interests were cancelled, and no distributions were made to former equity-holders.

In addition

All outstanding obligations under our prepetition senior notes and prepetition senior subordinated notes were cancelled and the indentures governing these obligations were terminated in exchange for shares and warrants.

Our prepetition credit agreement and the Debtors’ Debtor-in-Possession Credit Agreement (the “DIP credit agreement”) were paid in full.

The consolidated financial statements for the reporting entity subsequent to products for fuel efficiency and lower emissions, we also believe that significant opportunities exist to grow by providing complete sub-systems, modules, and assemblies. As a leader in design, engineering, and technical capabilities, weemergence from Chapter 11 bankruptcy proceedings (the “Successor”) are able to focus on improving products, developing new technologies, and implementing more efficient processes in each of our product lines. Our body sealing products, which are part of our body & chassis product portfolio, are visible to vehicle passengers and can enhance the vehicle’s aesthetic appeal, in addition to creating a barrier to wind, precipitation, dust, and noise. Our noise, vibration and harshness control products (NVH), which are also part of our body & chassis products, are a fundamental part of the driving experience and can be importantnot comparable to the vehicle qualityconsolidated financial statements for the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings (the “Predecessor”).

Business Strategy

Sustain and can significantly improve ride and handling. Our fluid handling modules and sub-systems are designedoperational excellence to increase functionality and decrease cost to the OEM, which can be the deciding factor in winning new business.

To remain a leader in new product innovation, we will continue to invest in research and development and to focus on new technologies, materials, and designs. We believe that extensive use of Design for Six Sigma and other development strategies and techniques has led to some of our most successful recent product innovations, including our ESP Thermoplastic Glassruns (Body & Chassis), a proprietary plastics-to-aluminum overmolding process (Fluid Handling), and our hydromounts (Body & Chassis). Examples of successful modular innovations include engine cooling systems, fuel and brake systems, and exhaust gas recirculation modules in our fluid handling product category, and Daylight Opening Modules in our body & chassis category.

Selectively pursuing complementary acquisitions and alliancesstrengthen global organization

We intendseek to continue to selectively pursue acquisitions and joint ventures to enhanceoptimize our customer base, geographic penetration, market diversity, scale, and technology. Consolidation is an industry trend and is encouraged by OEMs’ desire for fewer supplier relationships. We believe joint ventures allow us to penetrate new markets with less relative risk and capital investment. We believe we have a strong platform for growth through acquisitions based on our past integration successes, experienced management team, global presence, and operational excellence. We also operate through several successful joint ventures, including those with Nishikawa Rubber Company, Zhejiang Saiyang Seal Products Co., Ltd. (“Saiyang Sealing”), Guyoung Technology Co. Ltd. (“Guyoung”), Hubei Jingda Precision Steel Tube Industry Co., Ltd. (“Jingda”), Shanghai Automotive Industry Corporation (“SAIC”) and Toyoda Gosei Co., Ltd. (“Toyoda Gosei”).

Expanding our footprint in Asia

While we have, through new facilities, acquisitions, and joint ventures, significantly expanded our presence in Asia, particularly China and India, we believe that significant opportunities for growth exist in this fast-growing market. We will continue to evaluate opportunities that enable us to establish or expand our design, technology and commercial support operations in that region and enhance our ability to serve current and future customers.

Focusing on operational excellencebusiness and cost structure

We will continue to intensely focuskeep pace with the rapidly changing global automotive industry, with an emphasis on the efficiency ofreducing our overall cost structure and making our manufacturing operations and on opportunities to reduce our cost structure. Although the automotive supply sector is highly competitive, we believe that we have been able to maintain strong operating margins due in part to our ability to constantly improve our manufacturing processes and to selectively relocate or close facilities.more efficient. Our primary areas of focus are:

 

  

Identifying and implementing Leanlean manufacturing initiatives throughout the Company. Our Leanlean manufacturing initiatives are focusedfocus on optimizing manufacturing by eliminating waste, controlling cost,costs and enhancing productivity. Lean manufacturing initiatives have been implemented at each of our manufacturing and design facilities and continue to be an important element in sustaining our disciplined approach to operational excellence.

 

  

Evaluating opportunities to relocate operations to lower-cost countriesExpand global footprint. We are supplementing our Western European operation’s higher labor contentoperations with Central and Eastern European facilities to more closely matchsupport our customers’ footprints for more efficient transport of parts.evolving footprints. In addition, some components have been movedwe continue to expand our operations in China, and India while also expanding inand Mexico.

 

  

Consolidating facilities to reduce our cost structure and improve capacity utilization. Our restructuringcapacity utilization efforts were primarily undertakenare designed to streamline our global operations.operations and include taking advantage of opportunities to reduce our overall cost structure by consolidating and closing facilities. For example, in the second half of 2009, we closed two manufacturing facilities, one located in Ohio and another located in Germany, and in March 2010, we announced the closure of our manufacturing facility in Spain. Also, in February 2011, we announced the closure of a manufacturing facility in Ohio. We will continue to take a disciplined approach to evaluating opportunities that would improve our efficiency, profitability and cost structure.

 

  

Maintaining flexibility in all areas of our operations.operations. Our operational capital needs are generally lower compared tothan many companies in the automotive industry. Ourour industry and a major portion of our manufacturing machinery is re-programmable and many times movable from job-to-job, providing us flexibility in adapting to market changes and serving customers.customers worldwide.

Leverage Technology for Innovation and Growth

We will draw on our technical expertise to provide customers with innovative solutions. Our engineers combine product design with a broad understanding of material options for enhanced vehicle performance. We believe our reputation for successful innovation in product design and material usage is the reason our customers consult us early in their vehicle development and design process of their next generation vehicles.

Recent innovations that highlight our ability to combine materials and product design expertise can be found in the following products:

Safe Seal™. Safe Seal™ is a body sealing product featuring sensors built into the seal capable of reversing power windows, doors and partitions to prevent injury.

Our new Multi-State Mount. The vacuum actuated mount responds to bi-modal and tri-modal inputs from the onboard vehicle computer. As a result of receiving inputs from the on-board vehicle computer

we are now able to more precisely tune the mounts in real time to the engine/vehicle frequency characteristics allowing us to dissipate engine noise and vibration during varying driving/road conditions.

Direct Injection Fuel Rail. Direct Injection Fuel Rails draw upon our innovative welding and brazing processes as well as our understanding of metal dynamics to create high pressure capability. This allows us to provide fuel rails for advanced direct injection engines which improve fuel economy and performance.

Stratlink™. Utilizing our internal material engineering capabilities, we have developed a rubber compound that performs equally with externally sourced compounds, which will significantly reduce cost.

PlastiCool. PlastiCool is a low cost, low weight, high temperature alternative to metal and rubber hose currently used in transmission cooling that offers a more robust joint design, improving quality and potentially reducing warranty costs. Additionally, because the material is smaller than current alternatives, it allows for greater design flexibility.

Continued emphasis on fuel efficiency, global platforms and emerging markets

We believe that by focusing on fuel efficiency, global platforms and emerging markets, we will be able to solidify and expand our global leadership position.

Fuel efficiency. With the recent shift in customer preferences toward light weight, fuel efficient vehicles, we intend to target small car, hybrid and alternative powertrains and increase the content we provide to these platforms. We believe that furthering our position in the small car and hybrid market and alternative powertrains market will allow us to increase market share, create greater economies of scale and provide more opportunities to partner with customers.

Global platforms. Our global presence makes us one of the select few manufacturers in our product areas who can take advantage of the many business opportunities that are becoming available worldwide as a result of the OEMs’ expanding emphasis on global platforms. Ten of our top twenty global vehicles in the fourth quarter of 2010 were based on global platforms which is evidence that customers look to us for global vehicle platform support.

Emerging markets.China, India and South America will continue to be regions of emphasis as their light vehicle market is projected to grow substantially as their economies continue to develop. In fact, seventy percent of global vehicle production is expected to come from emerging markets over the next five years (IHS Global Vehicle Production Forecast September 28, 2010).

Developing systems solutions and other value-added products

We believe that significant opportunities exist to grow by providing complete subsystems, modules and assemblies. As a leader in design, engineering and technical capabilities, we focus on improving products, developing new technologies and implementing more efficient processes in each of our product lines. Our body sealing products are visible to vehicle passengers and can enhance the vehicle’s aesthetic appeal, in addition to creating a barrier to wind, precipitation, dust and noise. Our AVS products are an important contributor to vehicle quality, significantly improving ride and handling. Our fluid handling modules and subsystems are designed to increase functionality and decrease costs to the OEM, which can be the deciding factor in winning new business.

Pursue acquisitions and alliances to enhance capabilities and accelerate growth

We intend to continue to selectively pursue complementary acquisitions and joint ventures to enhance our customer base, geographic penetration, scale and technology. Consolidation is an industry trend and is

encouraged by the OEMs’ desire for fewer supplier relationships. We believe we have a strong platform for growth through acquisitions based on our past integration successes, experienced management team, global presence and operational excellence. In addition, we believe joint ventures allow us to penetrate new markets with less risk and capital investment than acquisitions. We currently operate through several successful joint ventures, including those with Nishikawa Rubber Company, Zhejiang Saiyang Seal Products Co., Ltd., Guyoung Technology Co. Ltd. (“Guyoung”), Hubei Jingda Precision Steel Tube Industry Co., Ltd. (“Jingda”), Huayu- Cooper Standard Sealing Systems Co. Ltd. (“HASCO”) an affiliate of Shanghai Automotive Industry Corporation, and Toyoda Gosei Co., Ltd. (“Toyoda Gosei”).

Developing business in non-automotive markets

While the automotive industry will continue to be our core business, we supply other industries with products using our expertise and material compounding capabilities. As a result of the MAPS acquisition,For example, we acquiredsupply parts to customers in the technical rubber business which develops and producesdevelop and produce synthetic rubber products for a variety of industry applications, ranging fromincluding aircraft flooring, commercial flooring, insulating sheets for power stations, non-slip step coverings and rubber for appliances and construction applications. TheIn our technical rubber business has several thousandwe fabricate products from a wide variety of elastomer compounds to draw from and can custom fit almost any application.many applications.

Products:Products

We supply a diverse range of products on a global basis to a broad group of customers.customers across a wide range of vehicles. Our principal product lines are body and chassis products and fluid handling products. For the yearyears ended December 31, 2008, 2009, and 2010, body &and chassis products accounted for 66%, 65% and 66%, respectively, of our sales, and fluid handling products accounted for 61%34%, 35% and 39%34%, respectively, of net sales, respectively. For the year ended December 31, 2007, body & chassis and fluid handling productsour sales. The top ten vehicle platforms we supply accounted for 55% and 45% of net sales, respectively. Our top ten platforms by sales accounted for nearlyapproximately 28% of netour sales in 2008, with the remainder derived from a multitude32% of platforms, composedour sales in 2009 and 33% of a diversity of sport-utility, light truck, and various classes of sedans and other vehicles. For information related to our reportable segments, please refer to Note 18 to the Consolidated Financial Statements.

sales in 2010. Our principal product lines are described below:below.

Product Lines

Solutions

Products & Modules

Market Position*

Body & Chassis:

Body SealingProtect vehicle interiors from weather, dust and noise intrusionExtruded rubber and thermoplastic sealing, weather strip assemblies and encapsulated glass products#1 globally
Anti-VibrationControl and isolate noise and vibration in the vehicle to improve ride and handlingEngine and body mounts, dampers, isolators, springs, stamped or cast metal products and rubber products#3 North America
Fluid HandlingControl, sense, measure and deliver fluids and vapors throughout the vehiclePumps, tubes and hoses, connectors and valves (individually and in systems and subsystems)#2 globally

*Market positions are management’s estimates, which are based on reports prepared by industry consultants commissioned by us in 2008.

Body & Chassis Productschassis products

We are a leading global supplier of automotive body sealing and chassisAVS products. Body sealing products consist of components that protect vehicle interiors from weather, dust and noise intrusion. ChassisAVS products also referred to as Noise Vibration and Harshness products (NVH), isolate and reduce noise and vibration to improve ride and handling. Both Body sealing and ChassisAVS products lead to a better driving experience for all occupants. For the years ended December 31, 2008, 2009 and 2007,2010, we generated approximately 61%66%, 65% and 55%66%, respectively, of total revenue before corporate eliminationsrevenue from the sale of body and chassis products.products (before corporate eliminations).

Body Sealingsealing

Based on third party analysis, we are the leading global supplier of body sealing products to the automotive industry with approximately 21% of global market share.industry. We are known throughout the industry to be a leader in providing innovative design and manufacturing solutions for complex automotive designs.

Our body sealing products are comprised of ethylene propylene diene M-class rubber, (EPDM) (synthetic rubber)(“EPDM-synthetic rubber”) and thermoplastic elastomers, (TPE).or TPE. The typical production process involves:involves mixing of rubber/plasticrubber compounds, extrusion (supported with metal and woven wire carriers or unsupported), cutting, notching, forming, injection molding and assembly.

Below is a description of our primary sealing product by segments:products:

 

Product Category

  

Description

Door SealsDynamic seals

  

Designed and used for areas of the vehicle in which a gap exists between the vehicle body and movable closures. The seals function to isolate cockpit occupants and engine components from exterior climate conditions such as wind noise and water, providing the occupants with an improved vehicle experience.

Door sealsSectional seal design that fits the door structure and body cabin to seal rain, dust, and noise from the occupants of vehicles.

Body Seals

sealsSecondary seal used to provide further noise and aesthetic coverage of weldwelt flanges on the vehicle body.

Hood Seals

A seal locatedseals: Located on the body flanges in the engine compartment offering protectionprotecting against water and dust penetration while also reducing engine and road noise in the vehicles interiorvehicle cabin during high speed travel.

Trunk lid and lift gate seals: Located on body flanges in the trunk or lift gate compartment offering protection against water and dust penetration.

Lower door seals/rocker seals: Offers protection in the “rocker” area against water and dust penetration. Reduces road noise from entering the cabin during high speed driving.

Sunroof seals: Creates a narrow sealing space and minimize resistance for the sunroof.

Product CategoryStatic seals

  

Designed for stationary areas of the vehicle body. The seals function to isolate cockpit occupants from exterior climate conditions such as wind noise and water for improved vehicle experience.

Description

Belt Line SealsAline seal offering: Provides protection against water, dust and noise for driver and passenger door moveablemovable glass.

Lower Door Seals

A seal that offers protection in the “rocker” area against water and dust penetration. Reduces loud road noise entering the cabin and maintains quietness during high speed driving.
Glass Run Channel Assemblyrun assemblyEnables the movable door glass and door to form one surface, improving glass movement and sealing the vehicles’ interiorvehicle cabin from the exterior environment.

Trunk Lid and Lift gate Seals  

Quarter window trim/glass encapsulation: Integral pillar moldings and decorative plastic or metal corner trims seal fixed quarter side glass windows.

Appliqués: Also referred to as greenhouse moldings, these seals act as an aesthetic covering for A, seal located on the body flanges in the truck or lift gate compartment offering protection against water,B and dust penetration.C pillars.

Roof SealConvertible seals

  Convertible Roof Sealing: sealingSealing materials that combine compressibility with superior design for use on a convertible vehicle soft top weather sealing applications.
Sunroof SealsA seal required to create a narrow sealing space and minimize resistance for the sunroof.
Obstacle Detection SensorsAn extruded sensor that will reverse windows and doors. There are two types; 1) Proximity (P-ODS) and 2) Tactile (T-ODS). P-ODS sense the capacitance of an animate object and reverses the window/door systems with zero pinch force. T-ODS is a redundant feature that reverses window/door systems with a minimal pinch force. Both T and P ODS meet current global safety standards (e.g.FMVSS-118).application.

As a result of our global presence and reputation for innovation we are in the fortunate position to work with many of our OEM partners early in the development of their next generation vehicles. As a result of this “up-front” involvement, we have been able to develop innovative product and modular designs to meet these customers’ complex next generation vehicle designs.

ChassisAVS

Based on third party analysis, we are one of the leading suppliers of Chassis (NVH)AVS products in North America with approximately 14% of North American market share.America. We are known in North America for utilizing our advanced development and testing of NVHAVS products and subsystems to provide innovative solutions.

Our chassisAVS products include components manufactured with various types of rubber: rubber–natural rubber, butyl or EPDM in combination with stamped steel, aluminum or cast iron sub-components. Additionally, we supply brackets that are manufactured from stamped steel, aluminum or cast iron as individual final products. The typical production process for a rubber and metal product involves;involves mixing of rubber compounds, metal preparation (cleaning and primer application), injection molding of the rubber and metals, final assembly and testing as required based on specific products.

Below is a description of our primary chassis product by segments:products:

 

Product Category

  

Description

Body/Cradle Mountscradle mounts

  

Enable isolation of the interior cabin from the vehicle body reducing noise, vibration and harshness.

Hydro body mounts: A body mount filled with fluid providing spring rate and damping performance that varies according to frequency and displacement of vibration. Conventional (non-hydro) mounts provide fixed response. Hydromounts can provide a more comfortable ride in a vehicle during idling or traveling.

Engine MountsPowertrain mounts

  Secure

Secures and isolateisolates vehicle powertrain noise, vibration, and harshness from the uni-body or frame.

Transmission Mounts

Enablemounts: Enables mounting of transmission to vehicle body andwhile reducing vibration and harshness from the powertrain.

Torque Link

Controlstrut: Controls the fore and aft movement of transverse mounted engines within their compartment while isolating engine noise and vibration from the vehicle body.

Hydro engine mounts: This technology applies the same principles as the above mentioned hydro body mounts specific for an engine application.

Multi-State Engine Mounts: This new innovative technology responds up to three separate inputs from the on- board vehicle computer and utilizing vacuum actuation. The Multi State Mount is designed to improve isolation and ride control for Wide Open Throttle (WOT) and Part Open Throttle (POT), as well as provide increased rigidity during highway cruising.

Strut MountsSuspension

  Isolates vibration from the suspension and dampens vibration from the suspension into the interior cabin.
Spring Seats/ BumpersWork in conjunction with NVH systems to prevent offensive noise generation.
Suspension BushingAllows

Provides for needed flexibility in suspension components and eliminates NVHnoise vibration from entering intothe interior cabin.

Hydrobushing: Similar benefits to hydromounts; however, these are designed to be installed in a link or control versus a bracket attached to a vehicle.

Mass Damper

damperDeveloped to counteract a specific resonance at a specific frequency to eliminate undesirable vibration.

Hydromounts/

Hydrobushings

An engine mount or suspension bushing filled with fluid. A hydromount provides spring rate and damping performance that varies according to frequency and displacement of vibration.

Conventional (non hydro) mounts provide fixed response. Hydromounts can provide a more comfortable ride in a vehicle whether idling or traveling. Similar benefits are provided by hydrobushings.

As a result of our reputation for working with our customers on advanced development projects we are able to work with our OEM partners in North America to provide innovative solutions. One recent example of Cooper-Standard providing advanced development activities to enhance vehicle performance is on a new generation pick-up truck in the U.S. After extensive evaluation and cooperation with the customer, a new NVH product evolved, theBody Hydro Mount. This new hydromount is currently on the next generation truck enhancing the ride and comfort of the vehicle.

The B, C and D (small, compact and mid-size, respectively) global vehicle segments represent a growing percentage of worldwide vehicle production. To capitalize on this global growth of smaller car segments, CSA will utilize our global network of innovative manufacturing and design teams to provide consistent and continual support to our OEM partners’ global platform design and manufacturing initiatives. In the past year we have won new contracts from Toyota, Honda, Nissan/Renault, GM, Ford, Tata, BMW, VW, Fiat, PSA, Mahindra, and Maruti. Through our disciplined approach to business we have outperformed many of our competitors. Adherence to this disciplined approach will allow for additional conquest opportunities. We are the only supplier in the industry that is able to ensure interior cabin comfort by designing and manufacturing body and chassis products that work in concert to reduce NVH and control environment extremes. We will continue to focus on profitable global platforms, utilizing our global design and manufacturing footprint to win new business.

Fluid Handling Productshandling products

We are one of the leading global integrators of fluid subsystems and components that control, sense and deliver fluids.fluids and vapors in motor vehicles. We believe we are the second largest global provider of fluid handling system products manufactured in our industry. We offer an extensive product portfolio and are positioned to serve our diverse customer base around the world. Utilizing our core competencies in thermal management, emissions

management and fuel and brake delivery systems, we strive to create the highest value for our global customers by engineering unique solutions that anticipate and exceed their needs through design Design

for six sigma (DFSS),Six Sigma, seamless launches, lean enterprise principles and key strategic alliances. For the years ended December 31, 2008, 2009 and 2010, we generated approximately 34%, 35% and 34% of total corporate revenue from the sale of fluid handling products (before corporate eliminations).

We support the green technology trend as our customers expand towards hybrids and alternative powertrains required to meet future fuel efficiency demands. We provide thermal management solutions that enhance hybrid and electric vehicle powertrain cooling systems and offer bio-fuel compatible materials for alternative fuel vehicles. Our products support improved fuel economy initiatives with lightweight,light weight, high performance plastic and aluminum materials that reduce weight and offer an improved value equation. We specialize in complete fuel system integration encompassing products from the fuel rail to the fuel tank lines. Our low permeation fuel lines meet and exceed LEV II (low emission vehicle) and PZEV (partial zero emission vehicle) emission standards. We support reduced emissions through the control of the flow and temperature of exhaust gas.

Our fluid handling products are principally found in four major vehicle systems: thermal management; fuel and brake; emissions management; and power management. Below is a description of our primary fluid handling products:

 

Product Category

  

Description

Thermal Management

  Direct, control and transport oil, coolant, water and other fluids throughout the vehicle
  Engine oil cooling subsystems with over moldedover-molded connections  Transmission oil cooling subsystems
  Engine oil cooler tube and hose assemblies  Transmission oil cooler tube and hose assemblies
  Engine oil cooling quick connects  Engine oil level indicator tube assemblies
  Electro/mechanical water valves and pumps  Integrated thermostats and plastic housings
  Coolant subsystems  Bypass valves
  Radiator and heater hoses  Auxiliary oil coolers

Fuel & Brake

  Direct, control and transport fuel, brake fluid and vapors throughout the vehicle
  Fuel supply and return lines  Flexible brake lines
  Fuel/Vapor quick connects  Vacuum brake hoses
  Fuel/Vapor lines

Emissions Management

  Direct, control and transmit emission vapors and fluids throughout the vehicle
  Fully integrated exhaust gas recirculation modules  Exhaust gas recirculation valves

EGR coolers and bypass coolers

DPF lines
Exhaust gas recirculation tube assemblies

  

DPF lines

Secondary air tubes

Power Management

  Direct, control and transmit power management fluids throughout the vehicle
  High pressure roof lines  Power steering pressure and return lines
  Hydraulic clutch lines  Air bag tubes

To increase sales of fluid handling products, we intend to continue to capitalize on recent brake, fuel, and thermal management successes in Europe and North America; develop new complete module and assembly solutions, aimed at building a reputation as a “tube and hose integrator;” and create product improvements that provide greater functionality at an improved value to the customer. We plan to continue to invest in research and development to support these efforts and focus on advanced materials, and innovative processes. We will continue to leverage our green technologies to support growth in hybrid, electric and fuel cell powertrains, advanced fuel delivery systems, and future emissions regulations requiring critical components in regions where environmental regulations are stringent, such as in Europe.

For products such as rubber hose, steel tubing, and nylon tubing, innovations in advanced materials have led to the development of superior components. We have in-house tube manufacturing and coating capabilities in North America, Europe and Asia, allowing us to maintain a competitive edge over smaller fabricators. We believe these engineering and design capabilities, combined with intense focus on quality and customer service, have led to strong customer relationships and a growing customer base. We are targeting on increasing market share with European and Asian customers and continue to foster strategic business relations with large Tier I suppliers while staying in touch with all OEMs.

Supplies and Raw Materials

Raw material prices have fluctuated greatly in recent years. We have implemented strategies with both our suppliers and our customers to help manage extreme spikes in raw material prices. These actions include material substitutions increased use of hedging for market based commodities and leveraging our global buy.purchases. Global optimization also includes using benchmarks and selective sourcing from low cost regions. We have also made process improvements to ensure the most efficient use of materials through scrap reduction, as well as standardization of material specification to maximize leverage over a higher volume purchase.

The primary raw materials for our business include fabricated metal-based components, synthetic rubber, carbon black, natural rubber, process oil and natural rubber.plastic components.

Patents and Trademarks

We believe one of our competitive advantages is our track recordapplication of technological innovation.innovation to customer challenges. We hold over 600300 patents in key product technologies, such as Daylight Opening Modules, Engineered Stretched Plastics, Low Fuel Permeation Nylon Tubing and Quick Connect Fluid Couplings, as well as core process methods, such as molding, joining, and coating. Our patents are grouped into two major categories: (1) products, which relate to specific product invention claims for products which can be produced, and (2) processes, which relate to specific manufacturing processes that are used for producing products. The vast majority of our patents fall within the products category. We consider these patents to be of value and seek to protect our rights throughout the world against infringement. While in the aggregate these patents are important to our business, we do not believe that the loss or termination of any one of thempatent would materially affect our company. We continue to seek patent protection for our new products. Our patents will continueAdditionally, we develop significant technologies that we treat as trade secrets and choose not to be amortized overdisclose to the next fivepublic through the patent process, but which nonetheless provide significant competitive advantages and contribute to twelve years.our global leadership position in various markets.

We also have licensetechnology sharing and technology sharinglicensing agreements with various third parties, including Nishikawa Rubber Company, one of our joint venture partners in body sealing products. We have mutual agreements with Nishikawa Rubber Company for sales, marketing and engineering services on certain body sealing products we sell. Under those agreements, each party pays for services provided by the other and royalties on certain products for which the other party provides design or development services.

We own or have licensed several trademarks that are registered in many countries, enabling us to protect and market our products worldwide. During 2006, we purchased the right to use our current name from Cooper Tire.Key trademarks include StanPro® (aftermarket trim seals), SafeSeal™ (obstacle detection sensors), and Stratlink™ (proprietary TPV polymer).

Seasonality

Historically, sales to automotive customers are lowest during the months prior to model changeovers and during assembly plant shutdowns. However, economic conditions and consumer demand may change the traditional seasonality of the industry asand lower production may prevail without the impact of seasonality. In previous years,Historically, model changeover periods have typically resulted in lower sales volumes during July, August and December. During these periods of lower sales volumes, profit performance is lower,reduced but working capital often improves due to continuingthe continued collection of accounts receivable.

Competition

We believe that the principal competitive factors in our industry are price, quality, service, performance, design and engineering capabilities, innovation and timely delivery. We believe that our capabilities in these core competencies are integral to our position as a market leader in each of our product lines. In Body & Chassis Our body and chassis

products we compete with Toyoda Gosei, Trelleborg,Tokai, Vibracoustic, Paulstra, Hutchinson, Henniges, Meteor, SaarGummi and Standard Profil, among others. In Fluid HandlingOur fluid handling products we compete with TI Automotive, Martinrea, Hutchinson, Conti-Tech, Pierburg and Gustav Wahler, along with numerous smaller companies in this competitive market.

Industry Structure

The automotive industry has historically beenis one of the world’s largest and most competitive. Recent economic conditions have changed the traditional structureConsumer demand for new vehicles largely determines sales and production volumes of the industry. The industry is mature in North Americaglobal OEMs, and Europecomponent suppliers rely on high levels of vehicle sales and now undergoing broad sales reductions as consumers are holding onto their vehicles longer. Vehicle production in Asia, particularly in China and India, is expected to account for a relatively larger share of worldwide vehicle production as these economies expand.be successful.

The ability for consumers to obtain financing is an important factor in the sale of new vehicles. Recently, the tightening of credit has put significant pressure on the industry prompting a consolidation among OEMs, and major shifts in product offerings and market share positions.

These developments have also led to a more challenging environment for automotive suppliers. The automotive supplysupplier industry is generally characterized by high barriers to entry, significant start-up costs and long-standing customer relationships. SuppliersThe criteria by which OEMs judge automotive suppliers include price, quality, service, performance, design and engineering capabilities, innovation, timely delivery and, more recently, financial stability. Over the last decade, those suppliers that have not diversified relativebeen able to achieve manufacturing scale, reduce structural costs, diversify their customer base and geographic mix may be unableestablish a global manufacturing footprint have been successful.

Among the leading drivers of new vehicle demand is the availability of consumer credit to competefinance purchases. Beginning in late 2008, turmoil in the future global credit markets and the recession in the United States and global economies led to a severe contraction in the availability of consumer credit. As a result, global vehicle sales volumes plummeted, led by severe declines in the mature North American and European markets. During 2009, North American light vehicle industry production declined by approximately 32% from 2008 levels to 8.6 million units, while European light vehicle industry production declined by approximately 20% from 2008 levels to 16.3 million units. The decline was less pronounced in Asia, where volumes were down only approximately 1% from 2008 levels to 26.6 million units. This resilience was largely attributable to the continued expansion of the Chinese and Indian markets, both of which are expected to continue to increase as these structural changes take hold. Baseda share of the global automotive market in the coming years.

The severe decline in vehicle sales and production in 2009 led to major restructuring activity in the industry, particularly in North America. GM and Chrysler reorganized through Chapter 11 bankruptcy proceedings and the Detroit 3 undertook other strategic actions, including the divestiture or discontinuance of non-core businesses and brands and the acceleration or broadening of operational and financial restructuring activities. A number of significant automotive suppliers, including us, restructured through Chapter 11 bankruptcy proceedings or through other means.

Several significant trends and developments are now contributing to improvement in the automotive supplier industry. These include improved retail vehicle sales and production in North America in the fourth quarter of 2009 and throughout 2010, a more positive credit environment, the continued growth of new markets in Asia, particularly China, and increased emphasis on this, it is believed that industry consolidations will provide ample opportunities for well positioned global suppliers.“green” and other innovative technologies.

Customers

We are a leading supplier to the U.S. Automakers (Detroit 3)Detroit 3 in each of our product categories and are increasing our presence with European and Asian OEMs. During the year ended December 31, 2008,2010, approximately 25%28%, 16%, 7%, 6% and 7%6% of our sales were to Ford, General Motors,GM, Fiat, Volkswagen/Audi and Chrysler, respectively, as compared to 27%31%, 20%14%, 8%, 7% and 8%4%, respectively, for the year ended December 31, 2007, respectively.2009. Our other major customers include Fiat,OEMs such as Renault/Nissan, PSA Peugeot Citroën, BMW, Daimler and Volkswagen.various Indian and Chinese OEMs. We also sell products to Visteon/ACH, Toyota, Porsche, and through NISCO,Nishikawa Standard Company (“NISCO”), Honda. Our business with any given customer is typically split among several contracts for different parts on a number of platforms.

Backlog

Our MAPS acquisitionsOEM sales are generally based upon purchase orders issued by the OEMs, with updated releases for volume adjustments, and as such we do not have added significant volume with Fiat, BMW, Daimler, Volkswagen/Audi and various Indian and Chinese OEMs.a backlog of orders at any point in time. Once selected to supply products for a particular platform, we typically supply those products for the platform life, which is normally six to eight years, although there is no guarantee that this will occur. In addition, when we are the incumbent supplier to a given platform, we believe we have a competitive advantage in winning the redesign or replacement platform.

Research and Development

We operate tennine design, engineering, and administration facilities throughout the world and employ 605approximately 465 research and development personnel, some of whom reside at our customers’ facilities. We utilize Design for Six Sigma and other methodologies that emphasize manufacturability and quality. We are aggressively pursuing innovations which assist in resource conservation with particular attention to developing materials that are lighter weight and made of materials that can be recycled.recyclable materials. Our development teams are also working closely with our customers to design and deliver thermal management solutions for cooling electric motors and batteries for new hybrids. We also devote considerable research and development resources into AVS, resulting in high value, state-of-the-art solutions for our customers. These activities are applied not only in our AVS product lines, but also in vehicle sealing (noise transmission isolation and abatement via vehicle windows and doors), fuel delivery systems (isolation of fuel injectors on fuel rails) and thermal management (noise and vibration free coolant pumps and valves). We spend significantly each year to maintain and enhance our technical centers, enabling us to quickly and effectively respond to customer demands. We spent $74.8$81.9 million, $77.2$62.9 million, and $81.9$68.8 million in 2006, 2007,2008, 2009, and 2008,2010, respectively, on research and development.

Joint Ventures and Strategic Alliances

Joint ventures represent an important part of our business, both operationally and strategically. We have used joint ventures to enter into new geographic markets such as China, Korea, and India, to acquire new customers and to develop new technologies. In entering new geographic markets, teaming with a local

partner can reduce capital investment by leveraging pre-existing infrastructure. In addition, local partners in these markets can provide knowledge and insight into local practices and access to local suppliers of raw materials and components. In North America, joint ventures have proven valuable in establishing new relationships with NAMs.North American manufacturers. For example, we have business with Honda through our NISCO joint venture. In 2005, we acquired a 20% equity interest in and expanded our technical alliance with Guyoung, a Korean supplier of metal stampings, which built a manufacturing facility in Alabama that services Hyundai. In 2006, we finalized two joint venture agreements with Jingda, one of the largest tube manufacturers in China to expand our presence in that country. As part of the acquisition of the MAPS business in 2007, we acquired a 47.5% equity interest in Shanghai SAIC-MetzelerHuayu-Cooper Standard Sealing Systems Co. Ltd. (formerly known as Shanghai SAIC-Metzler Sealing Systems Co. Ltd.), a joint venture with SAIC,Shanghai Automotive Industry Corporation, which also owns a 47.5% equity interest, and Shanghai Qinpu Zhaotun Collective Asset Management Company, which owns the remaining 5% equity interest. This joint venture business is the leading manufacturer of automotive sealing products in China. Also, in 2007, we acquired a 74% equity interest in MAP India, a joint venture with Toyoda Gosei Co., Ltd., which owns the remaining 26% equity interest. MAP India is a leading manufacturer of automotive sealing products in India.

Geographic Information

In 2010, we generated approximately 52% of our sales in North America, 34% in Europe, 6% in South America and 8% in Asia/Pacific. Approximately 27% of our sales were generated from our United States operations and approximately 73% of our sales were generated from our operations in all other countries, including 14%, 11% and 10% generated from our Mexican, German and Canadian operations, respectively.

In 2009, we generated approximately 47% of our sales in North America, 40% in Europe, 6% in South America and 7% in Asia/Pacific. Approximately 27% of our sales were generated from our United States operations and approximately 73% of our sales were generated from our operations in all other countries, including 14%, 11% and 9% generated from our German, Mexican and Canadian operations, respectively.

In 2008, we generated approximately 48% of netour sales in North America, 42% in Europe, 5% in South America and 5% in Asia/Pacific. Approximately 17% and 12%26% of our revenuessales were generated from our GermanUnited States operations and Canadian operations, respectively.

In 2007, we generated approximately 61% of net sales in North America, 31% in Europe, 5% in South America, and 3% in Asia/Pacific. Approximately 15% and 13%74% of our revenuessales were generated from our operations in all other countries, including 17%, 12% and 10% generated from our German, Canadian and GermanMexican operations, respectively.

Employees

As of December 31, 2010, we had approximately 19,000 full-time and temporary employees. We maintain good relations with both our union and non-union employees and, in the past ten years, have not experienced any major work stoppages. We have negotiatedrenegotiated some of our domestic and international union agreements in 20082010 and have several contracts set to expire in the next twelve months. As of December 31, 2008,2010, approximately 46%31% of our employees were represented by unions and approximately 10%14% of ourthe unionized employees were union represented employees located in the United States.

As of December 31, 2008, we had 18,046 full-time and temporary employees.

Environmental

We are subject to a broad range of federal, state, and local environmental and occupational safety and health laws and regulations in the United States and other countries, including those governingregulations governing: emissions to air;air, discharges to water;water, noise and odor emissions; the generation, handling, storage, transportation, treatment, and disposal of waste materials; the cleanup of contaminated properties; and human health and safety. For example, as an ownerWe may incur substantial costs associated with hazardous substance contamination or exposure, including cleanup costs, fines, and operator of realcivil or criminal sanctions, third party property or natural resource damage, personal injury claims, or costs to upgrade or replace existing equipment as a generatorresult of hazardous substances, we may beviolations of or liabilities under environmental laws or the failure to maintain or comply with environmental permits required at our locations. In addition, many of our current and former facilities are located on properties with long histories of industrial or commercial operations and some of these properties have been subject to certain environmental cleanup liability, regardlessinvestigations and remediation activities. We maintain environmental reserves for certain of fault, pursuant tothese sites, which we believe are adequate. Because some environmental laws (such as the Comprehensive Environmental Response, Compensation and Liability Act and analogous state laws) can impose liability retroactively and regardless of fault on potentially responsible parties for the entire cost of cleanup at currently or analogous laws,formerly owned or operated facilities, as well as to claimssites at which such parties disposed or arranged for harm to healthdisposal of hazardous waste, we could become liable for investigating or propertyremediating contamination at our current or for natural resource damages arising out of contaminationformer properties or exposure to hazardous substances. Several of ourother properties have been the subject of remediation activities to address historic contamination. In general, we believe we are(including offsite waste disposal locations). We may not always be in substantialcomplete compliance with theall applicable requirements under suchof environmental laws andor regulations, and our continued compliance is not expectedwe may receive notices of violation or become subject to enforcement actions or incur material costs or liabilities in connection with such requirements. In addition, new environmental requirements or changes to interpretations of existing requirements, or in their enforcement, could have a material adverse effect on our financial condition or thebusinesses, results of operations, and financial condition. For example, while we are not large emitters of greenhouse gases, laws, regulations and certain regional initiatives under consideration by the U.S. Congress, the U.S. Environmental Protection Agency, and various states, and in effect in certain foreign jurisdictions, could result in increased operating costs to control and monitor such emissions. We have made and will continue to make expenditures to comply with environmental requirements. While our operations. We expect that additional requirements with respectcosts to defend and settle claims arising under environmental matters will be imposedlaws in the future. Our expense and capital expenditures for environmental matters at our facilitiespast have not been material, in the past, nor are expected tosuch costs may be material in the future.

Market Data

Some market data and other statistical information used throughout this Annual Report on Form 10-K is based on data available from IHS Automotive (formerly CSM Worldwide), an independent market research firm.

Other data is based on good faith estimates, which are derived from our review of internal surveys, as well as third party sources. Although we believe all of these third party sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness. To the extent that we have been unable to obtain information from third party sources, we have expressed our belief on the basis of our own internal analyses of our products and capabilities in comparison to our competitors.

Available Information

We make available free of charge on or through our Internet website (http://www.cooperstandard.com) our 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 amended, (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S. Securities and Exchange Commission (“SEC”).

Executive Officers

Set forth below is certain information with respect to the current executive officers of the Company.

Name

Age

Position

James S. McElya

63Chairman, Director and Chief Executive Officer

Edward A. Hasler(1)

61President

Allen J. Campbell

53Executive Vice President and Chief Financial Officer

Keith D. Stephenson

50Chief Operating Officer

Michael C. Verwilst

57Vice President, Mergers & Acquisitions

Timothy W. Hefferon

57Vice President, General Counsel and Secretary

Kimberly Dickens

49Vice President, Human Resources

Helen T. Yantz

50Vice President and Corporate Controller

(1)On December 9, 2010, Mr. Hasler notified the Company that he would be retiring from his position as President of the Company effective July 1, 2011.

James S. McElya is the Chairman of our board of directors and our Chief Executive Officer, a position he has held since March 2009 and previously held from September 2006 to July 2008. He served as executive Chairman from July 2008 to March 2009. Mr. McElya served as President and Chief Executive Officer from the date of the 2004 Acquisition to September 2006. He has been a member of our board of directors since the 2004 Acquisition. He was President, Cooper-Standard Automotive and a corporate Vice President of Cooper Tire & Rubber Company from June 2000 until the 2004 Acquisition. Mr. McElya has over 33 years of automotive experience. He was previously President of Siebe Automotive Worldwide, a division of Invensys, PLC and spent 22 years with Handy & Harman in various executive management positions, including President, Handy & Harman Automotive, and Corporate Vice President of the parent company. Mr. McElya is the past Chairman and current member of the board of directors of the Motor & Equipment Manufacturers Association. He is a past Chairman and current member of the board of directors of the Original Equipment Supplier Association, and he is an advisor to the board of directors of the National Alliance for Accessible Golf. Mr. McElya is a member of the board of directors of Affinia Group.

Edward A. Hasler is our President, a position he has held since May 2010. Mr. Hasler served as President and Chief Executive Officer from July 2008 to March 2009 and as Vice Chairman and President, North America from March 2009 until May 2010. He served as President and Chief Operating Officer from September 2006 to July 2008. Mr. Hasler was President, Global Sealing Systems from the date of the 2004 Acquisition to September 2006. He was the President of the Global Sealing Systems Division and a corporate Vice President of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition. Mr. Hasler was employed from 2000 to 2001 in Germany as Managing Director,

Europe for GDX Corporation. Prior to joining GDX, Mr. Hasler had been with Cooper Tire for nearly 15 years. At Cooper Tire, Mr. Hasler held several senior posts including Vice President, Operations; and Vice President, Controller. He has both an MBA and a BS in Business Administration.

Allen J. Campbell is our Executive Vice President and Chief Financial Officer, a position he has held since March 17, 2011 previously serving as the Vice President and Chief Financial Officer since the 2004 Acquisition. He was Vice President, Asian Operations of the Cooper-Standard Automotive division of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition and served as Vice President, Finance of the division from 1999 to 2003. Prior to joining Cooper Tire, Mr. Campbell was with The Dow Chemical Company for 18 years and held executive finance positions for both U.S. and Canadian operations. Mr. Campbell is a certified public accountant and received his MBA in Finance from Xavier University.

Keith D. Stephenson is our Chief Operating Officer, a position he has held since December 2010. He served as President, International from March 2009 to December 2010. He served as President, Global Body & Chassis Systems from June 2007 to March 2009. Mr. Stephenson was Chief Development Officer at Boler Company from January 2004 until October 2006. From 1985 to January 2004, he held various senior positions at Hendrickson, a division of Boler Company, including President of International Operations, Senior Vice President of Global Business Operations and President of the Truck Systems Group.

Michael C. Verwilst is our Vice President, Mergers & Acquisitions, a position he has held since March 2009. Previously, Mr. Verwilst served as President, Global Fluid Systems from June 2007 to March 2009. Mr. Verwilst joined the Company in 2003 as the Vice President, Strategic Planning and Business Development. Prior to joining the Company, Mr. Verwilst was a principal with Corporate Improvement Partners from 2001 to 2003. Mr. Verwilst held many executive positions with Federal-Mogul Corporation from 1978 to 2001, including Senior Vice President of Powertrain Systems and Vice President & General Manager of Powertrain Systems—Americas.

Timothy W. Hefferon is our Vice President, General Counsel and Secretary, a position he has held since the 2004 Acquisition. Prior to joining the Company, Mr. Hefferon was with ThyssenKrupp USA Inc. from 1999 to 2004, where he served as Deputy General Counsel and with Federal-Mogul Corporation from 1994 to 1999, where he served as Associate General Counsel. He was a partner from 1985 to 1994 of Hill Lewis, a Detroit-based law firm, where he served on the executive committee. Mr. Hefferon received his law degree from the University of Michigan Law School.

Kimberly Dickens is our Vice President, Human Resources, a position she has held since March of 2008. Prior to joining the Company, Ms. Dickens served as Vice President, Human Resources at Federal Signal Corporation from 2004 to 2008. Previously, Ms. Dickens held numerous plant and divisional human resource positions at Borg Warner Corporation beginning in 1988, ultimately serving as Vice President, Human Resources from 2002 to 2004. Ms. Dickens has a BS in Industrial Health and Safety from Oakland University and an MBA from Lewis University.

Helen T. Yantz is our Vice President and Corporate Controller, a position she has held since January 2005. Previously, Ms. Yantz held the position of Director of Accounting and Assistant Vice President from 2001 to 2005. Prior to joining the Company, Ms. Yantz was Manager of Financial Reporting at Trinity Health Systems from 2000 to 2001. Previously, Ms. Yantz held various positions in finance at CMS Generations Co., a subsidiary of CMS Energy, from 1990 to 2000, ultimately serving as the Director of Accounting. Ms. Yantz is a certified public accountant and has a BS from Arizona State University.

Forward-Looking StatementsAvailable Information

This Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We make forward-looking statements in thisavailable free of charge on or through our Internet website (http://www.cooperstandard.com) our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and may makeamendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as soon as reasonably practicable after we electronically file such statements in future filingsmaterial with, or furnish it to, the SEC. We may also make forward-looking statements in our press releases or other public or stockholder communications. These

forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends,U.S. Securities and other information that is not historical information and, in particular, appear under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors” and “Business.” When used in this report, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs, and projections will be achieved.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-K. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report are set forth in this Form 10-K, including under Item 1A. “Risk Factors”Exchange Commission (“SEC”).

As stated elsewhere in this Form 10-K, such risks, uncertainties, and other important factors include, among others: our substantial leverage; limitations on flexibility in operating our business contained in our debt agreements; our dependence onExecutive Officers

Set forth below is certain information with respect to the automotive industry;current executive officers of the prospect of continued reduced worldwide automotive production levels; a deterioration inCompany.

Name

Age

Position

James S. McElya

63Chairman, Director and Chief Executive Officer

Edward A. Hasler(1)

61President

Allen J. Campbell

53Executive Vice President and Chief Financial Officer

Keith D. Stephenson

50Chief Operating Officer

Michael C. Verwilst

57Vice President, Mergers & Acquisitions

Timothy W. Hefferon

57Vice President, General Counsel and Secretary

Kimberly Dickens

49Vice President, Human Resources

Helen T. Yantz

50Vice President and Corporate Controller

(1)On December 9, 2010, Mr. Hasler notified the Company that he would be retiring from his position as President of the Company effective July 1, 2011.

James S. McElya is the financial condition of certainChairman of our customersboard of directors and suppliers; availabilityour Chief Executive Officer, a position he has held since March 2009 and cost of raw materials; our dependence on certain major customers; competition in our industry; our conducting operations outside the United States; the uncertainty of our abilitypreviously held from September 2006 to achieve expected Lean savings; our exposureJuly 2008. He served as executive Chairman from July 2008 to product liabilityMarch 2009. Mr. McElya served as President and warranty claims; labor conditions; our vulnerability to rising interest rates; our ability to meet our customers’ needs for new and improved products in a timely manner; our ability to attract and retain key personnel; the possibility that our owners’ interests will conflict those of investors; our status as a stand-alone company; our legal rights to our intellectual property portfolio; our underfunded pension plans; environmental and other regulation; and the possibility that our acquisition strategy will not be successful. There may be other factors that may cause our actual results to differ materiallyChief Executive Officer from the forward-looking statements.

We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

We do not undertake, and we specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of unanticipated events or circumstances after the date of such statements.

Item 1A.Risk Factors

Our business and financial condition can be impacted by a number of factors, including the risks described below and elsewhere in this Annual Report on Form 10-K. Any of these risks could cause our actual results to vary materially from recent or anticipated results and could materially and adversely affect our business and financial condition.

We are highly dependent on the automotive industry, and a prolonged contraction in automotive sales and production volumes could have a material adverse affect on our results of operations and liquidity.

The great majority of our customers are OEMs and their suppliers. Automotive sales and production declined substantially in the second half of 2008 and are not expected to recover significantly in the near future. This will have a continuing negative impact on our sales, liquidity and results of operations, as the demand for our products decreases as the volume of automotive production decreases.

The negative impact on our financial condition and results of operations could have negative effects on us under our credit facilities by affecting our ability to comply with the financial ratio covenants contained in our credit facilities. An inability to comply would require us to seek waivers or amendments of such covenants. There is no guarantee that such waivers or amendments would be obtained and, even if they were obtained, we would likely incur additional costs. An inability to obtain any such waiver or

amendment could result in a breach and a possible event of default under our credit facilities, which could allow the lenders to discontinue lending, terminate any commitments they have to provide us with additional funds and/or declare amounts outstanding to be due and payable. There is no assurance that we would have sufficient funds to repay such obligations or that we could obtain alternative funding on terms acceptable to us.

Our liquidity could also be adversely impacted if our suppliers reduced their normal trade credit terms as the result of any decline in our financial condition or if our customers extended their normal payment terms. If either of these situations occurred, we would need to rely on other sources of funding to cover the additional gap between the time we pay our suppliers and the time we receive corresponding payments from our customers.

The financial conditions of OEMs, particularly the Detroit 3, may adversely affect our results of operations and financial condition.

The deteriorating financial condition of the OEMs, particularly the Detroit 3, could have adverse impacts on our financial condition in addition to those resulting directly from lower productions volumes (as described in the preceding risk factor). The Detroit 3 are undertaking, or may undertake, various forms of restructuring initiatives which may ultimately include, in certain cases, reorganization under bankruptcy laws. Chrysler and General Motors have sought funding and Ford has sought a line of credit from the U.S. government due to the significant financial difficulties they face. There is no assurance that the Detroit 3 will be able to meet the conditions imposed on them in connection with any such government assistance or that any such assistance will enable them to remain viable. The filing of bankruptcy proceedings by any of the Detroit 3, in addition to potentially impacting the ability of the filing company to continue to sell their products at sustainable levels and remain viable customers, could impact the collectability of our accounts receivable owing from the filing company.

A prolonged contraction in automotive sales and production volumes and the financial conditions of OEMs could adversely affect the viability of our supply base.

Our suppliers are subject to many of the same consequences that would impact us as a result of a prolonged contraction in automotive sales and production volumes. In addition, many of our suppliers also directly supply the Detroit 3, and the financial condition of the Detroit 3, particularly any bankruptcy filing, could impact the collectability of their accounts receivable. Depending on each supplier’s financial condition and access to capital, its viability could be threatened by such conditions or events which could impact its ability to meet its contractual commitments to us and consequently impact our ability to meet our own commitments to our customers. There is no assurance that we would be able to establish alternative sources of supply in time to meet such commitments and avoid potential penalties and damages that could result from such failure.

Disruptions in the financial markets are adversely impacting the availability and cost of credit which could continue to negatively affect our business.

Disruptions in the financial markets, including the bankruptcy, insolvency or restructuring of certain financial institutions, have adversely impacted the availability and cost of credit for many companies and consumers and had a negative impact on the global economy, consumer confidence, and the demand for automotive products. There is no assurance that government efforts to respond to these disruptions, or other circumstances, will restore consumer confidence, improve the liquidity of the financial markets or otherwise improve conditions in the automotive industry.

Our substantial leverage could harm our business by limiting our available cash and our access to additional capital and, to the extent of our variable rate indebtedness, exposes us to interest rate risk.

We are highly leveraged. As of December 31, 2008, our total consolidated indebtedness was $1,144.1 million. Our leverage increased upon the closing of our acquisition of MAPS, because we financed part of the acquisition with an incremental term loan under the Second Amendment to the Credit Agreement.

Our high degree of leverage could have important consequences, including:

It may limit our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes on favorable terms or at all;

A substantial portion of our cash flows from operations must be dedicated to the payment of principal and interest on our indebtedness and thus will not be available for other purposes, including our operations, capital expenditures, and future business opportunities;

The debt service requirements of our other indebtedness could make it more difficult for us to make payments on the Senior Notes and Senior Subordinated Notes issued by Cooper-Standard Automotive Inc. in connection with the 2004 Acquisition (the “Notes”);

It may place us atto September 2006. He has been a competitive disadvantage compared to thosemember of our competitors that are less highly leveraged;board of directors since the 2004 Acquisition. He was President, Cooper-Standard Automotive and a corporate Vice President of Cooper Tire & Rubber Company from June 2000 until the 2004 Acquisition. Mr. McElya has over 33 years of automotive experience. He was previously President of Siebe Automotive Worldwide, a division of Invensys, PLC and spent 22 years with Handy & Harman in various executive management positions, including President, Handy & Harman Automotive, and Corporate Vice President of the parent company. Mr. McElya is the past Chairman and current member of the board of directors of the Motor & Equipment Manufacturers Association. He is a past Chairman and current member of the board of directors of the Original Equipment Supplier Association, and he is an advisor to the board of directors of the National Alliance for Accessible Golf. Mr. McElya is a member of the board of directors of Affinia Group.

It may restrictEdward A. Hasler is our abilityPresident, a position he has held since May 2010. Mr. Hasler served as President and Chief Executive Officer from July 2008 to make strategic acquisitions or cause usMarch 2009 and as Vice Chairman and President, North America from March 2009 until May 2010. He served as President and Chief Operating Officer from September 2006 to make non-strategic divestitures;July 2008. Mr. Hasler was President, Global Sealing Systems from the date of the 2004 Acquisition to September 2006. He was the President of the Global Sealing Systems Division and

We may be more vulnerable than a less highly-leveraged companycorporate Vice President of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition. Mr. Hasler was employed from 2000 to 2001 in Germany as Managing Director,

Europe for GDX Corporation. Prior to joining GDX, Mr. Hasler had been with Cooper Tire for nearly 15 years. At Cooper Tire, Mr. Hasler held several senior posts including Vice President, Operations; and Vice President, Controller. He has both an MBA and a downturnBS in general economic conditions orBusiness Administration.

Allen J. Campbell is our Executive Vice President and Chief Financial Officer, a position he has held since March 17, 2011 previously serving as the Vice President and Chief Financial Officer since the 2004 Acquisition. He was Vice President, Asian Operations of the Cooper-Standard Automotive division of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition and served as Vice President, Finance of the division from 1999 to 2003. Prior to joining Cooper Tire, Mr. Campbell was with The Dow Chemical Company for 18 years and held executive finance positions for both U.S. and Canadian operations. Mr. Campbell is a certified public accountant and received his MBA in Finance from Xavier University.

Keith D. Stephenson is our business, or we may be unableChief Operating Officer, a position he has held since December 2010. He served as President, International from March 2009 to carry outDecember 2010. He served as President, Global Body & Chassis Systems from June 2007 to March 2009. Mr. Stephenson was Chief Development Officer at Boler Company from January 2004 until October 2006. From 1985 to January 2004, he held various senior positions at Hendrickson, a division of Boler Company, including President of International Operations, Senior Vice President of Global Business Operations and President of the desired amountTruck Systems Group.

Michael C. Verwilst is our Vice President, Mergers & Acquisitions, a position he has held since March 2009. Previously, Mr. Verwilst served as President, Global Fluid Systems from June 2007 to March 2009. Mr. Verwilst joined the Company in 2003 as the Vice President, Strategic Planning and Business Development. Prior to joining the Company, Mr. Verwilst was a principal with Corporate Improvement Partners from 2001 to 2003. Mr. Verwilst held many executive positions with Federal-Mogul Corporation from 1978 to 2001, including Senior Vice President of capital spendingPowertrain Systems and Vice President & General Manager of Powertrain Systems—Americas.

Timothy W. Hefferon is our Vice President, General Counsel and Secretary, a position he has held since the 2004 Acquisition. Prior to support our growth.

Our cash paid for interest forjoining the year ended December 31, 2008Company, Mr. Hefferon was $95.4 million, which excludes the amortizationwith ThyssenKrupp USA Inc. from 1999 to 2004, where he served as Deputy General Counsel and with Federal-Mogul Corporation from 1994 to 1999, where he served as Associate General Counsel. He was a partner from 1985 to 1994 of $5.0 million of debt issuance costs. At December 31, 2008, we had $597.2 million of debt with floating interest rates, including $174.8 million managed by the use of interest rate swap contracts to convert the variable rate characteristic to fixed rate. If interest rates increase, assuming no principal repayments or use of financial derivatives, our debt service obligationsHill Lewis, a Detroit-based law firm, where he served on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash available for servicing our indebtedness, including the Notes, would decrease. After considering the effects of certain interest rate swap contracts we entered into during 2008, a 1% increase in the average interest rate of our variable rate indebtedness would increase future interest expense by approximately $4.2 million per year.

Our debt agreements contain restrictions that limit our flexibility in operating our business.

The senior credit agreement and the indentures under which the Notes were issued contain a number of significant covenants that, among other things, restrict our ability to:

incur additional indebtedness or issue redeemable preferred stock;

pay dividends and repurchase our capital stock;

issue stock of subsidiaries;

make certain investments;

enter into agreements that restrict dividends from subsidiaries;

transfer or sell assets;

enter into transactions with our affiliates;

incur liens;

engage in mergers, amalgamations, or consolidations; and

make capital expenditures.

In addition, under the senior credit agreement, we are required to satisfy specified financial ratios and tests. Our ability to comply with those provisions may be affected by events beyond our control, and may limit our ability to comply with those required ratios and tests.

We may be unable to comply with the financial covenants in our senior credit agreement.

The financial covenants in our senior credit agreement require us to achieve certain financial ratios based on levels of earnings before interest, taxes, depreciation, amortization and certain adjustments (EBITDA), as defined in the senior credit agreement. A failure to comply with these or other covenants in the senior credit facility could, if we were unable to obtain a waiver or another amendment of the covenant terms, cause an event of default that could cause our loans under the senior credit facility to become immediately due and payable. In addition, additional waivers or amendments could substantially increase the cost of borrowing.

Increasing costs for or reduced availability of manufactured components and raw materials may adversely affect our profitability.

The principal raw materials we purchase include fabricated metal-based components, synthetic rubber, carbon black, and natural rubber. Raw materials comprise the largest component of our costs, representing approximately 47% of our total costs during the year ended December 31, 2008. A significant increase in the price of these items could materially increase our operating costs and materially and adversely affect our profit margins because it is generally difficult to pass through these increased costs to our customers. For example, we have experienced significant price increases in our raw steel and steel-related components purchases as a result of increased global demand. While these increases fell off in the second half of 2008, continued volatility in the global market presents risk in forecasting cost.

Because we purchase various types of raw materials and manufactured components, we may be materially and adversely affected by the failure of our suppliers of those materials to perform as expected. This non-performance may consist of delivery delays or failures caused by production issues or delivery of non-conforming products. The risk of non-performance may also resultexecutive committee. Mr. Hefferon received his law degree from the insolvency or bankruptcyUniversity of one or moreMichigan Law School.

Kimberly Dickens is our Vice President, Human Resources, a position she has held since March of our suppliers. Our suppliers’ ability2008. Prior to supply productsjoining the Company, Ms. Dickens served as Vice President, Human Resources at Federal Signal Corporation from 2004 to us is also subject2008. Previously, Ms. Dickens held numerous plant and divisional human resource positions at Borg Warner Corporation beginning in 1988, ultimately serving as Vice President, Human Resources from 2002 to 2004. Ms. Dickens has a number of risks, including availability of raw materials, such as steelBS in Industrial Health and natural rubber, destruction of their facilities, or work stoppages. In addition, our failure to promptly pay, or order sufficient quantities of inventorySafety from our suppliers may increase the cost of products we purchase or may lead to suppliers refusing to sell products to us at all. Our efforts to protect againstOakland University and to minimize these risks may not always be effective.an MBA from Lewis University.

We could be adversely affected if we are unableHelen T. Yantz is our Vice President and Corporate Controller, a position she has held since January 2005. Previously, Ms. Yantz held the position of Director of Accounting and Assistant Vice President from 2001 to continue2005. Prior to compete successfullyjoining the Company, Ms. Yantz was Manager of Financial Reporting at Trinity Health Systems from 2000 to 2001. Previously, Ms. Yantz held various positions in the highly competitive automotive parts industry.

The automotive parts industry is highly competitive. We face numerous competitors in eachfinance at CMS Generations Co., a subsidiary of the product lines we serve. In general, there are three or more significant competitors for most of the products offered by our company and numerous smaller competitors. We also face increased competition for certain of our productsCMS Energy, from suppliers producing in lower-cost countries such as Korea and China, especially for certain lower-technology noise, vibration and harshness control products that have physical characteristics that make long-distance shipping more feasible and economical. We may not be able1990 to continue to compete favorably and increased competition in our markets may have a material adverse effect on our business.

We are subject to other risks associated with our non-U.S. operations.

We have significant manufacturing operations outside the United States, including joint ventures and other alliances. Our operations are located in 18 countries and we export to several other countries. In 2008, approximately 74% of our net sales originated outside the United States. Risks are inherent in international operations, including:

exchange controls and currency restrictions;

currency fluctuations and devaluations;

changes in local economic conditions;

changes in laws and regulations, including the imposition of embargos;

exposure to possible expropriation or other government actions; and

unsettled political conditions and possible terrorist attacks against American interests.

These and other factors may have a material adverse effect on our international operations or on our business, results of operations, and financial condition. For example, we are faced with potential difficulties in staffing and managing local operations and we have to design local solutions to manage credit risks of local customers and distributors. Also, the cost and complexity of streamlining operations in certain European countries is greater than would be the case in the United States, due primarily to labor laws in those countries that can make reducing employment levels more time-consuming and expensive than in the United States. Our flexibility in our foreign operations can also be somewhat limited by agreements we have entered into with our foreign joint venture partners.

Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social, and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, and failure to do so could harm our business, results of operations, and financial condition.

Our sales outside the United States expose us to currency risks. During times of a strengthening U.S. dollar, at a constant level of business, our reported international sales and earnings will be reduced because the local currency will translate into fewer U.S. dollars. In addition to currency translation risks, we incur a currency transaction risk whenever one of our operating subsidiaries enters into either a purchase or a sales transaction using a different currency from the currency in which it receives revenues. Given the volatility of exchange rates, we may not be able to manage our currency transaction and/or translation risks effectively, or volatility in currency exchange rates may have a material adverse effect on our financial condition or results of operations.

Our lean manufacturing and other cost savings plans may not be effective.

Our operations strategy includes cutting costs by reducing product errors, inventory levels, operator motion, overproduction, and waiting while fostering the increased flow of material, information, and communication. The cost savings that we anticipate from these initiatives may not be achieved on schedule or at the level anticipated by management. If we are unable to realize these anticipated savings, our operating results and financial condition may be adversely affected. Moreover, the implementation of cost saving plans and facilities integration may disrupt our operations and performance.

We may incur material losses and costs as a result of product liability and warranty and recall claims that may be brought against us.

We may be exposed to product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. Accordingly, we could experience material warranty or product liability losses in the future and incur significant costs to defend these claims.

In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or the alleged defect relates to automotive safety. Our costs associated with providing product warranties could be material. Product liability, warranty, and recall costs may have a material adverse effect on our business, results of operations, and financial condition.

Work stoppages or similar difficulties could disrupt our operations.

As of December 31, 2008, approximately 46% of our employees were represented by unions, and approximately 10% of our employees were union represented employees located in the United States. It is possible that our workforce will become more unionized in the future. A work stoppage at one or more of our plants may have a material adverse effect on our business. Collective bargaining agreements at six of our North American facilities are due to expire in 2009, and we will be engaged in negotiations with unions at these facilities with respect to new contracts. Unionization activities could also increase our costs, which

could have an adverse effect on our profitability. We may be subject to work stoppages and may be, affected by other labor disputes. Additionally, a work stoppage at one or more of our customers or our customers’ suppliers could adversely affect our operations if an alternative source of supply were not readily available. Stoppages by employees of our customers also could result in reduced demand for our products and have material adverse effect on our business.

Our success depends in part on our development of improved products, and our efforts may fail to meet the needs of customers on a timely or cost-effective basis.

Our continued success depends on our ability to maintain advanced technological capabilities, machinery, and knowledge necessary to adapt to changing market demands as well as to develop and commercialize innovative products. We may not be able to develop new products as successfully as in the past or be able to keep pace with technological developments by our competitors and the industry generally. In addition, we may develop specific technologies and capabilities in anticipation of customers’ demands for new innovations and technologies. If such demand does not materialize, we may be unable to recover the costs incurred in such programs. If we are unable to recover these costs or if any such programs do not progress as expected, our business, financial condition, or results of operations could be materially adversely affected.

Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.

Our ability to operate our business and implement our strategies depends, in part, on the efforts of our key employees. The severe down turn in the auto industry may add additional pressure to our ability to retain key employees. In addition, our future success will depend on, among other factors, our ability to attract and retain other qualified personnel. The loss of the services of any of our key employees or the failure to attract or retain other qualified personnel could have a material adverse effect on our business or business prospects.

Our Sponsors may have conflicts of interest with us in the future.

Our Sponsors beneficially own approximately 98.6% of the outstanding shares of our common stock. Additionally, we have entered into a stockholders’ agreement with the Sponsors that grants them certain preemptive rights to purchase additional equity and rights to designate members of our Board of Directors. As a result, our Sponsors have control over our decisions to enter into any corporate transaction and have the ability to prevent any transaction that requires the approval of stockholders regardless of whether or not other stockholders or noteholders believe that any such transactions are in their own best interests.

Additionally, our Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Our Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as our Sponsors continue to own a significant amount of the outstanding shares of our common stock, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control our decisions.

Our intellectual property portfolio is subject to legal challenges.

We have developed and actively pursue developing proprietary technology in the automotive industry and rely on intellectual property laws and a number of patents in many jurisdictions to protect such technology. However, we may be unable to prevent third parties from using our intellectual property without authorization. If we had to litigate to protect these rights, any proceedings could be costly, and we may not prevail. We also face increasing exposure to the claims of others for infringement of intellectual property rights. We may have material intellectual property claims asserted against us in the future and could incur significant costs or losses related to such claims.

Our pension plans are currently underfunded and we may have to make cash payments to the plans, reducing the cash available for our business.

We sponsor various pension plans worldwide that are underfunded and will require cash payments. Additionally, if the performance of the assets in our pension plans does not meet our expectations, or if other actuarial assumptions are modified, our required contributions may be higher than we expect. If our cash flow from operations is insufficient to fund our worldwide pension liability, we may be forced to reduce or delay capital expenditures, seek additional capital, or seek to restructure or refinance our indebtedness.

As of December 31, 2008, our $251.8 million projected benefit obligation (“PBO”) for U.S. pension benefit obligations exceeded the fair value of the relevant plans’ assets, which totaled $162.6 million, by $89.2 million. Additionally, the international employees’ plans’ PBO exceeded plan assets by approximately $72.4 million at December 31, 2008. The PBO for other postretirement benefits (“OPEB”) was $68.5 million at December 31, 2008. Our estimated funding requirement for pensions and OPEB during 2009 is approximately $19.4 million. Net periodic pension costs for U.S. and international plans, including pension benefits and OPEB, were $19.1 million and $18.9 million for the years ended December 31, 2007 and 2008, respectively. See “Item 8. Financial Statements and Supplementary Data” (especially Notes 9 and 10).

We are subject to a broad range of environmental, health, and safety laws and regulations, which could adversely affect our business and results of operations.

We are subject to a broad range of federal, state, and local environmental and occupational safety and health laws and regulations in the United States and other countries, including those governing emissions to air, discharges to water, noise and odor emissions; the generation, handling, storage, transportation, treatment, and disposal of waste materials; the cleanup of contaminated properties; and human health and safety. We may incur substantial costs associated with hazardous substance contamination or exposure, including cleanup costs, fines, and civil or criminal sanctions, third party property or natural resource damage, or personal injury claims, or costs to upgrade or replace existing equipment, as a result of violations of or liabilities under environmental laws or non-compliance with environmental permits required at our locations. In addition, many of our current and former facilities are located on properties with long histories of industrial or commercial operations and some of these properties have been subject to certain environmental investigations and remediation activities. Because some environmental laws (such2000, ultimately serving as the Comprehensive Environmental Response, CompensationDirector of Accounting. Ms. Yantz is a certified public accountant and Liability Act) can impose liability for the entire cost of cleanup upon any of the current or former owners or operators, retroactively and regardless of fault, we could become liable for investigating or remediating contamination at these or other properties (including offsite locations). We may not always be in complete compliance with all applicable requirements of environmental law or regulation, and we may incur material costs or liabilities in connection with such requirements. In addition, new environmental requirements or changes to existing requirements, or in their enforcement, could havehas a material adverse effect on our business, results of operations, and financial condition. We have made and will continue to make expenditures to comply with environmental requirements. While our costs to defend and settle claims arising under environmental laws in the past have not been material, such costs may be material in the future. For more information about our environmental compliance and potential environmental liabilities, see “Item 1. Business – Environmental.”

If our acquisition strategy is not successful, we may not achieve our growth and profit objectives.BS from Arizona State University.

We may selectively pursue complementary acquisitions in the future as part of our growth strategy. While we will evaluate business opportunities on a regular basis, we may not be successful in identifying any attractive acquisitions. We may not have, or be able to raise on acceptable terms, sufficient financial resources to make acquisitions. In addition, any acquisitions we make will be subject to all of the risks inherent in an acquisition strategy, including integrating financial and operational reporting systems; establishing satisfactory budgetary and other financial controls; funding increased capital needs and overhead expenses; obtaining management personnel required for expanded operations; and funding cash flow shortages that may occur if anticipated sales and revenues are not realized or are delayed, whether by general economic or market conditions or unforeseen internal difficulties.

Our amount of leverage creates significant risk.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, seek additional capital, or seek to restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and resources, we could face substantial liquidity problems and might be required to sell material assets or operations to attempt to meet our debt service and other obligations. The Senior Credit Facilities and the indentures under which the Senior Notes and the Senior Subordinated Notes were issued restrict our ability to use the proceeds from asset sales. We may not be able to consummate those asset sales to raise capital or sell assets at prices that we believe are fair and proceeds that we do receive may not be adequate to meet any debt service obligations then due.

Despite our current leverage, we may still be able to incur substantially more debt, which could further exacerbate the risks that we and our subsidiaries face.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Our revolving credit facilities provide commitments of up to $115.0 million, of which $30.1 million was available for future borrowings as of December 31, 2008. During the first quarter of 2009, we have drawn substantially all of the revolving credit facilities balance that was available as of December 31, 2008.

Available Information

The Company makesWe make available free of charge on or through itsour Internet website its annual report(http://www.cooperstandard.com) our 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 amended, (the “Exchange Act”), as soon as reasonably practicable after itwe electronically filesfile such material with, or furnishesfurnish it to, the U.S. Securities and Exchange Commission (“SEC”).

Executive Officers

Set forth below is certain information with respect to the current executive officers of the Company.

Name

Age

Position

James S. McElya

63Chairman, Director and Chief Executive Officer

Edward A. Hasler(1)

61President

Allen J. Campbell

53Executive Vice President and Chief Financial Officer

Keith D. Stephenson

50Chief Operating Officer

Michael C. Verwilst

57Vice President, Mergers & Acquisitions

Timothy W. Hefferon

57Vice President, General Counsel and Secretary

Kimberly Dickens

49Vice President, Human Resources

Helen T. Yantz

50Vice President and Corporate Controller

(1)On December 9, 2010, Mr. Hasler notified the Company that he would be retiring from his position as President of the Company effective July 1, 2011.

James S. McElya is the Chairman of our board of directors and our Chief Executive Officer, a position he has held since March 2009 and previously held from September 2006 to July 2008. He served as executive Chairman from July 2008 to March 2009. Mr. McElya served as President and Chief Executive Officer from the date of the 2004 Acquisition to September 2006. He has been a member of our board of directors since the 2004 Acquisition. He was President, Cooper-Standard Automotive and a corporate Vice President of Cooper Tire & Rubber Company from June 2000 until the 2004 Acquisition. Mr. McElya has over 33 years of automotive experience. He was previously President of Siebe Automotive Worldwide, a division of Invensys, PLC and spent 22 years with Handy & Harman in various executive management positions, including President, Handy & Harman Automotive, and Corporate Vice President of the parent company. Mr. McElya is the past Chairman and current member of the board of directors of the Motor & Equipment Manufacturers Association. He is a past Chairman and current member of the board of directors of the Original Equipment Supplier Association, and he is an advisor to the board of directors of the National Alliance for Accessible Golf. Mr. McElya is a member of the board of directors of Affinia Group.

Edward A. Hasler is our President, a position he has held since May 2010. Mr. Hasler served as President and Chief Executive Officer from July 2008 to March 2009 and as Vice Chairman and President, North America from March 2009 until May 2010. He served as President and Chief Operating Officer from September 2006 to July 2008. Mr. Hasler was President, Global Sealing Systems from the date of the 2004 Acquisition to September 2006. He was the President of the Global Sealing Systems Division and a corporate Vice President of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition. Mr. Hasler was employed from 2000 to 2001 in Germany as Managing Director,

Europe for GDX Corporation. Prior to joining GDX, Mr. Hasler had been with Cooper Tire for nearly 15 years. At Cooper Tire, Mr. Hasler held several senior posts including Vice President, Operations; and Vice President, Controller. He has both an MBA and a BS in Business Administration.

Allen J. Campbell is our Executive Vice President and Chief Financial Officer, a position he has held since March 17, 2011 previously serving as the Vice President and Chief Financial Officer since the 2004 Acquisition. He was Vice President, Asian Operations of the Cooper-Standard Automotive division of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition and served as Vice President, Finance of the division from 1999 to 2003. Prior to joining Cooper Tire, Mr. Campbell was with The Dow Chemical Company for 18 years and held executive finance positions for both U.S. and Canadian operations. Mr. Campbell is a certified public accountant and received his MBA in Finance from Xavier University.

Keith D. Stephenson is our Chief Operating Officer, a position he has held since December 2010. He served as President, International from March 2009 to December 2010. He served as President, Global Body & Chassis Systems from June 2007 to March 2009. Mr. Stephenson was Chief Development Officer at Boler Company from January 2004 until October 2006. From 1985 to January 2004, he held various senior positions at Hendrickson, a division of Boler Company, including President of International Operations, Senior Vice President of Global Business Operations and President of the Truck Systems Group.

Michael C. Verwilst is our Vice President, Mergers & Acquisitions, a position he has held since March 2009. Previously, Mr. Verwilst served as President, Global Fluid Systems from June 2007 to March 2009. Mr. Verwilst joined the Company in 2003 as the Vice President, Strategic Planning and Business Development. Prior to joining the Company, Mr. Verwilst was a principal with Corporate Improvement Partners from 2001 to 2003. Mr. Verwilst held many executive positions with Federal-Mogul Corporation from 1978 to 2001, including Senior Vice President of Powertrain Systems and Vice President & General Manager of Powertrain Systems—Americas.

Timothy W. Hefferon is our Vice President, General Counsel and Secretary, a position he has held since the 2004 Acquisition. Prior to joining the Company, Mr. Hefferon was with ThyssenKrupp USA Inc. from 1999 to 2004, where he served as Deputy General Counsel and with Federal-Mogul Corporation from 1994 to 1999, where he served as Associate General Counsel. He was a partner from 1985 to 1994 of Hill Lewis, a Detroit-based law firm, where he served on the executive committee. Mr. Hefferon received his law degree from the University of Michigan Law School.

Kimberly Dickens is our Vice President, Human Resources, a position she has held since March of 2008. Prior to joining the Company, Ms. Dickens served as Vice President, Human Resources at Federal Signal Corporation from 2004 to 2008. Previously, Ms. Dickens held numerous plant and divisional human resource positions at Borg Warner Corporation beginning in 1988, ultimately serving as Vice President, Human Resources from 2002 to 2004. Ms. Dickens has a BS in Industrial Health and Safety from Oakland University and an MBA from Lewis University.

Helen T. Yantz is our Vice President and Corporate Controller, a position she has held since January 2005. Previously, Ms. Yantz held the position of Director of Accounting and Assistant Vice President from 2001 to 2005. Prior to joining the Company, Ms. Yantz was Manager of Financial Reporting at Trinity Health Systems from 2000 to 2001. Previously, Ms. Yantz held various positions in finance at CMS Generations Co., a subsidiary of CMS Energy, from 1990 to 2000, ultimately serving as the Director of Accounting. Ms. Yantz is a certified public accountant and has a BS from Arizona State University.

Forward-Looking Statements

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created

thereby. We make forward-looking statements in this Annual Report on Form 10-K and may make such statements in future filings with the SEC. We may also make forward-looking statements in our press releases or other public or stockholder communications. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends, and other information that is not historical information and, in particular, appear under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and “Business.” When used in this report, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, no assurances can be made that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this Annual Report on Form 10-K. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report are set forth in this Annual Report on Form 10-K, including under Item 1A. “Risk Factors.” Such risks and uncertainties and other important factors include, but are not limited to:

cyclicality of the automotive industry and the possibility of further material contractions in automotive sales and production;

our ability to generate sufficient cash to service our indebtedness and meet dividend obligations on our 7% preferred stock;

viability of our supply base;

escalating pricing pressures;

our ability to meet a significant increase in demand;

our ability to compete in the highly competitive automotive parts industry;

our significant non-U.S. operations;

our dependence on certain major customers;

labor conditions;

our ability to meet our customers’ needs for new and improved products in a timely manner;

our legal rights to our intellectual property portfolio;

our underfunded pension plans;

environmental and other regulation;

the possibility that our acquisition strategy will not be successful;

the lack of comparability of our financial condition and results of operations following our emergence from bankruptcy to those reflected in our historical financial statements;

availability and increasing volatility in cost of raw materials;

the possibility of future impairment charges to our goodwill and long-lived assets; and

uncertainty as to the effect of our emergence from bankruptcy on our operations going forward.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Annual Report on Form 10-K and other reports we file with the SEC, and are expressly qualified in their entirety by the cautionary statements included herein and therein. We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

Item 1A.Risk Factors

Our business and financial condition can be impacted by a number of factors, including the risks described below and elsewhere in this Annual Report on Form 10-K. Any of these risks could cause our actual results to vary materially from recent or anticipated results and could materially and adversely affect our business, results of operations and financial condition.

We are highly dependent on the automotive industry. A prolonged or further material contraction in automotive sales and production volumes could materially adversely affect our liquidity, the viability of our supply base and the financial conditions of our customers and could have a material adverse affect on our business, results of operations and financial condition.

The great majority of our customers are OEMs and their suppliers. In 2009, the automotive industry was severely affected by the turmoil in the global credit markets and the economic recession. These conditions had a dramatic impact on consumer vehicle demand in 2009. During 2009, North American light vehicle industry production declined by approximately 32% from 2008 levels to 8.6 million units. European light vehicle industry production declined by approximately 20% from 2008 levels to 16.3 million units.

Automotive sales and production are highly cyclical and depend, among other things, on general economic conditions and consumer spending and preferences (which can be affected by a number of issues, including fuel costs, employment levels and the availability of consumer financing). As the volume of automotive production fluctuates, the demand for our products also fluctuates. Declines in automotive sales and production in the second half of 2008 and into 2009 lead to our focused efforts, which are ongoing, to restructure our business and take other actions in order to reduce costs. There is no assurance that our actions to date will be sustainable over the long term or will be sufficient if there is further or future decline. In addition, if lower levels of sales and production are forecasted, non-cash impairment charges could result as the value of certain long-lived assets is reduced. As a result, our financial condition and results of operations could be materially adversely affected by further or future declines in vehicle production. Production levels in Europe and North America, most notably, affect us given our concentration of sales in those regions, which accounted for 34% and 52%, respectively, of our 2010 sales.

Our supply base has also been adversely affected by the current industry environment. Lower global automotive production, turmoil in the credit markets and extreme volatility over the past several years in raw material, energy and commodity costs have resulted in financial distress within our supply base and an increase in the risk of supply disruption. In addition, several automotive suppliers have filed for bankruptcy protection or have ceased operations. While we have developed and implemented strategies to mitigate these factors, these strategies have offset only a portion of the adverse impact. The continuation or worsening of these industry conditions could adversely affect our financial condition, operating results and cash flows, thereby making it more difficult for us to make payments under our indebtedness and our 7% preferred stock.

In addition, if our suppliers were to reduce normal trade credit terms, our liquidity could be adversely impacted. Likewise, our liquidity could be adversely impacted if our customers were to extend their normal payment terms, whether or not permitted under our contracts. If either of these situations occurs, we may need to rely on other sources of funding to bridge the additional gap between the time we pay our suppliers and the time we receive corresponding payments from our customers.

As a result of the above factors, further or future material contraction in automotive sales and production could have a material adverse effect on our results of operations and liquidity. In addition, our suppliers would also be subject to many of the same consequences, which could adversely impact their results of operations and liquidity. If a supplier’s viability was to become impaired, it could impact the supplier’s ability to perform as we expect and consequently our ability to meet our own commitments.

The financial conditions of our customers, particularly the Detroit 3, may adversely affect our results of operations and financial condition.

Significantly lower global production levels, tightened liquidity and increased costs of capital have combined to cause severe financial distress among many of our customers and have forced those companies to implement various forms of restructuring actions. In some cases, these actions have involved significant capacity reductions, the discontinuation of entire vehicle brands or even reorganization under bankruptcy laws. Discontinuation of a brand can result in not only a loss of sales associated with any systems or components we supplied but also customer disputes regarding capital we expended to support production of such systems or components for the discontinued brand, and such disputes could potentially be resolved adversely to us.

In North America, Chrysler, Ford and GM have been engaged in unprecedented restructuring, which included, in the case of Chrysler and GM, reorganization under bankruptcy laws and subsequent asset sales. While portions of Chrysler and GM have successfully emerged from bankruptcy proceedings in the United States, it is still uncertain what portion of their respective sales will return and whether they can be viable at a lower level of sales.

Our capital structure includes a substantial amount of indebtedness and preferred stock, which impose demands on our liquidity that could have a material adverse effect on our financial condition or on our ability to obtain financing in the future.

We have a substantial amount of debt outstanding, including our Senior Notes and the debt of certain foreign subsidiaries aggregating approximately $476.7 million that requires significant principal and interest payments, and preferred stock outstanding that may require significant preferred dividend payments. We are permitted by the terms of the Senior Notes and ABL facility to incur substantial additional indebtedness, subject to the restrictions therein, which could:

make it more difficult for us to satisfy our obligations under the Senior Notes, the ABL facility and preferred stock;

increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, since a portion of our borrowings are at variable rates of interest;

require us to dedicate a substantial portion of our cash flow from operations to principal and interest payments on our debt and, if we so elect, cash dividend payments on our preferred stock, which would reduce the availability of our cash flow from operations to service additional debt or to fund working capital, capital expenditures or other general corporate purposes; and;

increase our cost of borrowing.

We may not be able to generate sufficient cash to service all of our indebtedness and to meet any dividend obligations of our preferred stock.

Our ability to make scheduled payments on our debt and meet the potential cash dividend obligations of our preferred stock or to refinance these obligations depends on our financial condition and operating performance. If our cash flows and capital resources are insufficient to fund our debt service obligations and any cash dividend obligations on our preferred stock, we may be forced to reduce or delay investments and capital expenditures, sell material assets, seek additional capital or restructure or refinance our indebtedness or the preferred stock, which could have a material adverse effect on our business, financial condition and results of operations.

We could be adversely affected by any shortage of supplies.

In the event of a rapid increase in production demands, either we or our customers or other suppliers may experience supply shortages of raw materials or components. This could be caused by a number of factors, including a lack of production line capacity or manpower or working capital constraints. In order to manage and reduce the cost of purchased goods and services, we and others within our industry have been rationalizing and consolidating our supply base. In addition, due to the turbulence in the automotive industry, several suppliers have initiated bankruptcy proceedings or ceased operations. As a result, there is greater dependence on fewer sources of supply for certain components and materials, which could increase the possibility of a supply shortage of any particular component. If any of our customers experience a material supply shortage, either directly or as a result of a supply shortage at another supplier, that customer may halt or limit the purchase of our products. Similarly, if we or one of our own suppliers experience a supply shortage, we may become unable to produce the affected products if we cannot procure the components from another source. Such production interruptions could impede a ramp-up in vehicle production and could have a material adverse effect on our business, results of operations and financial condition.

Escalating pricing pressures from our customers may adversely affect our business.

Pricing pressure in the automotive supply industry has been substantial and is likely to continue. Virtually all vehicle manufacturers seek price reductions in both the initial bidding process and during the term of the contract. Price reductions have impacted our sales and profit margins and are expected to do so in the future. If we are not able to offset continued price reductions through improved operating efficiencies and reduced expenditures, those price reductions may have a material adverse effect on our results of operations.

We may be at risk of not being able to meet significant increases in demand.

If demand increases significantly from what has been a historical low for production over the last two years, we may have difficulty meeting such demand, particularly if such increases in demand occurs rapidly. This difficulty may include not having sufficient manpower or relying on suppliers who may not be able to respond quickly to a changed environment when demand significantly increases. Our inability to meet significant increases in demand could require us to delay delivery dates and could result in customers cancelling their orders, requesting discounts or ceasing to do business with us. In addition, as demand and volumes increase, we will need to purchase more inventory, which will increase our working capital needs. If our working capital needs exceed our cash flows from operations, we will be required to use our cash balances and available borrowings, as well as potential sources of additional capital, which may not be available on satisfactory terms and in adequate amounts, if at all, to satisfy those needs.

Increasing costs for, or reduced availability of, manufactured components and raw materials may adversely affect our profitability.

The principal raw materials we purchase include fabricated metal-based components, synthetic rubber, carbon black, natural rubber, process oil and plastic components. Raw materials comprise the largest component of our costs, representing approximately 49% of our total costs in 2010. A significant increase in the price of these items could materially increase our operating costs and materially and adversely affect our profit margins because it is generally difficult to pass through these increased costs to our customers. Raw material costs remain volatile and could have an adverse impact on our profitability in the foreseeable future.

Because we purchase various types of raw materials and manufactured components, we may be materially and adversely affected by the failure of our suppliers of those materials to perform as expected. This non-performance may consist of delivery delays or failures caused by production issues or delivery of non-conforming products. The risk of non-performance may also result from the insolvency or bankruptcy of one or more of our suppliers. Our suppliers’ ability to supply products to us is also subject to a number of risks to

such suppliers, including availability of raw materials, such as steel and natural rubber, destruction of their facilities or work stoppages. In addition, our failure to promptly pay, or order sufficient quantities of inventory from our suppliers may increase the cost of products we purchase or may lead to suppliers refusing to sell products to us at all. Our efforts to protect against and to minimize these risks may not always be effective.

We consider the production capacities and financial condition of suppliers in our selection process and expect that they will meet our delivery requirements. However, there can be no assurance that strong demand, capacity limitations, shortages of raw materials or other problems will not result in any shortages or delays in the supply of components to us.

We could be materially adversely affected if we are unable to continue to compete successfully in the highly competitive automotive parts industry.

The automotive parts industry is highly competitive. We face numerous competitors in each of the product lines we serve. In general, there are three or more significant competitors and numerous smaller competitors for most of the products we offer. We also face increased competition for certain of our products from suppliers producing in lower-cost countries such as Korea and China, especially for certain lower-technology noise, vibration and harshness control products that have physical characteristics that make long-distance shipping more feasible and economical. We may not be able to continue to compete favorably, and increased competition in our markets may have a material adverse effect on our business.

We are subject to other risks associated with our non-U.S. operations.

We have significant manufacturing operations outside the United States, including joint ventures and other alliances. Our operations are located in 18 countries, and we export to several other countries. In 2010, approximately 73% of our sales were attributable to products manufactured outside the United States. Risks are inherent in international operations, including:

exchange controls and currency restrictions;

currency fluctuations and devaluations;

changes in local economic conditions;

repatriation restrictions (including the imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries);

hyperinflation in certain foreign countries;

changes in laws and regulations, including the imposition of embargos;

exposure to possible expropriation or other government actions; and

exposure to local political or social unrest including resultant acts of war, terrorism or similar events.

These and other factors may have a material adverse effect on our international operations or on our business, results of operations and financial condition. For example, we are faced with potential difficulties in staffing and managing local operations and we have to design local solutions to manage credit risks of local customers and distributors. Also, the cost and complexity of streamlining operations in certain European countries is greater than would be the case in the United States, due primarily to labor laws in those countries that can make reducing employment levels more time-consuming and expensive than in the United States. Our flexibility in our foreign operations can also be somewhat limited by agreements we have entered into with our foreign joint venture partners.

Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social and political conditions. We may not continue to succeed in developing and implementing policies and strategies that are effective in each location where we do business, and failure to do so could harm our business, results of operations and financial condition.

Our sales outside the United States expose us to currency risks. During times of a strengthening U.S. dollar, at a constant level of business, our reported international sales and earnings will be reduced because the local currency will translate into fewer U.S. dollars. In addition to currency translation risks, we incur a currency transaction risk whenever one of our operating subsidiaries enters into either a purchase or a sales transaction using a different currency from the currency in which it receives revenues. Given the volatility of exchange rates, we may not be able to manage our currency transaction and translation risks effectively, or volatility in currency exchange rates may have a material adverse effect on our financial condition or results of operations.

We conduct significant operations in Mexico, which could be materially and adversely affected as a result of the increased levels of violence and political disruption.

Recently, drug related violence has risen to unprecedented levels along the U.S.-Mexico border despite increased law-enforcement efforts by the Mexican and the U.S. governments. This situation presents several risks to our operations in Mexico, including, among others, that our employees may be directly affected by the violence, that our employees may elect to relocate out of the region in order to avoid the risk of violent crime to themselves or their families and that our customers may become increasingly reluctant to visit our Mexican facilities, which could delay new business opportunities and other important aspects of our business. If any of these risks materializes, our business may be materially and adversely affected.

Our lean manufacturing and other cost savings plans may not be effective.

Our operations strategy includes cutting costs by reducing production errors, inventory levels, operator motion, overproduction and waiting while fostering the increased flow of material, information and communication. The cost savings that we anticipate from these initiatives may not be achieved on schedule or at the level anticipated by management. If we are unable to realize these anticipated savings, our operating results and financial condition may be materially adversely affected. Moreover, the implementation of cost saving plans and facilities integration may disrupt our operations and performance.

Our business could be materially adversely affected if we lost any of our largest customers.

While we provide parts to virtually every major global OEM for use on a multitude of different platforms, sales to our three largest customers, Ford, GM and Fiat, on a worldwide basis represented approximately 51% of our sales. Although business with each customer is typically split among numerous contracts, if we lost a major customer or that customer significantly reduced its purchases of our products whether as a result of a decline in such customer’s market share due to increased competition from Asian or other OEMs’ successful vertical integration at the customer level, or otherwise, there could be a material adverse affect on our business, results of operations and financial condition.

We may incur material losses and costs as a result of product liability and warranty and recall claims that may be brought against us.

We may be exposed to product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. Accordingly, we could experience material warranty or product liability losses in the future and incur significant costs to defend against these claims. In addition, if any of our products are, or are alleged to be, defective, we may be required to participate in a recall of that product if the defect or the alleged defect relates to automotive safety. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, customers are increasingly seeking to change contract terms and conditions concerning warranty and recall participation. Also, while we possess considerable historical warranty and recall data with respect to the products we currently produce, we do not have such data relating to new products, assembly programs or technologies, including any new fuel and emissions technology and systems being brought into production to allow us to accurately estimate future warranty or recall costs. In addition, the

increased focus on systems integration platforms utilizing fuel and emissions technology with more sophisticated components from multiple sources could result in an increased risk of component warranty costs over which we have little or no control and for which we may be subject to an increasing share of liability to the extent any of the other component suppliers are in financial distress or are otherwise incapable of fulfilling their warranty or product recall obligations. Our costs associated with providing product warranties and responding to product recall claims could be material and we do not have insurance covering product recalls. Product liability, warranty and recall costs may have a material adverse effect on our business, results of operations and financial condition.

Work stoppages or similar difficulties could disrupt our operations.

We may be subject to work stoppages and may be affected by other labor disputes. A number of our collective bargaining agreements expire in any given year including several in 2011. There is no certainty that we will be successful in negotiating new agreements with these unions that extend beyond the current expiration dates, or that these new agreements will be on terms as favorable to us as past labor agreements. Failure to renew these agreements when they expire or to establish new collective bargaining agreements on terms acceptable to us and the unions could result in work stoppages or other labor disruptions which may have a material adverse effect on customer relationships and our business and results of operations. Additionally, a work stoppage at one or more of our suppliers, our customers or our customers’ suppliers could materially adversely affect our operations if an alternative source of supply were not readily available. Work stoppages by employees of our customers also could result in reduced demand for our products and could have a material adverse effect on our business. As of December 31, 2010, approximately 31% of our employees were represented by unions, approximately 14% of which were located in the United States. It is possible that our workforce will become more unionized in the future. A work stoppage at one or more of our plants may have a material adverse effect on our business. Unionization activities could also increase our costs, which could have a material adverse effect on our profitability.

Our success depends in part on our development of improved products, and our efforts may fail to meet the needs of customers on a timely or cost-effective basis.

Our continued success depends on our ability to maintain advanced technological capabilities, machinery and knowledge necessary to adapt to changing market demands as well as to develop and commercialize innovative products. We may be unable to develop new products as successfully as in the past or to keep pace with technological developments by our competitors and the industry generally. In addition, we may develop specific technologies and capabilities in anticipation of customers’ demands for new innovations and technologies. If such demand does not materialize, we may be unable to recover the costs incurred in such programs. If we are unable to recover these costs or if any such programs do not progress as expected, our business, financial condition and results of operations could be materially adversely affected.

Our intellectual property portfolio is subject to legal challenges and considerable uncertainty.

We have developed and actively pursue the development of proprietary technology in the automotive industry and rely on intellectual property laws and a number of patents in many jurisdictions to protect such technology. There can be no assurances that the protections we have available for our proprietary technology in the United States and other countries will be available to us in many places we sell our products. Therefore, we may be unable to prevent third parties from using our intellectual property without authorization. If we had to litigate to protect these rights, any proceedings could be costly, and we may not prevail. We also face increasing exposure to the claims of others for infringement of intellectual property rights. We may have material intellectual property claims asserted against us in the future and could incur significant costs or losses related to such claims. In addition, any infringement or misappropriation of our technology that we cannot control could have a material negative impact on our business and results of operations. These claims, regardless of their merit or resolution, are frequently costly to prosecute, defend or settle and divert the efforts and attention of our management and employees. Claims of this sort also could harm our relationships with our customers and might

deter future customers from doing business with us If any such claim were to result in an adverse outcome, we could be required to take actions which may include: cease the manufacture, use or sale of the infringing products; pay substantial damages to third parties, including to customers to compensate them for their discontinued use or replace infringing technology with non-infringing technology; or expend significant resources to develop or license non-infringing products.

Our pension plans are currently underfunded and we may have to make cash payments to the plans, reducing the cash available for our business.

We sponsor various pension plans worldwide that are underfunded and will require cash payments. Additionally, if the performance of the assets in our pension plans does not meet our expectations, or if other actuarial assumptions are modified, our required contributions may be higher than we expect. If our cash flow from operations is insufficient to fund our worldwide pension liability, we may be forced to reduce or delay capital expenditures, seek additional capital or seek to restructure or refinance our indebtedness or sell assets.

As of December 31, 2010, our $286.1 million projected benefit obligation, or PBO, for U.S. pension benefit obligations exceeded the fair value of the relevant plans’ assets, which totaled $196.0 million, by $90.1 million. Additionally, the international employees’ plans’ PBO exceeded plan assets by approximately $76.0 million as of December 31, 2010. The PBO for other postretirement benefits, or OPEB, was $75.0 million as of December 31, 2010. Our estimated funding requirement for pensions and OPEB during 2011 is approximately $35.2 million. Net periodic benefit costs for U.S. and international plans, including pension benefits and OPEB, were $14.4 million, $6.1 million and $5.2 million for the year ended December 31, 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively. For more information, see notes 9 and 10 to the audited consolidated financial statements.

Significant changes in discount rates, the actual return on pension assets and other factors could adversely affect our liquidity, financial condition and results of operations.

Our earnings may be positively or negatively impacted by the amount of income or expense recorded related to our qualified pension plans. Accounting principles generally accepted in the United States (“GAAP”) require that income or expense related to the pension plans be calculated at the annual measurement date using actuarial calculations, which reflect certain assumptions. The most significant of these assumptions relate to interest rates, the capital markets and other economic conditions. Changes in key economic indicators can change these assumptions. These assumptions, as well as the actual value of pension assets at the measurement date, will impact the calculation of pension expense for the year. Although GAAP expense and pension contributions are not directly related, the key economic indicators that affect GAAP expense also affect the amount of cash that we will contribute to our pension plans. Because the values of these pension assets have fluctuated and will continue to fluctuate in response to changing market conditions, the amount of gains or losses that will be recognized in subsequent periods, the impact on the funded status of the pension plans and the future minimum required contributions, if any, could adversely affect our liquidity, financial condition and results of operations.

We are subject to a broad range of environmental, health and safety laws and regulations, which could adversely affect our business and results of operations.

We are subject to a broad range of federal, state and local environmental and occupational safety and health laws and regulations in the United States and other countries, including those governing: emissions to air; discharges to water; noise and odor emissions; the generation, handling, storage, transportation, treatment and disposal of waste materials; the cleanup of contaminated properties; and human health and safety. We may incur substantial costs associated with hazardous substance contamination or exposure, including cleanup costs, fines and civil or criminal sanctions, third party property or natural resource damage, personal injury claims or costs to upgrade or replace existing equipment as a result of violations of or liabilities under environmental laws or the failure to maintain or comply with environmental permits required at our locations. In addition, many of our

current and former facilities are located on properties with long histories of industrial or commercial operations and some of these properties have been subject to certain environmental investigations and remediation activities. We maintain environmental reserves for certain of these sites, which we believe are adequate. Because some environmental laws (such as the Comprehensive Environmental Response, Compensation and Liability Act and analogous state laws) can impose liability retroactively and regardless of fault on potentially responsible parties for the entire cost of cleanup at currently or formerly owned and operated facilities, as well as sites at which such parties disposed or arranged for disposal of hazardous waste, we could become liable for investigating or remediating contamination at our current or former properties or other properties (including offsite waste disposal locations). We may not always be in complete compliance with all applicable requirements of environmental law or regulation, and we may receive notices of violation or become subject to enforcement actions or incur material costs or liabilities in connection with such requirements. In addition, new environmental requirements or changes to interpretations of existing requirements, or in their enforcement, could have a material adverse effect on our business, results of operations and financial condition. For example, while we are not large emitters of greenhouse gases, laws, regulations and certain regional initiatives under consideration by the U.S. Congress, the U.S. Environmental Protection Agency and various states, and in effect in certain foreign jurisdictions, could result in increased operating costs to control and monitor such emissions. We have made and will continue to make expenditures to comply with environmental requirements. While our costs to defend and settle claims arising under environmental laws in the past have not been material, such costs may be material in the future.

If our acquisition strategy is not successful, we may not achieve our growth and profit objectives.

We may selectively pursue complementary acquisitions in the future as part of our growth strategy. While we will evaluate business opportunities on a regular basis, we may not be successful in identifying any attractive acquisitions. We may not have, or be able to raise on acceptable terms, sufficient financial resources to make acquisitions. Our ability to make investments may also be limited by the terms of our existing or future financing arrangements. In addition, any acquisitions we make will be subject to all of the risks inherent in an acquisition strategy, including integrating financial and operational reporting systems, establishing satisfactory budgetary and other financial controls, funding increased capital needs and overhead expenses, obtaining management personnel required for expanded operations and funding cash flow shortages that may occur if anticipated sales are not realized or are delayed, whether by general economic or market conditions or unforeseen internal difficulties.

Because of our adoption of “fresh-start” accounting and the effects of the transactions contemplated by our Plan of Reorganization, financial information subsequent to May 31, 2010 will not be comparable to financial information prior to May 31, 2010.

Upon our emergence from Chapter 11 bankruptcy proceedings, we adopted “fresh-start” accounting in accordance with the provisions of Accounting Standards Codification (“ASC”) 852, pursuant to which our reorganization value was allocated to our assets in conformity with the procedures specified by ASC 805, “Business Combinations.” The excess of reorganization value over the fair value of tangible and identifiable intangible assets was recorded as goodwill, which is subject to periodic evaluation for impairment. Liabilities, other than deferred taxes, were recorded at the present value of amounts expected to be paid. In addition, under “fresh-start” accounting, common stock, retained deficit and accumulated other comprehensive loss were eliminated. Our consolidated financial statements also reflect all of the transactions contemplated by our Plan of Reorganization. Accordingly, our consolidated financial statements subsequent to May 31, 2010, will not be comparable in many respects to our consolidated financial statements prior to May 31, 2010. The lack of comparable historical financial information may discourage investors from purchasing our capital stock.

Our emergence from bankruptcy reduced or eliminated our U.S. net operating losses and other tax attributes and limits our ability to offset future U.S. taxable income with tax losses and credits incurred prior to our emergence from bankruptcy.

The discharge of a debt obligation by a taxpayer in a bankruptcy proceeding for an amount less than its adjusted issue price (as defined for tax purposes) generally creates cancellation of indebtedness income (“ COD income”), that is excludable from a taxpayer’s taxable income. However certain tax attributes otherwise available and of value to a debtor will be reduced to the extent of the excludable COD income. Additionally, Internal Revenue Code Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. As a result of our emergence from bankruptcy we have had significant excludable COD income that will reduce or eliminate our U.S. net operating losses and other tax attributes and we have had an ownership change and a resulting limitation under Internal Revenue Code Sections 382 and 383.

Impairment charges relating to our goodwill and long-lived assets could adversely affect our results of operations.

We regularly monitor our goodwill and long-lived assets for impairment indicators. In conducting our goodwill impairment testing, we compare the fair value of each of our reporting units to the related net book value. In conducting our impairment analysis of long-lived assets, we compare the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. Changes in economic or operating conditions impacting our estimates and assumptions could result in the impairment of our goodwill or long-lived assets. In the event that we determine that our goodwill or long-lived assets are impaired, we may be required to record a significant charge to earnings, which could adversely affect our results of operations.

We cannot be certain that our emergence from bankruptcy will not adversely affect our operations going forward.

Although we emerged from bankruptcy on May 27, 2010, we cannot assure you that having been subject to bankruptcy protection will not adversely affect our operations going forward, including our ability to negotiate favorable terms from suppliers, hedging counterparties and others and to attract and retain customers. The failure to obtain such favorable terms and retain customers could materially adversely affect our financial performance.

Certain shareholders with nomination agreements nominated a majority of the board of directors and their interests in the Company may conflict with your interests.

In accordance with our Plan of Reorganization and the Equity Commitment Agreement, our board of directors is comprised of seven directors, one of whom is our chief executive officer and two who are independent directors from our pre-emergence board of directors selected by us. Each of Barclays Capital Inc., and the group of parties comprised of Capital Research and Management Company, Lord, Abbett & Co. LLC, TCW Asset Management Company and TD Asset Management Inc. nominated one non-management member of our board of directors in reasonable consultation with (but without the need for the approval of) our chief executive officer and an executive search firm, Korn/Ferry International, mutually acceptable to such parties and us. With respect to the non-management members nominated as described above, such nominations were made in consultation with the creditors’ committee appointed in the Chapter 11 cases, solely to determine whether such nominee had a prior relationship with any party that provided for the backstop of our rights offering conducted pursuant to the Plan of Reorganization (“Backstop Party”) that would reasonably be expected to influence the exercise of his or her business judgment. Oak Hill Advisors, L.P. nominated one member of our board of directors and Silver Point Capital, L.P. nominated one member. Barclays Capital Inc. was also an initial purchaser of the outstanding notes.

The Backstop Parties will have the right to nominate members to our board of directors until the earlier of (i) termination of the applicable Nomination Agreement (as defined below) at the election of the applicable

Backstop Party by written notice to us, (ii) immediately prior to the annual meeting of stockholders held during the calendar year 2013 and (iii) if the applicable Backstop Party together with its affiliates ceases to beneficially own at least 7.5% of our outstanding equity (on an as converted basis).

As long as the Backstop Parties (whether or not acting in a coordinated manner) and any other substantial stockholder own, directly or indirectly, a substantial portion of our outstanding shares, they will be able to exert significant influence over us, including:

the composition of our board of directors and, through it, any determination with respect to our business;

direction and policies, including the appointment and removal of officers;

the determination of incentive compensation, which may affect our ability to retain key employees;

any determinations with respect to mergers or other business combinations;

our acquisition or disposition of assets;

our financing decisions and our capital raising activities;

the payment of dividends;

conduct in regulatory and legal proceedings; and

amendments to our certificate of incorporation.

The concentration of ownership of our outstanding equity in the Backstop Parties may make some transactions more difficult or impossible without the support of the Backstop Parties or more likely with the support of the Backstop Parties. The interests of any of the Backstop Parties, any other substantial stockholder or any of their respective affiliates could conflict with or differ from our interests or the interests of holders of the Senior Notes. For example, the concentration of ownership held by the Backstop Parties could delay, defer or prevent a change of control of our company or impede a merger, takeover or other business combination which may otherwise be favorable for us. A Backstop Party, substantial stockholder or affiliate thereof may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.

The indenture governing the Senior Notes and the credit agreement governing our Senior ABL Facility impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The indenture governing the Senior Notes and the credit agreement governing our Senior ABL Facility impose significant operating and financial restrictions on us. These restrictions limit our ability, among other things, to:

incur additional indebtedness or issue certain disqualified stock and preferred stock;

pay dividends or certain other distributions on our capital stock or repurchase our capital stock;

make certain investments or other restricted payments;

place restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;

engage in transactions with affiliates;

sell certain assets or merge with or into other companies;

guarantee indebtedness; and

create liens.

There are limitations on our ability to incur the full $125.0 million of commitments under our Senior ABL Facility. Borrowings under our Senior ABL Facility are limited by a specified borrowing base consisting of a percentage of eligible accounts receivable and eligible inventory, less customary reserves imposed by the agent under our Senior ABL Facility. In addition, under our Senior ABL Facility, a monthly fixed charge maintenance covenant would become applicable if excess availability under our Senior ABL Facility is at any time less than a specified percentage (or amount) of the total revolving loan commitments. If the covenant trigger were to occur, Cooper-Standard Holdings Inc. would be required to satisfy and maintain, on a consolidated basis, on the last day of each month a fixed charge coverage ratio of at least 1.1 to 1.0. Our ability to meet the required fixed charge coverage ratio can be affected by events beyond our control, and we cannot assure that we will meet this ratio. A breach of any of these covenants could result in a default under our Senior ABL Facility.

Moreover, our Senior ABL Facility provides the lenders considerable discretion to impose reserves, which could materially reduce the amount of borrowings that would otherwise be available to us. There can be no assurance that the lenders under our Senior ABL Facility will not impose such reserves during the term of our Senior ABL Facility and further, were they to do so, the resulting impact of this action could materially and adversely impair our ability to make interest payments on the Senior Notes. Also, when (and for as long as) the availability under our Senior ABL Facility is less than a specified amount for a certain period of time, the agent under our Senior ABL Facility would exercise cash dominion.

As a result of these covenants and restrictions, we are limited in how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.

 

Item 1B.Unresolved Staff Comments.

Not applicable.

Item 2.Properties

As of December 31, 2008,2010, our operations were conducted through 7875 facilities in 18 countries, of which 6866 are manufacturing facilities and tennine are used for multiple purposes.purposes, including design, engineering and administration. Our corporate headquarters is located in Novi, Michigan. Our manufacturing facilities are located in North America, Europe, Asia, South America and Australia. We believe that substantially all of our properties are in good condition and that we have sufficient capacity to meet our current and projected manufacturing and design needs. The following table summarizes our key property holdings:holdings by geographic region:

 

Region

  

Division

  

Total Facilities

  

Owned Facilities

  

Type

  Total
Facilities
   Owned
Facilities
 

North America

  Body & Chassis  12  12  

Manufacturing(a)

Other(b)

   

 

29

3

  

  

   

 

23

—  

  

  

  Fluid  16  12
  Other**  5  —  

Asia

  Asia Pacific*  15  7  

Manufacturing

Other(b)

   

 

15

2

  

  

   

 

7

—  

  

  

  Other  3  —  

Europe

  Body & Chassis  13  10  

Manufacturing

Other(b)

   

 

19

3

  

  

   

 

15

—  

  

  

  Fluid  7  6
  Other  3  1

South America

  Body & Chassis  1  1  

Manufacturing

Other(b)

   

 

2

1

  

  

   

 

1

—  

  

  

  Fluid  1  —  
  Other  1  —  

Australia

  Fluid  1  1  Manufacturing   1     1  

 

*(a)Includes Asia Pacific properties that are included in Body & Chassis and Fluid for segment reporting.
**Includes Nishikawa Standard Company (“NISCO”)NISCO joint venture operations.
(b)Includes design, engineering or administrative locations.

The Company’s global locations,

Our principal owned and leased properties, and the number of facilities in each countrylocation with more than one facility are as follows:set forth below.

 

AmericasLocation

  

Principal Products

  

Europe

Asia PacificOwned/Leased

BrazilNorth America

BelgiumAustralia
CamaçariGentAdelaide
Varginha

    
Sao Paulo*

Czech RepublicUnited States

China
ZdarChangchun¿
CanadaChongqing
Georgetown, ONFranceHuai-an¿
Glencoe, ONArgenteuil*Jingzhou¿
Mitchell, ONBaclairKunshan
Stratford, ON (3)CreutzwaldPanyu¿
LillebonneShanghai¿
MexicoVitréWuhu
Aguascalientes

    
Atlacomulco

Auburn, Indiana

  Anti-Vibration Systems  GermanyOwned

Auburn Hills, Michigan(a)

  Design, engineering and administration  IndiaLeased
Guaymas

Bowling Green, Ohio(2)

  Body Sealing and Fluid Handling  GrünbergOwned

Bremen, Indiana(b)

  Body Sealing  ChennaiOwned
Juarez

East Tawas, Michigan

  Fluid Handling  HockenheimOwned

Fairview, Michigan

  Fluid Handling  DharuheraOwned
Saltillo

Farmington Hills, Michigan(a)

  Design, engineering and administration  LindauLeased

Gaylord, Michigan

  Body Sealing  Ghaziabad¿Owned
Torreon (2)

Goldsboro, North Carolina(2)

  Body Sealing  MannheimOwned

Leonard, Michigan

  Fluid Handling  Gurgaon¿Owned

Mt. Sterling, Kentucky

  Fluid Handling  MarsbergOwned

New Lexington, Ohio

  Fluid Handling  PuneOwned
USA

Novi, Michigan(a)

  Design, engineering and administration  SchelklingenLeased

Oscoda, Michigan

Fluid HandlingOwned

Spartanburg, South Carolina

Body SealingOwned

Surgoinsville, Tennessee

Fluid HandlingLeased

Topeka, Indiana(b)

Body SealingOwned

Canada

    

Georgetown, Ontario

Body SealingOwned

Glencoe, Ontario

Fluid HandlingOwned

Mitchell, Ontario

Anti-Vibration SystemsOwned

Stratford, Ontario(3)

Body SealingOwned

Archbold, OHMexico

    

Aguacalientes

  JapanBody SealingLeased
Auburn, IN

Atlacomulco

Fluid HandlingOwned

Guaymas

Fluid HandlingLeased

Juarez

Fluid HandlingOwned

Saltillo

Fluid HandlingLeased

Torreon(2)

Fluid HandlingOwned

South America

    

NetherlandsBrazil

    

Camaçari

Fluid HandlingLeased

Sao Bernardo(a)

Sales & AdministrationLeased

Varginha

Body Sealing and Fluid HandlingOwned

Hiroshima*Europe

¿Belgium

Gent

Body SealingLeased

Czech Republic

Zdar

Fluid HandlingOwned

France

Argenteuil(a)

Design, engineering and administrationLeased

Baclair

Body SealingLeased

Creutzwald

Fluid HandlingOwned

Lillebonne

Body SealingOwned

Vitré

Body SealingOwned

AmericasLocation

  

Principal Products

  

Europe

Asia PacificOwned/Leased

Auburn Hills, MI*Amsterdam*Nagoya*
Bowling Green, OH (2)

Germany

    
Bremen, IN¿

Grünberg

  Fluid Handling  ItalyLeased

Hockenheim

  Fluid Handling  KoreaOwned
East Tawas, MI

Lindau

  Body Sealing  BattipagliaOwned

Mannheim

  Body Sealing  Cheong-JuOwned
Fairview, MI

Schelklingen

  Fluid Handling  CirièIncheon*Owned
Farmington Hills, MI*Seo-Cheon
Gaylord, MI

PolandItaly

    
Goldsboro, NC (2)

Battipaglia

  Body Sealing  Bielsko-BialaOwned

Ciriè

Body SealingOwned

Netherlands

    
Leonard, MI

Amsterdam(a)

  Administration  Dzierzoniow (2)Leased

Poland

    
Mt. Sterling, KY

Bielsko-Biala

  Body Sealing  Owned

Dzierzoniow(2)

Body SealingOwned

Myslenice

Body SealingLeased

Piotrkow

Body SealingOwned

Spain

    
New Lexington, OH

Getafe(c)

  Fluid Handling  PiotrkowOwned

United Kingdom

    
Novi, MI*

Coventry(a)

  Design, engineering and administration  Leased

Asia Pacific

    
Oscoda, MI

SpainAustralia

    
Spartanburg, SC

Adelaide

  Fluid Handling  GetafeOwned

China

    
Surgoinsville, TN

Changchun(b)

  Fluid Handling  Leased

Chongqing

Fluid HandlingOwned

Huai-an(b)

Body SealingLeased

Jingzhou(b)

Fluid HandlingOwned

Kunshan

Anti-Vibration, Body Sealing and Fluid HandlingOwned

Panyu(b)

Body SealingLeased

Shanghai(b)

Body SealingOwned

Wuhu

Body SealingOwned

India

    
Topeka, IN¿

Chennai

  Fluid Handling  Leased

Dharuhera(b)

Body SealingLeased

Sahibabad(b)

Body SealingLeased

Manesar(b)

Body SealingLeased

Pune

Fluid HandlingLeased

United KingdomJapan

    

Hiroshima(a)

  Design, engineering and administration  Coventry*Leased

Nagoya(a)

Design, engineering and administrationLeased

Korea

    

Cheong-Ju

Body SealingOwned

Seo-Cheon Gun

Body Sealing & Fluid HandlingOwned

 

*(a)Denotes non-manufacturing locations, including design, engineering or administrative locations.
¿(b)Denotes a joint venture facility.
(c)Denotes locations beinga location closed in 2009.2010.

Item 3.Legal Proceedings

We are periodically involved in claims, litigation and various legal actions and claims arisingmatters that arise in the ordinary course of business, including without limitation intellectual propertybusiness. In addition, we conduct and monitor environmental investigations and remedial actions at certain locations. Each of these matters product related claims, tax claims,is subject to various uncertainties, and employment matters. Although the outcomesome of legalthese matters cannotmay be predicted with certainty,resolved unfavorably for us. If appropriate we establish a reserve estimate for each matter and update our estimate as additional information becomes available. We do not believe that the ultimate resolution of any of these matters with which we are currently involved, either individually or in the aggregate, will have a material adverse effect on our liquidity,business, financial condition or results of operations.

On August 3, 2009, the Debtors filed a voluntary petition for relief in the Bankruptcy Court to reorganize under Chapter 11 of the Bankruptcy Code. The Debtors continued to operate their businesses and owned and managed their properties as a debtor-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code until the Debtors emerged from protection under Chapter 11 of the Bankruptcy Code on May 27, 2010. See “Item 8. Financial Statements and Supplementary Data” (especially Note 14).3. “Reorganization Under Chapter 11 of the Bankruptcy Code” to the consolidated financial statements.

 

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

No matters were submitted to a vote of the Company’s stockholders during the fourth quarter of 2008.

PART II

 

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Equity interests in Cooper-Standard Holdings Inc. consist ofMarket Information

Our common stock has been quoted on the OTC Bulletin Board since May 27, 2010 under the symbol “COSH.OB” and our warrants have been quoted on the OTC Bulletin Board since June 4, 2010 under the symbol “COSHW.OB.” No prior established public trading market existed for our common stock or warrants prior to these dates.

There currently is a limited trading market for our common stock and warrants. The following chart lists the high and low sale prices for shares of itsour common stock $0.01 par value per share. Cooper-Standard Holdings Inc. has been a privately held entity since its formation and no trading market existswarrants for its common stock. Atthe calendar quarters indicated through December 31, 2008, 3,479,1002010. These prices are between dealers and do not include retail markups, markdowns or other fees and commissions and may not represent actual transactions:

   Common Stock   Cash
Dividend

Per  share
   Warrants 

Quarter Ended

  High   Low     High   Low 

June 30, 2010

  $35.75    $31.50    $    $17.00    $14.00  

September 30, 2010

  $37.00    $27.45    $    $20.00    $13.00  

December 31, 2010

  $49.55    $36.00    $    $28.00    $15.00  

The closing price of our common stock on the OTC Bulletin Board on December 31, 2010 was $45.00 per share and the closing price of our warrants on the OTC Bulletin Board on December 31, 2010 was $26.00 per warrant.

Holders of Common Stock

As of the date hereof, an aggregate of 7,774,519 shares of itsour common stock weremay be purchased upon the exercise of outstanding options, issued upon the exercise of our outstanding warrants and outstanding. issued upon the conversion of our outstanding shares of 7% preferred stock.

As of that date, there were 21January 27, 2011 we had approximately 475 holders of record of Cooper-Standard Holdings Inc.our common stock.stock, based on information provided by our transfer agent.

Dividends

Cooper-Standard Holdings Inc. has never paid or declared a dividend.dividend on its common stock. The declaration of any prospective dividends is at the discretion of the Board of Directors and would be dependent upon sufficient earnings, capital requirements, financial position, general economic conditions, state law requirements, and other relevant factors. Additionally, our credit agreement withgoverning our lenders prohibits payment ofSenior ABL Facility and the Senior Notes indenture contain covenants that among other things restrict our ability to pay certain dividends exceptand distributions subject to certain qualifications and limitations. We do not anticipate paying any dividends on our common stock dividends, withoutin the lenders’ prior consent.forseeable future.

Performance Graph

The following table presents all stock-based compensation plansgraph compares the cumulative total stockholder return from May 27, 2010, the date of the Company atour emergence from Chapter 11 bankruptcy proceedings, through December 31, 2008:2010, for Cooper-Standard Holdings Inc. existing common stock, the Standard & Poor’s 500 Index and the Standard & Poor’s Supercomposite Auto

Parts & Equipment Index based on currently available data. The graph assumes an initial investment of $100 on May 27, 2010 and reflects the cumulative total return on that investment, including the reinvestment of all dividends where applicable, through December 31, 2010.

Comparison of Cumulative Return

 

   (a)  (b)  (c)

Compensation Plan

  Number of Securities
to be Issued Upon
Exercise of
Outstanding
Options and Warrants
  Weighted-Average
Exercise Price of
Options and
Warrants
  Number of securities
remaining available for
future issuance under
equity compensation
plans
(excluding securities
reflected in column (a)

Equity compensation plans approved by security holders

  219,615  $102.46  204,000

Equity compensation plans not approved by security holders

  —     —    —  
          

Total

  219,615  $102.46  204,000
          
   Ticker  5/27/2010   12/31/2010 

Cooper-Standard Holdings Inc.

  COSH.OB  $100.00    $130.43  

S&P 500

  SPX  $100.00    $115.24  

S&P Supercomposite Auto Parts & Equipment Index

  S15AUTP  $100.00    $142.48  

 

Item 6.Selected Financial Data

The selected financial data referred to as the Successor data as of and for the years ended December 31, 2006, 2007, 2008 2007, 2006 and 2005,2009, the five months ended May 31, 2010 and as ofthe seven months ended December 31, 2004 and for the period from December 24, 2004 to December 31, 2004,2010 have been derived from theour consolidated audited financial statements, of Cooper-Standard Holdings Inc. and its subsidiaries which have been audited by Ernst & Young LLP, independent registered public accountants.

The selected financial data referred to as the Predecessor financial data as of the period from January 1, 2004 to December 23, 2004 have been derived from the combined audited financial statements of the automotive segment of Cooper Tire, which have been audited by Ernst & Young LLP, independent registered public accountants. The information reflects our business as it historically operated within Cooper Tire, and includes certain assets and liabilities that we did not acquire or assume as part of the 2004 Acquisition. Also, on December 23, 2004, Cooper-Standard Holdings Inc., which prior to the 2004 Acquisition never had any independent operations, purchased the automotive business represented in the historical Predecessor financial statements. As a result of applying the required purchase accounting rules to the 2004 Acquisition and accounting for the assets and liabilities that were not assumed in the 2004 Acquisition, our financial statements for the period following the acquisition were significantly affected. The application of purchase accounting rules required us to revalue our assets and liabilities, which resulted in different accounting bases being applied in different periods. As a result, historical combined financial data included in this Form 10-K in Predecessor statements may not reflect what our actual financial position, results of operations, and cash flows would have been had we operated as a separate, stand-alone company as of and for those periods presented.Independent Registered Public Accounting Firm.

The audited consolidated financial statements as of operations, statements of changes in equity (deficit) and statements of cash flows for the years ended December 31, 2006, 20072008 and 20082009, the five months ended May 31, 2010 and the seven months ended December 31, 2010 are included elsewhere in this Annual Report on Form 10-K. The audited consolidated balance sheets as of December 31, 2009 and December 31, 2010 are included elsewhere in this Annual Report on Form 10-K. See “ItemItem 8. Financial“Financial Statements and Supplementary Data.”

In connection with our emergence from bankruptcy effective May 31, 2010, we implemented “fresh-start” accounting. As required by “fresh-start” accounting, assets and liabilities were recorded at fair value, based on values determined in connection with the implementation of the Debtors’ Joint Chapter 11 Plan of Reorganization or our Plan of Reorganization. Accordingly, our financial condition and results of operations from and after our emergence from bankruptcy are not comparable to the financial condition or results of operations reflected in our historical financial statements for periods prior to our emergence from bankruptcy.

You should read the following data in conjunction with “ItemItem 7. Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and theour consolidated financial statements of Cooper-Standard Holdings Inc.and the notes thereto included elsewhere in this Annual Report on Form 10-K (Information presented in millions).10-K.

 

  Predecessor Successor  Predecessor  Successor 
  January 1, 2004
to December 23,
2004
 December 24, 2004
to December 31,
2004
 Year Ended
December 31,
2005
 Year Ended
December 31,
2006
 Year Ended
December 31,
2007
 Year Ended
December 31,
2008
  Year Ended December 31, Five Months
Ended
May 31, 2010
  Seven Months
Ended
December 31, 2010
 

Statement of operations

       
 2006 2007 2008 2009 Five Months
Ended
May 31, 2010
  Seven Months
Ended
December 31, 2010
 
Statement of operations: (dollar amounts in millions except per share amounts)

Net sales

  $1,858.9  $4.7  $1,827.4  $2,164.3  $2,511.2  $2,594.6  $2,164.3   $2,511.2   $2,594.6   $1,945.3   $1,009.1   $1,405.0  

Cost of products sold

   1,539.1   4.7   1,550.2   1,832.1   2,114.1   2,260.1   1,832.1    2,114.1    2,260.1    1,679.0    832.2    1,172.4  
                                     

Gross profit

   319.8   —     277.2   332.2   397.1   334.5   332.2    397.1    334.5    266.3    176.9    232.6  

Selling, administration, & engineering expenses

   177.5   5.2   169.7   199.8   222.1   231.7   199.8    222.1    231.7    199.5    92.1    159.5  

Amortization of intangibles

   0.7   —     28.2   31.0   31.9   31.0   31.0    31.9    31.0    15.0    0.3    9.0  

Impairment charges

   —     —     —     13.2   146.4   33.4   13.2    146.4    33.4    363.5    —      —    

Restructuring

   21.2   —     3.0   23.9   26.4   38.3   23.9    26.4    38.3    32.4    5.9    0.5  
                                     

Operating profit

   120.4   (5.2)  76.3   64.3   (29.7)  0.1 

Operating profit (loss)

  64.3    (29.7  0.1    (344.1  78.6    63.6  

Interest expense, net of interest income

   (1.8)  (5.7)  (66.6)  (87.2)  (89.5)  (92.9)  (87.2  (89.5  (92.9  (64.3  (44.5  (25.0

Equity earnings

   1.0   —     2.8   0.2   2.2   0.9   0.2    2.2    0.9    4.0    3.6    3.4  

Reorganization items, net

  —      —      —      (17.4  660.0    —    

Other income (expense)

   (2.1)  4.6   (1.3)  7.0   (1.1)  (0.3)  7.9    (0.5  (1.4  9.9    (21.2  4.2  
                                     

Income (loss) before income taxes

   117.5   (6.3)  11.2   (15.7)  (118.1)  (92.2)  (14.8  (117.5  (93.3  (411.9  676.5    46.2  

Provision for income taxes (benefit)

   34.2   (1.8)  2.4   (7.3)  32.9   29.3   (7.3  32.9    29.3    (55.7  39.9    5.1  
                                     

Net income (loss)

  $83.3  $(4.5) $8.8  $(8.4) $(151.0) $(121.5)

Consolidated net income (loss)

  (7.5  (150.4  (122.6  (356.2  636.6    41.1  

Add: Net loss (income) attributable to noncontrolling interests

  (0.9  (0.6  1.1    0.1    (0.3  (0.5
                                     

Net income (loss) attributable to Cooper-Standard Holdings Inc.

 $(8.4 $(151.0 $(121.5 $(356.1 $636.3   $40.6  
                  

Statement of cash flows data

       

Net income available to Cooper-Standard Holdings Inc. common stockholders

      $28.7  
        

Basic net income per share attributable to Cooper-Standard Holdings Inc.

      $1.64  
        

Diluted net income per share attributable to Cooper-Standard Holdings Inc.

      $1.55  
        

Balance sheet data (at end of period):

      

Cash and cash equivalents

 $56.3   $40.9   $111.5   $380.3    $294.5  

Net working capital(1)

  212.1    249.8    154.5    240.8     175.3  

Total assets

  1,911.4    2,162.3    1,818.3    1,737.4     1,853.8  

Total non-current liabilities

  1,256.1    1,351.6    1,346.9    263.9     751.9  

Total debt(2)

  1,055.5    1,140.2    1,144.1    204.3     476.7  

Liabilities subject to compromise

  —      —      —      1,261.9     —    

Preferred Stock

  —      —      —      —       130.3  

Total equity/(deficit)

  324.0    276.8    19.7    (306.5   563.1  

Statement of cash flows data:

      

Net cash provided (used) by:

             

Operating activities

  $132.2  $29.3  $113.0  $135.9  $185.4  $136.5  $135.9   $185.4   $136.5   $130.0   $(75.4 $170.6  

Investment activities

   (53.5)  (1,132.9)  (133.0)  (281.8)  (260.0)  (73.9)  (281.8  (260.0  (73.9  (45.5  (19.1  (51.8

Financing activities

   (109.6)  1,189.3   (7.2)  147.6   55.0   14.1   147.6    55.0    14.1    166.1    (112.6  (1.4

Other financial data

       

Other financial data:

      

Capital expenditures

  $62.7  $0.3  $54.5  $82.9  $107.3  $92.1  $82.9   $107.3   $92.1   $46.1   $22.9   $54.4  

Balance sheet data

       

Cash and cash equivalents

   $83.7  $62.2  $56.3  $40.9  $111.5 

Net working capital (1)

    123.1   162.9   212.1   249.8   154.5 

Total assets

    1,812.3   1,734.2   1,911.4   2,162.3   1,818.3 

Total non-current liabilities

    1,165.0   1,117.9   1,259.4   1,359.8   1,351.4 

Total debt (2)

    912.7   902.5   1,055.5   1,140.2   1,144.1 

Net parent investment / Stockholders’ equity

    318.2   312.2   320.7   268.6   15.2 

 

(1)Net working capital is defined as current assets (excluding cash and cash equivalents) less current liabilities (excluding debt payable within one year).
(2)Includes term loans, bonds, $1.5$450.0 million of our Senior Notes, $0.4 million in capital leases, $60.9 million of revolving credit, and $28.4$26.3 million of other third-party debt at December 31, 2008.2010.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The followingThis management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Our historical results may not indicate, and should not be relied upon as an indication of, our future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. See Item 1. “Business—Forward-Looking Statements” for a discussion of risks associated with reliance on forward-looking statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Item 1A.” Risk Factors.” Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with theItem 6.” Selected Financial Data” and our consolidated financial statements and the notes theretoto those statements included elsewhere in this Annual Report on Form 10-K. The following discussion of the financial condition and results of operations of the Company contains certain forward-looking statements relating to anticipated future financial conditions and operating results of the Company and its current business plans. In the future, the financial condition and operating results of the Company could differ materially from those discussed herein and its current business plans could be altered in response to market conditions and other factors beyond the Company’s control. Important factors that could cause or contribute to such differences or changes include those discussed elsewhere in this report. See “Item 1. Business – Forward Looking Statements” and “Item 1A. Risk Factors.”

Basis of Presentation

Prior to the 2004 Acquisition, the automotive segment of Cooper Tire & Rubber Company (referred to as the “Predecessor”) did not operate as a stand-alone business, but as a reportable business segment of Cooper Tire & Rubber Company (“Cooper Tire”). The financial information of the Predecessor represents the combined results of operations and cash flows of the automotive business segment of Cooper Tire and reflects the historical basis of accounting without any application of purchase accounting for the 2004 Acquisition. The financial information of the Company following the 2004 Acquisition (referred to as the “Successor”) included in this Annual Report on Form 10-K represents our consolidated financial position as of December 31, 20072009 and 20082010 and our consolidated results of operations and cash flows for the years ended December 31, 2006, 20072008 and 20082009, the five months ended May 31, 2010 and the seven months ended December 31, 2010 and reflects the application of purchase accounting. On May 31, 2010 we adopted “fresh-start” accounting and became a new entity for financial reporting purposes. See Note 4. “Fresh-Start Accounting” to the consolidated financial statements.

Company Overview

We design, manufacture and sell body sealing, NVH controlAVS and fluid handling components, systems, subsystems and modules for use in passenger vehicles and light trucks manufactured by global OEMs. In 2008,2010, approximately 76%81% of our sales consisted of original equipment sold directly to the OEMs for installation on new vehicles. The remaining 24%19% of our sales were primarily to Tier I and Tier II suppliers.suppliers and non-automotive manufacturers. Accordingly, sales of our products are directly affected by the annual vehicle production of OEMs and, in particular, the production levels of the vehicles for which we provide specific parts. In most cases,Most of our products are custom designed and engineered for a specific vehicle platform. Our sales and product development personnel frequently work directly with the OEMs’ engineering departments in the design and development of our various products.

Although each OEM may emphasize different requirements as the primary criteria for judging its suppliers, we believe success as an automotive supplier generally requires outstanding performance with respect to price, quality, service, performance, design and engineering capabilities, innovation and timely delivery. As such,Importantly, we believe our continued commitment to investment in our engineeringdesign and designengineering capability, including enhanced computerized software design capabilities, is important to our future success, and many of our present initiatives are designed to enhance these capabilities. ToIn addition, in order to remain competitive we must also consistently achieve and sustain cost savings;savings. In an effort to continuously reduce our cost structure, we seek to identify and implement “lean” initiatives, which focus on optimizing manufacturing by eliminating waste, controlling costs and enhancing productivity. We evaluate opportunities to consolidate facilities and to relocate certain operations to lower cost countries. We believe we will continue to be successful in our efforts to improve our design and engineering designcapability and manufacturing processes and implementwhile achieving cost savings, including through our Leanlean initiatives.

Our OEM sales are generally based uponprincipally generated from purchase orders issued by the OEMs and as sucha result we do not have a backlog of orders at any point in time.no order backlog. Once selected by an OEM to supply products for a particular platform, we typically supply those products for the life of the platform, life, which is normally six to eight years,years; although there is no guarantee that this will occur. In addition, when we are the incumbent supplier to a given platform, we believe we have ana competitive advantage in winning the redesign or replacement platform.

We provide parts to virtually every major global OEM for use on a multitude of different platforms. However, we generate a significant portion of our sales from the Detroit 3-Ford, General Motors and Chrysler. For

In the year ended December 31, 2008, our sales to the global operations of Ford, General Motors, and Chrysler comprised2010, approximately 25%, 16%, and 7% of our net sales, respectively. Significant reduction52% of our sales to or the loss of any one of these customers or any significant reduction in these customers’ market shares could have a material adverse effect on the financial results of our company.

While approximately 48% of sales arewere generated in North America while approximately 48% of our considerable market share throughoutsales were generated outside of North America. Because of our significant international operations, we are subject to the world provides some additional risks.risks associated with doing business in other countries. Historically, our operations in Canada and Western Europe have not presented materially different risks or problems from those we have encountered in the United States, although the cost and complexity of streamlining operations in certain European countries is greater than would be the case in the United States. This is due primarily to labor laws in those countries

that can make reducing employment levels more time-consuming and expensive than in the United States. We believe the risks of conducting business in less developed markets, including Brazil, Mexico, Poland, Czech Republic, China, Korea and India are sometimes greater than in the U.S., Canadian and Western European markets. This is due to the potential for currency volatility, high interest and inflation rates, and the general political and economic instability that are associated with these markets.

Bankruptcy Cases

On August 3, 2009, the Debtors filed voluntary petitions for Chapter 11 bankruptcy protection in the Bankruptcy Court. On August 4, 2009, CSA Canada sought relief under the Companies’ Creditors Arrangement Act in the Canadian Court. The Debtors and CSA Canada emerged from their respective insolvency proceedings on May 27, 2010, with approximately $480.0 million of funded debt, representing a reduction of over $650.0 million from prepetition levels.

As part of our emergence from Chapter 11, we raised $450.0 million through the issuance of our Senior Notes, and entered into a $125.0 million Senior ABL Facility, with certain agent and lending banks. In addition, we raised $355.0 million through the issuance of (i) $100.0 million of our 7% preferred stock to the Backstop Parties pursuant to a commitment agreement that provided for the backstop of our rights offering and (ii) $255.0 million of our common stock to the Backstop Parties and holders of our prepetition 8 3/8% senior subordinated notes due 2014 (the “prepetition senior subordinated notes”) pursuant to our rights offering. The Backstop Parties also received warrants to purchase 7% of our common stock (assuming the conversion of our 7% preferred stock) for their commitment to backstop the rights offering.

In connection with our emergence from Chapter 11, amounts outstanding under our $175.0 million debtor-in-possession financing facility and $639.6 million of claims under our prepetition credit facility were paid in full in cash. Holders of our prepetition 7% senior notes due 2012 (the “ prepetition senior notes”) were also paid in full in cash, except that the Backstop Parties received a distribution of our common stock in lieu of the cash payment for certain of their prepetition senior note claims. Holders of our prepetition senior subordinated notes were issued 8% of our outstanding common stock and warrants to purchase, in the aggregate, 3% of our outstanding common stock (in each case, assuming the conversion of our 7% preferred stock). In addition, our obligations under both our prepetition senior notes and our prepetition senior subordinated notes were cancelled. See “—Liquidity and Capital Resources—After Emergence from Bankruptcy Proceedings” and Note 8. “Debt” to the consolidated financial statements for a more detailed description of our Senior Notes and Senior ABL Facility, Note 18. “Capital Stock” to the consolidated financial statements for a more detailed description of our equity securities and Note 3. “Reorganization Under Chapter 11 of the Bankruptcy Code” to the consolidated financial statements for a more detailed description of our reorganization.

In connection with our emergence from bankruptcy, we implemented “fresh-start” accounting. As required by “fresh-start” accounting, assets and liabilities were recorded at fair value, based on values determined in connection with the implementation of our Plan of Reorganization. Accordingly, our financial condition and results of operations from and after our emergence from bankruptcy are not comparable to the financial condition or results of operations reflected in our historical financial statements for periods prior to our emergence from bankruptcy.

Under the Bankruptcy Reorganization Plan, our prepetition senior subordinated notes and other obligations were extinguished. Absent an exception, a debtor recognizes cancellation of indebtedness income (“CODI”) upon

discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Internal Revenue Code, as amended (“IRC”), provides that a debtor in a bankruptcy case may exclude CODI from income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. As a result of the market value of our equity upon emergence from Chapter 11 bankruptcy proceedings, our U.S. net operating loss carryforward will be reduced to zero, however a portion of our tax credit carryforwards (collectively, the “Tax Attributes”) will be retained after reduction of the Tax Attributes for CODI realized on emergence from Chapter 11 bankruptcy proceedings.

IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. The Company’s emergence from Chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRC Section 382. The limitation under the IRC is based on the value of the corporation as of the emergence date. As a result, our future U.S. taxable income may not be fully offset by the Tax Attributes if such income exceeds our annual limitation, and we may incur a tax liability with respect to such income. In addition, subsequent changes in ownership for purposes of the IRC could further diminish the Tax Attributes.

Business Environment and Outlook

Our business is greatlydirectly affected by the automotive build rates in North America and Europe. It is also becoming increasingly impacted by build rates in Brazil and Asia Pacific. New vehicle demand is driven by macro-economic and other factors, such as interest rates, manufacturer and dealer sales incentives, fuel prices, consumer confidence, and employment andlevels, income growth trends.trends, government incentives such as “cash for clunkers” and tax incentives. The severe global financial crisis that started in the second half of 2008 has reduced vehicle demand overall resulting in 2009 light vehicle production volumes of 8.6 million units in North America and 16.3 million units in Europe. The expected annualized light vehicle production volumes for 2011 are 12.9 million units in North America and 18.6 million units in Europe, according to historic lows putting severe financial stress on the entire automotive industry.IHS Automotive in December 2010.

According to IHS Automotive, actual North American light vehicle production volumes for 2010 were 11.9 million compared to 8.6 million in 2009, an increase of approximately 39.1%, and European light vehicle production volumes were 18.7 million for 2010 compared to 16.3 million in 2009, an increase of approximately 15.2%.

Competition in the automotive supplier industry is intense and has increased in recent years as OEMs have demonstrated a preference for stronger relationships with fewer suppliers. There are typically three or more significant competitors and numerous smaller competitors for most of the products we produce. However,Globalization and the financial crisis and difficult industry environment is expectedimportance to result in significant consolidation amongservice customers around the world will continue to shape the success of suppliers which will provide conquest opportunities for larger global suppliers.going forward.

OEMs have shifted some research and development, design and testing responsibility to suppliers, while at the same time shortening new product cycle times. To remain competitive, suppliers must have state-of-the-art engineering and design capabilities and must be able to continuously improve their engineering, design and manufacturing processes to effectively service the customer. Suppliers are increasingly expected to collaborate on, or assume the product design and development of, key automotive components and to provide value addedinnovative solutions under more stringent time frames.to meet evolving technologies aimed at improved emissions and fuel economy.

Pricing pressure has continued as competition for market share has reduced the overall profitability of the industry and resulted in continued pressure on suppliers for price concessions. TheConsolidations and market shares ofshare

shifts among vehicle manufacturers continues to put additional pressures on the Detroit 3 has declined in recent yearssupply chain. These pricing and may continue to decline in the future. This pricing pressuremarket pressures, along with the current financial crisisreduced production volumes, will continue to drive our focus on reducing our overall cost structure through lean initiatives, capital redeployment, restructuring and other cost management processes.

Results of Operations

(dollar amounts in thousands except per share amounts)

   Predecessor  Successor 
   Year Ended
December 31, 2008
  Year Ended
December 31, 2009
  Five Months
Ended
May 31, 2010
  Seven Months
Ended
December 31, 2010
 

Sales

  $2,594,577   $1,945,259   $1,009,128   $1,405,019  

Cost of products sold

   2,260,063    1,678,953    832,201    1,172,350  
                 

Gross profit

   334,514    266,306    176,927    232,669  

Selling, administration & engineering expenses

   231,709    199,552    92,166    159,573  

Amortization of intangibles

   30,996    14,976    319    8,982  

Impairment charges

   33,369    363,496    —      —    

Restructuring

   38,300    32,411    5,893    488  
                 

Operating profit (loss)

   140    (344,129  78,549    63,626  

Interest expense, net of interest income

   (92,894  (64,333  (44,505  (25,017

Equity earnings

   897    4,036    3,613    3,397  

Reorganization items and fresh-start accounting adjustments, net

   —      (17,367  660,048    —    

Other income (expense), net

   (1,368  9,919    (21,156  4,214  
                 

Income (loss) before income taxes

   (93,225  (411,874  676,549    46,220  

Provision (benefit) for income tax expense

   29,295    (55,686  39,940    5,095  
                 

Consolidated net income (loss)

   (122,520  (356,188  636,609    41,125  

Add: Net (income) loss attributed to noncontrolling interests

   1,069    126    (322  (549
                 

Net income (loss) attributable to Cooper-Standard Holdings Inc.

  $(121,451 $(356,062 $636,287   $40,576  
                 

Net income available to Cooper-Standard Holdings Inc. common stockholders

     $28,723  
        

Basic net income per share attributable to Cooper-Standard Holdings Inc.

     $1.64  
        

Diluted net income per share attributable to Cooper-Standard Holdings Inc.

     $1.55  
        

Seven Months Ended December 31, 2010, Five Months Ended May 31, 2010 and Twelve Months ended December 31, 2009

Due to our adoption of fresh-start accounting on May 31, 2010, the accompanying Consolidated Statements of Operations include the year-to-date results of operations of the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings (the “Predecessor”) for the five months ended May 31, 2010 and include the results of operations of the reporting entity subsequent to emergence from Chapter 11 bankruptcy proceedings (the “Successor”) for the seven months ended December 31, 2010.

For the five months ended May 31, 2010, we recognized a gain of approximately $660.0 million for reorganization items as a result of the bankruptcy proceedings and the effects of fresh-start accounting. This gain reflects the cancellation of our prepetition equity, debt and certain of our other obligations, partially offset by the recognition of certain of our new equity and debt obligations, as well as professional fees incurred as a direct result of the bankruptcy proceedings.

In addition, we recognized charges of approximately $9.9 million in the seven months ended December 31, 2010 as a result of the bankruptcy proceedings and the adoption of fresh-start accounting. The majority of these charges related to the cost-reductioninventory fair value adjustment of approximately $8.1 million, which was recognized in cost of sales in the seven months ended December 31, 2010 as the inventory was sold.

Sales.Sales for the seven months ended December 31, 2010 were $1,405.0 million. Sales were favorably impacted by a significant increase in volume, partially offset by unfavorable foreign exchange of $29.3 million. Sales were $1,009.1 million for the five months ended May 31, 2010. Sales were favorably impacted by a significant increase in volume and favorable foreign exchange of $52.5 million. Sales for the twelve months ended December 31, 2009 were $1,945.3 million.

Gross Profit.Gross profit for the seven months ended December 31, 2010 and the five months ended May 31, 2010 were $232.7 million and $176.9 million, respectively. Gross profit as a percentage of sales was 16.6% for the seven months ended December 31, 2010 and 17.5% for the five months ended May 31, 2010. Gross profit and gross profit margin for these two periods were favorably impacted by a significant increase in volumes in most regions and our lean savings, partially offset by the restoration of certain employee pay and benefits and slightly higher raw material costs. The seven months ended December 31, 2010 was also impacted by the liquidation of the fair value adjustment to inventory of $8.1 million, which was recognized in cost of sales as the inventory was sold. Gross profit and gross profit as a percentage of sales for the twelve months ended December 31, 2009 were $266.3 million and 13.7%, respectively.

Selling, Administration and Engineering. Selling, administration and engineering expenses for the seven months ended December 31, 2010 were $159.6 million and $92.2 million for the five months ended May 31, 2010. Both periods were primarily impacted by the restoration of certain employee pay and benefits. Selling, administration and engineering expenses were $199.6 million for the twelve months ended December 31, 2009.

Impairment Charges. In 2009, we recorded a goodwill impairment charge of $157.2 million and impairment charges of $202.4 million related to certain intangible assets and $3.8 million related to certain fixed assets within our North America and International segments. During the second quarter of 2009, several events occurred that indicated potential impairment of our goodwill, other intangible assets and certain fixed assets. Such events included: (a) the Chapter 11 bankruptcy of both Chrysler and GM and unplanned plant shut-downs by both Chrysler and GM; (b) continued product volume risk and negative product mix changes; (c) commencement of negotiations with our former shareholders, senior secured lenders and bondholders to recapitalize our long term debt and equity; (d) recognition as the second quarter progressed that there was an increasing likelihood that we would breach our financial covenants under our prepetition credit agreement; (e) our decision to defer our June 15, 2009 interest payment on our prepetition senior and senior subordinated notes pending the outcome of our quarterly financial results; (f) an analysis of whether we would meet our financial covenants for the past quarter; and (g) negotiations with our various constituencies. As a result of the combination of the above factors, we significantly reduced our second quarter projections.

Restructuring.Restructuring charges were $0.5 million for the seven months ended December 31, 2010, $5.9 million for the five months ended May 31, 2010, primarily representing the continuation of previously announced actions, takenand $32.4 million for the twelve months ended December 31, 2009. Restructuring expense for the seven months ended December 31, 2010 was favorably impacted by a curtailment gain relating to pension benefits of $3.4 million. The twelve months ended December 31, 2009 was affected by the final phase of our global product line operating divisions restructurings that were initiated in the first quarter of 2009. Restructuring charges of $18.8 million of this phase were recognized for the twelve months ended December 31, 2009. Restructuring charges of $10.2 million were also recognized for the twelve months ended December 31, 2009 for facility closures in South America, Europe and Asia Pacific that were also initiated in 2009.

Interest Expense, net. Interest expense for the seven months ended December 31, 2010 consisted primarily of interest on our Senior Notes. Interest expense for the five months ended May 31, 2010 includes $28.0 million

of interest from the period August 3, 2009 through May 27, 2010 and interest on the endDIP credit agreement. The interest on the prepetition debt obligations was recorded when our Plan of Reorganization was approved by the claimholders. Interest expense for the twelve months ended December 31, 2009 includes interest prior to August 3, 2009 on all of our prepetition debt obligations and debtor-in-possession financing.

Reorganization Items and Fresh-Start Accounting Adjustments, net.In the five months ended May 31, 2010, we recognized a gain of $520.1 million for reorganization items as a result of the bankruptcy proceedings. This gain reflects the cancellation of our prepetition equity, debt and certain of our other obligations, partially offset by the recognition of certain of our new equity and debt obligations, as well as professional fees incurred as a direct result of the bankruptcy proceedings. In addition, we recognized a gain of $139.9 million related to the valuation of our net assets upon emergence from Chapter 11 bankruptcy proceedings pursuant to the provisions of fresh-start accounting. For the year ended December 31, 2008 which are described under “Restructuring” beginning on page 41, on March 26, 2009 we recognized reorganization expenses of $17.4 million.

Other Income (Expense).Other income for the Company announced the implementation of a comprehensive plan involving the discontinuation of its global product line operating divisions, formerly called the Body & Chassis Systems division and the Fluid Systems division, and the establishment of a new operating structure organized on the basis of geographic regions. The Company will now operate from two divisions, North America and International (covering Europe, South America and Asia). This new operating structure allows the Company to maintain its full portfolio of global products and provide unified customer contact points, while better managing its operating costs and resources in severe industry conditions. It will result in a reduction in the Company’s worldwide salaried workforce of approximately 20 percent.

In the yearseven months ended December 31, 2008, our business2010 was negatively impacted$4.2 million, which consisted of $3.4 million of foreign currency gains and $1.5 million other income, partially offset by reduced OEM production volumes$0.7 million of losses on factoring of receivables. Other expense of $21.2 million for the five months ended May 31, 2010, consisted primarily of foreign currency losses. For the twelve months ended December 31, 2009, other income consisted of a gain of $9.1 million on the repurchase of debt, $4.5 million of foreign currency gains, and $3.6 million of losses on interest rate swaps and sale of receivables.

Provision for Income Tax Expense (Benefit).For the seven months ended December 31, 2010 and the five months ended May 31, 2010, we recorded income tax provisions of $5.1 million and $39.9 million, respectively, on earnings before income taxes of $46.2 million and $676.5 million, respectively. This compares to an income tax benefit of $(55.7) million on losses before income taxes of $(411.9) million for the twelve months ended December 31, 2009. Income tax expense for the five months ended May 31, 2010 and the seven months ended December 31, 2010 differ from statutory rates primarily as a result of several factors, including a prolonged strike at a major Tier One supplierthe reorganizational items and high oil pricesfresh start accounting adjustments; valuation allowances recorded on tax losses and credits generated in the first halfU.S. and certain foreign jurisdictions; the benefit related to the settlement of a bi-lateral advanced pricing agreement; the distribution of income between the U.S. and foreign sources; and other non-recurring discrete items.

Year ended December 31, 2009 Compared to Year Ended December 31, 2008

Sales. Our sales decreased from $2,594.6 million in 2008 to $1,945.3 million in 2009, a decrease of $649.3 million, or 25.0%. The decrease resulted primarily from lower unit sales volume in both our North America (primarily the United States and Canada) and International (primarily Europe) segments. In addition, foreign currency exchange had a net unfavorable impact on sales of $110.8 million due to the relative strength of the year, but most significantly duedollar against other currencies (most notably the euro). Customer price concessions also contributed to overall negative macroeconomic conditionsour decrease in the second halfsales.

Gross Profit. Gross profit decreased $68.2 million from $334.5 million in 2008 to $266.3 million in 2009. As a percentage of the year. These included disruptionssales, gross profit increased to 13.7% of sales in the financial markets which limited access2009 as compared to credit, a significant decline12.9% of sales in the demand for and production of passenger cars and light trucks and a deterioration2008. The decrease in the financial condition of certain of our customers. According to CSM Worldwide, actualgross profit resulted primarily from reduced North America and Europe light vehicle production volumesvolume, and unfavorable product mix. The increase in gross profit margin is primarily the result of the favorable impact of management actions and various cost saving initiatives, partially offset by the lower volume.

Selling, Administration, and Engineering. Selling, administration, and engineering expenses decreased $32.2 million to $199.6 million for the year ended December 31, 2008 were 12.6 million and 20.5 million units, respectively, as2009 compared to 15.1$231.7 million and 21.7 million units, respectively, for the year ended December 31, 2007. Additionally, we continued2008. This decrease is due primarily to experience significant pricing pressure from our customers despite volume declines. These negative impacts were partially offset

by favorable foreign currency translation in the first half of 2008. Our performance in 2008 has been, and will continue to be, impacted by changes in light vehicle production volumes, platform mix, customer pricing pressures, and the cost of raw materials.

Results of Operations

   For the Year Ended December 31, 
   2006  2007  2008 
(Dollar amounts in thousands)          

Sales

  $2,164,262  $2,511,153  $2,594,577 

Cost of products sold

   1,832,027   2,114,039   2,260,063 
             

Gross profit

   332,235   397,114   334,514 

Selling, administration, & engineering expenses

   199,739   222,134   231,709 

Amortization of intangibles

   31,025   31,850   30,996 

Impairment charges

   13,247   146,366   33,369 

Restructuring

   23,905   26,386   38,300 
             

Operating profit (loss)

   64,319   (29,622)  140 

Interest expense, net of interest income

   (87,147)  (89,577)  (92,894)

Equity earnings

   179   2,207   897 

Other income (expense)

   6,985   (1,055)  (299)
             

Loss before income taxes

   (15,664)  (118,047)  (92,156)

Provision for income tax expense (benefit)

   (7,244)  32,946   29,295 
             

Net loss

  $(8,420) $(150,993) $(121,451)
             

Year ended December 31, 2008 Compared to Year Ended December 31, 2007

Net Sales: Our net sales increased from $2,511.2 million in 2007 to $2,594.6 million in 2008, an increase of $83.4 million, or 3.3%. The increase resulted primarily from the full twelve months impact of the MAPS, El Jarudo and MAP India acquisitions and favorable foreign exchange rates ($70.6 million) partially offset by lower volume. In North America, our sales decreased by $282.0 million primarily due to lower unit sales volume partially offset by $5.8 million of favorable foreign currency translation. In our international operations, a sales increase of $365.4 million was attributable to a combination of factors including the acquisition of MAPS and MAP India, $64.8 million of favorable impact of foreign currency translationvarious cost saving initiatives and higher unit sales volumes partially offset by customer price concessions.management actions.

Gross Profit: Gross profit decreased $62.6 million to 12.9% of sales in 2008, as compared to 15.8% of sales in 2007. This decrease resulted primarily from reduced North America volume, and unfavorable mix.

Operating Profit (Loss):. Operating profitloss in 20082009 was $0.1$344.1 million compared to an operating loss reportedprofit of $0.1 million in 2007, of $29.6 million.2008. This increasedecrease is primarily due to the impairment charges of $146.4$363.5 million in 20072009 compared to $33.4 million in 2008, reduced volumes and unfavorable foreign exchange, partially offset by reduced volumes, increased material coststhe favorable impact of management actions and unfavorable foreign exchange.various cost saving initiatives.

Impairment Charges:Charges.In 2008, the Company2009, we recorded ana goodwill impairment charge of $21.9$157.2 million inand impairment charges of $202.4 million related to certain intangible assets and $3.8 million related to certain fixed assets within our North America and International segments. During the International Fluid reporting unitsecond quarter of 2009, several events occurred that indicated potential impairment of our Global Fluid segmentgoodwill, other intangible assets and certain fixed assets. Such events included: (a) the Chapter 11 bankruptcy of both Chrysler and GM and unplanned plant shut-downs by both Chrysler and GM; (b) continued product volume risk and negative product mix changes; (c) commencement of negotiations with our former shareholders, senior secured lenders and bondholders to recapitalize our long term debt and equity; (d) recognition as the second quarter progressed that there was an increasing likelihood that we would breach our financial covenants under our prepetition credit agreement; (e) our decision to defer our June 15, 2009 interest payment on our prepetition senior and senior subordinated notes pending the outcome of our quarterly financial results; (f) an analysis of whether we would meet our financial covenants for the past quarter; and (g) negotiations with our various constituencies. As a result of the combination of the above factors, we significantly reduced our second quarter projections.

In 2008, we recorded a goodwill impairment charge of $1.2$23.1 million in theour International Body & Chassis reporting unit of our Global Body & Chassis segment. These charges are a result of aThis charge resulted from the weakening global economy, athe global decline in vehicle production volumes and changes in product mix. Also, in 2008 the Companywe recorded intangible impairment charges of $2.3 million and $1.6$3.9 million related to Fluid and Body & Chassiscertain technology respectively.in our North America segment. Based on a discounted cash flow analysis it was determined that the historical cost of these intangible assets exceeded their fair value and impairment charges were recorded. Also, in 2008 the Companywe recorded fixed asset impairment charges of $6.4 million.

In 2007 we recorded a goodwill impairment charge of $142.9 million and charges of $3.5 million related to the impairment of certain intangible assets within the North America Fluid reporting unit of our Fluid segment. These charges resulted from projected declines in anticipated production volumes and a change in the production mix for certain key platforms in North America since the 2004 acquisition as well as the impact of increases in material costs and customer price concessions in North America.

Interest Expense, net:net. InterestThe decrease in interest expense increasedof $28.6 million in 2009 resulted primarily from the cessation of recording interest expense on our debt obligations that were in default, decreased interest rates and decreased term loan balances.

Other Income (Expense). Other income was $9.9 million in 2009 as a result of foreign currency gains of $4.5 million and gains on debt repurchases of $9.1 million, partially offset by $3.3the loss on the sale of receivables of $1.2 million and losses on interest rate swaps of $2.4 million. Other expense of $1.4 million in 2008 primarily due to increased indebtedness resulting from the acquisition of MAPS and increased short-term borrowings.

Other Expense: Other expense was $0.3 million in 2008 asprimarily a result of foreign currency losses of $0.9 million and a loss on the sale of receivables of $2.2 million, partially offset by minority interest income of $1.1 million and gaingains on debt repurchaserepurchases of $1.7 million. Other expense of $1.1 million in 2007 was primarily a result of foreign currency losses of $0.5 million and minority interest expense of $0.6 million.

Provision for Income Tax Expense (Benefit).Income taxes in 20072008 included an expense of $32.9 million for an effective rate of (27.9%) as compared to income tax expense of $29.3 million for an effective tax rate of (31.8%)31.4% as compared to an income tax benefit of $55.7 million for an effective tax benefit rate of 13.5% in 2008. Tax expense2009. The effective tax benefit rate in 2008 is2009 differs from the statutory tax rate primarily as a result of the nondeductible nature of the goodwill impairment charge;charge, the valuation allowances recorded on tax losses and credits generated in the U.S.United States and certain foreign jurisdictions;jurisdictions, the write-offbenefit related to the settlement of deferred tax assets in the U.K.;a bi-lateral advanced pricing agreement, the distribution of income between the U.S.United States and foreign sources;sources and other non-recurring discrete items.

Year ended December 31, 2007 Compared to Year Ended December 31, 2006

Net Sales: Our net sales increased from $2,164.3 million in 2006 to $2,511.2 million in 2007, an increase of $346.9 million, or 16.0%. The increase resulted primarily from the acquisition of MAPS and El Jarudo, favorable foreign exchange rates ($86.9 million) and higher unit sales volume partially offset by customer price concessions. In North America, our sales increased by $67.0 million primarily due to the acquisition of El Jarudo and $20.2 million of favorable foreign currency translation, partially offset by lower unit sales volumes and customer price concessions. In our international operations, a sales increase of $279.9 million was attributable to a combination of factors including the acquisition of MAPS, $66.7 million favorable impact of foreign currency translation and higher unit sales volumes partially offset by customer price concessions.

Gross Profit: Gross profit increased $64.9 million to 15.8% of sales in 2007, as compared to 15.4% of sales in 2006. This increase resulted primarily from the acquisition of MAPS and El Jarudo combined with the favorable impact of various cost saving initiatives and favorable foreign exchange rates, partially offset by customer price concessions and increased material costs.

Operating Profit (Loss): Operating loss in 2007 was $29.6 million compared to an operating profit reported in 2006, of $64.3 million. This decrease is primarily due to the impairment charges of $146.4 million and an increase in selling, administration and engineering expenses primarily due to the acquisitions of MAPS and El Jarudo, partially offset by gross profit increase of $64.9 million.

Impairment Charges: In 2007 we recorded a goodwill impairment charge of $142.9 million and write off charges of $3.5 million related to certain intangible assets within the North America Fluid reporting unit of our Fluid segment. These charges result from a recent and projected decline in anticipated production volumes and a change in the production mix for certain key platforms in North America since the 2004 acquisition as well as the impact of recent increases in material costs and customer price concessions in North America. In 2006, as a result of operating results in the Body & Chassis reportable segment, we recorded a goodwill impairment charge of $7.5 million and impairment charges of $5.8 million related to certain developed technology intangible assets. The impairment was recognized in our NVH segment in 2006. During 2007 we revised our segments and the NVH segment was combined with the Sealing segment to create the Body & Chassis segment.

Interest Expense, net: Interest expense increased by $2.4 million in 2007, primarily due to increased indebtedness resulting from the acquisition of MAPS and amortization of issuance costs associated with such borrowings.

Other Income (Expense): Other expense was $1.1 million in 2007 as a result of foreign currency losses of $0.5 million and minority interest expense of $0.6 million. Other income of $7.0 million in 2006 was primarily a result of a $4.1 million net gain related to the purchase of Senior Subordinated Notes, foreign exchange gains of $3.8 million, offset by a minority interest loss of $0.9 million.

Provision for Income Tax Expense (Benefit): Income taxes changed from a benefit of $7.2 million for an effective rate 46.2% in 2006 to an income tax expense of $32.9 million for an effective rate of (27.9%) in 2007. Tax expense in 2007 is primarily a result of the nondeductible nature of the goodwill impairment charge; valuation allowances recorded on tax losses and credits generated in the U.S.; tax rate changes enacted during 2007 in the Czech Republic, Canada, Germany, Spain and the United Kingdom resulting in additional expense related to the impact of deferred taxes recorded in those jurisdictions; the distribution of income between the U.S. and foreign sources; and other non-recurring discrete items. In 2006, the Company provided a benefit for net operating losses in the U.S. until that point when deferred tax assets exceeded the related liabilities and the recoverability was no longer assured beyond a reasonable doubt.

Segment Results of Operations

The following table presents sales and segment profit (loss) for each of our reportable segments for the years ended December 31, 2008 and 2009, five months ended May 31, 2010 and seven months ended December 31, 2010:

   For the Year Ended December 31, 
   2006  2007  2008 

Sales

    

Body & Chassis

  $1,100,390  $1,317,621  $1,523,314 

Fluid

   971,122   1,096,944   979,601 

Asia Pacific (1)

   92,750   96,588   91,662 
             
  $2,164,262  $2,511,153  $2,594,577 
             

Segment profit (loss)

    

Body & Chassis

  $(26,108) $33,993  $(16,919)

Fluid

   19,173   (137,913)  (49,556)

Asia Pacific (1)

   (8,729)  (14,127)  (25,681)
             
  $(15,664) $(118,047) $(92,156)
             

 

(1)The Asia Pacific segment consists of both Body & Chassis and Fluid products in that region with the exception of the joint venture with Shanghai SAIC, which was purchased as part of the MAPS acquisition and the MAP India joint venture. These joint ventures are included in the Body & Chassis segment which is in line with the internal management structure.
   Predecessor  Successor 
   For the Year Ended  Five Months  Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 
   2008  2009   
   (dollars in thousands) 

Sales

     

North America

  $1,244,423   $910,306   $508,738   $739,419  

International

   1,350,154    1,034,953    500,390    665,600  
                 
  $2,594,577   $1,945,259   $1,009,128   $1,405,019  
                 

Segment profit (loss)

     

North America

  $(36,662 $(246,015 $590,121   $58,004  

International

   (56,563  (165,859  86,428    (11,784
                 
  $(93,225 $(411,874 $676,549   $46,220  
                 

Seven Months Ended December 31, 2010, Five Months Ended May 31, 2010 and Twelve Months ended December 31, 2009

North America.Sales for the seven months ended December 31, 2010 were $739.4 million. Sales were favorably impacted by a significant increase in volume and favorable foreign exchange of $10.0 million. Sales for the five months ended May 31, 2010 were $508.7 million. Sales were favorably impacted by a significant increase in volume and favorable foreign exchange of $19.3 million. Sales for the twelve months ended December 31, 2009 were $910.3 million. Segment profit for the seven months ended December 31, 2010 was $58.0 million, which was favorably impacted by the improved volumes and our lean savings, partially offset by the restoration of certain employee pay and benefits and slightly higher raw material costs. Segment profit for the five months ended May 31, 2010 was $590.1 million. As a result of the reorganization and fresh-start accounting adjustments, a gain of $565.1 million was recognized in the North America segment. Segment profit also increased due to improved volumes and the favorable impact of our lean savings, partially offset by the restoration of certain employee pay and benefits, slightly higher raw material costs and recognition of interest on certain prepetition debt obligations for the period of August 3, 2009 through May 27, 2010, which was recorded when our Plan of Reorganization was approved by the claimholders. Segment loss for the twelve months ended December 31, 2009 was $246.0 million, which included impairment charges of $234.9 million for goodwill, intangibles and fixed assets.

International.Sales for the seven months ended December 31, 2010 were $665.6 million. Sales were favorably impacted by a significant increase in volume partially offset by unfavorable foreign exchange of $39.3 million. Sales for the five months ended May 31, 2010 were $500.4 million. Sales were favorably impacted by a significant increase in volume and favorable foreign exchange of $33.2 million. Sales for the twelve months ended December 31, 2009 were $1,035.0 million. Segment loss for the seven months ended December 31, 2010 was $11.8 million, which was negatively impacted by higher raw material costs, restoration of certain employee pay and benefits and unfavorable foreign exchange partially offset by the improved volumes and our lean savings. Segment profit for the five months ended May 31, 2010 was $86.4 million. As a result of the reorganization and fresh-start accounting adjustments, a gain of $94.9 million was recognized in the International segment. Segment profit was unfavorably impacted by the restoration of certain employee pay and benefits and slightly higher raw material costs partially offset by improved volumes and the favorable impact of our lean savings. Segment loss for the twelve months ended December 31, 2009 was $165.9 million, which included impairment charges of $95.2 million for goodwill, intangibles and fixed assets.

Year Ended December 31, 20082009 Compared to Year Ended December 31, 20072008

Body & Chassis:North America. Sales increased $205.7for 2009 decreased $334.1 million, or 15.6%, primarily due26.8% compared to the MAPS and MAP India acquisitions, favorable foreign exchange ($39.5 million), partially offset by lower sales volume. Segment profit decreased by $50.9 million as the result of lower sales volume, unfavorable sales mix, higher raw material costs and impairment charges of $5.2 million, partially offset by the acquisition of MAPS and MAP India.

Fluid: Sales decreased $117.3 million, or 10.7%,2008, primarily due to lower sales volume partially offset by favorable foreign exchange ($34.1 million). Segment profit increased by $88.4of $302.4 million as the result of impairment charges related to goodwill ($21.9 million), intangible assets ($2.3 million) and fixed assets

($4.1 million), compared to 2007 impairment charges of ($146.4 million) and the favorable impact of various cost saving initiatives. These favorable items were partially offset by reduced volumes, unfavorable sales mix, increased material costs and unfavorable foreign exchange.

Asia Pacific: Sales decreased $4.9 million, or 5.1%, primarily due to unfavorable foreign exchange ($3.0 million) and lower sales volume.of $23.4 million. Segment loss for 2009 increased by $11.6$209.4 million as a result of increased restructuring costs relatedcompared to the previously announced restructuring initiative in Australia and as a result of start-up related costs for operations in this region.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

Body & Chassis: Sales increased $217.2 million, or 19.7%,2008, primarily due to the acquisition of MAPS, higher sales volumes and favorable foreign exchange ($47.6 million), partially offset by customer price concessions. Segment profit increased by $60.1 million as the result of favorable impact of various cost savings initiatives and the acquisition of MAPS, partially offset by higher raw material costs and customer price concessions.

Fluid: Sales increased $125.8 million, or 13.0%, primarily due to the acquisition of El Jarudo, the full year impact of the FHS acquisition, higher sales volumes, and favorable foreign exchange ($37.5 million), partially offset by customer price concessions. Segment profit decreased by $157.1 million as the result of impairment charges related toof goodwill, in the North America reporting unit ($142.9 million),intangibles and intangiblefixed assets ($3.5 million), customer price concessions, higher raw material costs, and increased restructuring costs ($4.3 million). Such items were partially offset by the inclusion of El Jarudo, favorable foreign exchange, and the favorable impact of various cost savings initiatives.

Asia Pacific: Sales increased $3.8$234.9 million, or 4.1%, primarily due to favorable foreign exchange ($1.8 million) and higherlower sales volume partially offset by customer price concessions. Segment loss increased by $5.4 million as a result of start up related costs for operations in this region,and unfavorable foreign exchange, partially offset by the favorable impact of management actions and various cost savingssaving initiatives.

International. Sales for 2009 decreased $315.2 million, or 23.3% compared to 2008, primarily due to lower sales volume of $225.6 million and unfavorable foreign exchange $87.4 million. Segment loss for 2009 increased by $109.3 million compared to 2008, primarily due to the increased impairment charges of goodwill, intangibles and fixed assets of $95.2 million, lower sales volume and unfavorable foreign exchange, partially offset by the favorable impact of management actions and various cost saving initiatives.

Off-Balance Sheet Arrangements

We have provided a guarantee of a portion of the bank loans made to NISCO, our joint venture with Nishikawa Rubber Company. This debt guarantee is required of the partners by the joint-venture agreement and serves to support the credit-worthiness of NISCO. On July 1, 2003, NISCO entered into an additional bank loan with the joint venture partners each guaranteeing an equal portion of the amount borrowed. In accordance with FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” guarantees meeting the characteristics described in the Interpretation are required to be recorded at fair value. We did not have any exposure under the guarantee arrangements at December 31, 2008.

As a part of itsour working capital management, the Company sellswe sell certain foreign receivables through third party financial institutions without recourse. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company.

needs. At December 31, 2008, the Company2010 and 2009, we had $43.5$38.3 million and $39.7 million, respectively, of receivablereceivables outstanding under receivablesreceivable transfer agreements entered into by various foreign locations. The CompanyFor the seven months ended December 31, 2010, five months ended May 31, 2010, and twelve months ended December 31, 2009, total accounts receivables factored were $70.3 million, $40.6 million, and $115.5 million, respectively. Losses incurred losses on the sale of the receivables were $0.7 million and $0.4 million for the yearseven months ended December 31, 2008 of $2.22010 and five months ended May 31, 2010, respectively and $0.9 million and isfor the twelve months ended December 31, 2009. These amounts are recorded in other income (expense) in the consolidated statements of operations. The Company is continuingWe continue to service the receivables for one of the locations. These are permitted transactions under the Company’sour credit agreement. The Company isagreement governing our Senior ABL Facility. We are also pursuing similar arrangements in various locations.

As of December 31, 20082010, we had no other material off-balance sheet arrangements.

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks

During the pendency of the Chapter 11 cases and the Canadian proceedings, our primary sources of liquidity were cash flows from operations and borrowings made under our DIP credit agreement. In addition to the cash requirements necessary to fund ongoing operations, we incurred significant professional fees and other costs in connection with the Chapter 11 cases and the Canadian proceedings.

Cash Flows

Operating Activities:activities. Cash flowflows provided by operations was $136.5were $170.6 million in 2008,for the seven months ended December 31, 2010, which included $55.6includes $63.0 million of cash provided by changes in operating assets and liabilities. Cash flowflows used in operations were $75.4 million for the five months ended May 31, 2010, which were a result of an increase in our working capital requirements due to the significant increase in volumes and $37.2 million of interest payments on our prepetition debt obligations and DIP credit agreement. Cash flows provided by operations was $185.4were $130.0 million in 2007,for the twelve months ended December 31, 2009, which included $9.9$29.0 million of changes in operating assets and liabilities.

Investing Activities:activities.Cash used in investing activities was $73.9$51.8 million in 2008,for the seven months ended December 31, 2010, which primarily consisted of $92.1$54.4 million of capital spending, partially offset by gross proceeds from sale of $8.6assets and other of $2.6 million. Cash used in investing activities was $19.1 million from a sale-leaseback transaction and $4.8for the five months ended

May 31, 2010, which consisted of $22.9 million of capital spending offset by proceeds from the sale of fixed assets. This compared to $260.0assets and other of $3.9 million. Cash used in investing activities was $45.5 million in 2007,for the twelve months ended December 31, 2009, which was primarily consisted of acquisition cost of $158.7 million related to the acquisition of El Jarudo, MAPS, and MAP India, capital spending of $107.3 million, less $4.8 million received from a sale-leaseback transaction.spending. We anticipate that we will spend approximately $60.0 million to $70.0$100.0 million on capital expenditures in 2009.2011.

Financing Activities:activities.Net cash used in financing activities totaled $1.4 million for the seven months ended December 31, 2010, which consisted primarily of an increase in short term debt, partially offset by dividends paid on our 7% preferred stock and payments on long-term debt. Net cash used in financing activities totaled $112.6 million for the five months ended May 31, 2010, which primarily resulted from activities related to our emergence from bankruptcy. Payments for settlement on our prepetition debt, DIP credit agreement, debt issuance costs and backstop fees totaled $914.6 million. These payments were offset by cash proceeds from the rights offering conducted pursuant to our Plan of Reorganization of $355.0 million and our Senior Notes offering of $450.0 million. Net cash provided by financing activities totaled $14.1$166.1 million in 2008,for the twelve months ended December 31, 2009, which consisted primarily of debtor-in-possession financing, net of debt issuance cost of $154.4 million, a net increase of short-termshort term debt, partially offset by normal debt payments and repurchase of bonds as compared to net cash provided$10.0 million aggregate principle amount of our outstanding prepetition notes for $0.7 million.

Financing Arrangements—Before Emergence from Bankruptcy Proceedings

Prepetition debt obligations. As of August 3, 2009, the date of the filing of the Chapter 11 cases by financing activitiesthe Debtors, we had approximately $1.2 billion of $55.0outstanding indebtedness on a consolidated basis, of which $86.4 million in 2007. The 2007 cash provided by financing activities was primarily comprisedconsisted of proceeds from issuancedraws on a senior secured revolving credit facility, $527.0 million consisted of acquisition-related debtfive senior secured term loan facilities, $513.4 million consisted of $60.0our prepetition senior notes and our prepetition senior subordinated notes and $50.8 million proceeds from issuance of stock of $30.0 million and a net increase of short term debt of $6.2 million, partially offset by normal debt repayments and voluntary prepayments on our term loans of $37.6 million and $3.1 millionconsisted of debt issuance costs.

Since the consummationon account of other credit facilities, capital leases for affiliates, swaps and other miscellaneous obligations. As a result of the 2004 Acquisition, we have been significantly leveraged. Asfiling of December 31, 2008, we have $1,144.1 million outstanding in aggregate indebtedness, with an additional $30.1 millionthe Chapter 11 cases, the loan commitments of borrowing capacity availablethe lenders under ourthe prepetition credit agreement were terminated (including the availability under the revolving credit facilities (after giving effectfacility, including with respect to outstanding borrowings of $60.9 million and $24.0 million of standby letters of credit). During and all principal and accrued and unpaid interest outstanding under the first quarterprepetition credit agreement, our prepetition senior notes and our prepetition senior subordinated notes accelerated and became due and payable, subject to an automatic stay of any action to collect, assert or recover a claim against us as a result of the commencement of the Chapter 11 proceedings and applicable bankruptcy law. Effective August 3, 2009, we have drawn substantially all of the revolving credit facilities balance that was availableceased recording interest expense on outstanding prepetition debt instruments classified as of December 31, 2008. Our future liquidity requirements will likely be significant, primarily dueliabilities subject to debt service obligations. Future debt service obligations may include required prepayments from annual excess cash flows, as defined, under ourcompromise.

Prepetition senior credit agreement commencing with the year ended December 31, 2009, which would be due 5 days after the filing of the Form 10-K, or in connection with specific transactions, such as certain asset sales and the incurrence of debt not permitted under the senior credit agreement.

On December 24, 2008, the Company unwound one of the interest rate swaps which resulted in a cash settlement on January 2, 2009 of $9.9 million including accrued interest of $0.4 million to the counterparty that required, per the ISDA (“International Swap Dealers Association, Inc.”) that covered the swap contract, to terminate the swap upon the Company’s credit rating falling below B3.

Senior Credit Facilities.. In connection with the 2004 Acquisition, Cooper-Standard Holdings Inc.,we, Cooper-Standard Automotive Inc. (“CSA U.S.”), and Cooper-Standard AutomotiveCSA Canada Limited entered into a Credit Agreementcredit agreement with various lending institutions, Deutsche Bank Trust Company Americas, as administrative agent, Lehman Commercial Paper Inc., as syndication agent, and Goldman Sachs Credit Partners, L.P., UBS Securities LLC and The Bank of Nova Scotia, as co- documentationco-documentation agents (with subsequent amendments thereto, and with related agreements, the “Senior Credit Facilities”“prepetition credit agreement”). The Senior Credit Facilities consist of, which provided for revolving credit facilities and term loan facilities.

Our revolving credit facilities provideprovided for loans in a total principal amount of up to $125.0 million with a maturity of December 2010. Lehman Commercial Paper, Inc. (LCPI) had a $10.0 million commitment to the Company as part of our $125.0 million revolving credit facility. Recently LCPI filed for bankruptcy protection and the revolver availability was effectively reduced by their position, therefore the revolving credit facility currently provides for borrowing up to $115.0 million. The Company is seeking to have this commitment replaced by another financial institution.

The Senior Credit Facilities includeterm loan facilities included a Term Loan A facility of the Canadian dollar equivalent of $51.3 million with a maturity of December 2010, a Term Loan B facility of $115.0 million with a maturity of December 2011 and a Term Loan C facility of $185.0 million with a maturity of December 2011. TheThese term loans were used to fund the 2004 Acquisition. To finance, in part, the acquisition of fifteen fluid handling systems operations in North America, Europe and China from ITT Industries, Inc. and the MAPS acquisition, we also established and borrowed under two new term loan tranches, with an aggregate of $190.0 million borrowed in U.S. dollars and €64.725 million borrowed in euros. As described belowof August 3, 2009, the Company also hasdate of the commencement of the Chapter 11 proceedings, approximately $613.4 million of principal and accrued and unpaid interest was outstanding under the prepetition credit agreement, of which $86.4 million consisted of draws on the revolving credit facilities and $527.0 million consisted of five term loan facilities.

As a Term Loan Dresult of the filing of the Chapter 11 cases, the loan commitments of the lenders under the prepetition credit agreement were terminated and Term Loan Eall principal and accrued and unpaid interest outstanding under the prepetition credit agreement accelerated and became due and payable, subject to an automatic stay under applicable bankruptcy law.

Upon our emergence from bankruptcy, the prepetition credit agreement was cancelled and terminated, including all agreements relating thereto, except to the extent necessary to allow the Debtors, reorganized Debtors or the administrative agent, as applicable, to make distributions pursuant to our Plan of Reorganization on account of claims related to such prepetition credit agreement and to perform certain other administrative duties thereunder.

Prepetition senior notes and prepetition senior subordinated notes. In connection with the 2004 Acquisition, CSA U.S. issued $200.0 million aggregate principal amount of our prepetition senior notes, and $350.0 million aggregate principal amount of our prepetition senior subordinated notes. As a result of the filing of the Chapter 11 cases, all principal and accrued and unpaid interest outstanding under our prepetition senior notes and our prepetition senior subordinated notes accelerated and became due and payable, subject to an automatic stay under applicable bankruptcy law.

Upon our emergence from bankruptcy, our prepetition senior notes and our prepetition senior subordinated notes were cancelled and the indentures governing such obligations were terminated, except to the extent necessary to allow the Debtors, reorganized Debtors or the relevant trustee, as applicable, to make distributions pursuant to our Plan of Reorganization on account of claims related to such notes and perform certain other administrative duties or exercise certain protective rights thereunder.

DIP financing. In connection with the commencement of the Chapter 11 cases and the Canadian proceedings, we and certain of our subsidiaries entered into a Debtor-In-Possession Credit Agreement, dated August 5, 2009 (the “initial DIP credit agreement”) with various lenders party thereto. On December 2, 2009, Metzeler Automotive Profile Systems GmbH, a German limited liability company, became an additional borrower under our initial DIP credit agreement. Under our initial DIP credit agreement, we borrowed an aggregate of $175.0 million principal amount of superpriority senior secured term loans in order to finance our operating, working capital and other general corporate needs (including the payment of fees and expenses in accordance with the orders of the Bankruptcy Court and the Canadian Court authorizing such borrowings).

In order to refinance our initial DIP credit agreement on terms more favorable to us, we and certain of our subsidiaries entered into the DIP credit agreement on December 18, 2009 with various lenders party thereto, which provided for superpriority senior secured term loans in an aggregate principal amount of up to $175.0 million, subject to certain conditions, and an uncommitted $25.0 million incremental facility.

Following the entry of a final order by the Bankruptcy Court approving our DIP credit agreement, on December 29, 2009, we borrowed $175.0 million under our DIP credit agreement. All of the proceeds of the borrowings under our DIP credit agreement, together with our cash on hand, were used to repay all borrowings and amounts outstanding under our initial DIP credit agreement, and to pay related fees and expenses. We prepaid $25.0 million of the borrowings under our DIP credit agreement on each of January 29, 2010, March 26, 2010, April 20, 2010 and May 18, 2010. In addition, we repaid $0.2 million on March 31, 2010. The remaining balance was repaid upon our emergence from bankruptcy, at which time our DIP credit agreement was cancelled and terminated, including all agreements related thereto.

Financing Arrangements—After Emergence from Bankruptcy Proceedings

As part of itsour Plan of Reorganization, we issued $450.0 million of our Senior Credit Facilities.Notes and entered into our $125.0 million Senior ABL Facility. Proceeds from our Senior Notes offering, together with proceeds of the rights offering and cash on hand, were used to pay claims under the prepetition credit agreement, our DIP credit

Theagreement and the portion of the prepetition senior notes payable in cash, in full, together with related fees and expenses. Upon our emergence from bankruptcy, we had $479.3 million of outstanding indebtedness, consisting of $450.0 million of our Senior Notes and $29.3 million in other debt of certain of our foreign subsidiaries. We intend to fund our ongoing capital and working capital requirements through a combination of cash flows from operations and borrowings under our Senior ABL Facility. We anticipate that funds generated by operations and funds available under our Senior ABL Facility will be sufficient to meet working capital requirements for the next 12 months. Our Senior Notes and Senior ABL Facility are described below. For additional information, see Note 8. “Debt” to the consolidated financial statements.

Based on our current and anticipated levels of operations and the condition in our markets and industry, we believe that our cash on hand, cash flow from operations and availability under our Senior ABL Facility will enable us to meet our working capital, capital expenditures, debt service and other funding requirements for the foreseeable future. However, our ability to fund our working capital needs, debt payments and other obligations, and to comply with the financial covenants, including borrowing base limitations, under our Senior ABL Facility, depends on our future operating performance and cash flow and many factors outside of our control, including the costs of raw materials, the state of the overall automotive industry and financial and economic conditions and other factors. Any future acquisitions, joint ventures or other similar transactions will likely require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms, if at all.

Senior ABL Facility

On the date of our emergence from bankruptcy, Cooper-Standard Holdings Inc. (“Parent”), CSA U.S. (the “Issuer” or the “U.S. Borrower”), CSA Canada (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers”), and certain subsidiaries of the U.S. Borrower entered into the Senior Credit Facilities denominatedABL Facility, with certain lenders, Bank of America, N.A., as agent (the “Agent”) for such lenders, Deutsche Bank Trust Company Americas, as syndication agent, and Banc of America Securities LLC, Deutsche Bank Securities Inc., UBS Securities LLC and Barclays Capital, as joint lead arrangers and bookrunners. A summary of our Senior ABL Facility is set forth below. This description is qualified in US dollarsits entirety by reference to the credit agreement governing our Senior ABL Facility.

General. Our Senior ABL Facility provides for an aggregate revolving loan availability of up to $125.0 million, subject to borrowing base availability, including a $45.0 million letter of credit sub-facility and a $20.0 million swing line sub-facility. Our Senior ABL Facility also provides for an uncommitted $25.0 million incremental loan facility, for a potential total Senior ABL Facility of $150.0 million (if requested by the Borrowers and agreed to by the lenders). No consent of any lender (other than those participating in the increase) is required to effect any such increase.

Maturity. Any borrowings under our Senior ABL Facility will mature, and the commitments of the lenders under our Senior ABL Facility will terminate, on May 27, 2014.

Borrowing base. Loan (and letter of credit) availability under our Senior ABL Facility is subject to a borrowing base, which at any time is limited to the lesser of: (A) the maximum facility amount (subject to certain adjustments) and (B) (i) up to 85% of eligible accounts receivable; plus (ii) up to the lesser of 70% of eligible inventory or 85% of the appraised net orderly liquidation value of eligible inventory; minus reserves established by the Agent. The accounts receivable portion of the borrowing base is subject to certain formulaic limitations (including concentration limits). The inventory portion of the borrowing base is limited to eligible inventory, as determined by an independent appraisal. The borrowing base is also subject to certain reserves, which are established by the Agent (which may include changes to the advance rates indicated above). Loan availability under our Senior ABL Facility is apportioned, as follows: $100.0 million to the U.S. Borrower and $25.0 million to the Canadian Borrower.

Guarantees; security. The obligations of the U.S. Borrower under our Senior ABL Facility and cash management arrangements and interest rate, foreign currency or commodity swaps entered into by us, in each case with the lenders and their affiliates, or, collectively, additional ABL secured obligations, are guaranteed on a senior secured basis by Parent and all of Parent’s wholly-owned U.S. subsidiaries (other than CS Automotive LLC), and the obligations of the Canadian Borrower under our Senior ABL Facility and additional ABL secured obligations of the Canadian Borrower and its Canadian subsidiaries are guaranteed on a senior secured basis by Parent, all of the Canadian subsidiaries of the Canadian Borrower and all of Parent’s wholly-owned U.S. subsidiaries. The U.S. Borrower guarantees the additional ABL secured obligations of its subsidiaries and the Canadian Borrower guarantees the additional ABL secured obligations of its Canadian subsidiaries. The obligations under our Senior ABL Facility and related guarantees are secured by a first priority lien on all of each Borrower’s and each guarantor’s existing and future personal property consisting of accounts receivable, payment intangibles, inventory, documents, instruments, chattel paper and investment property, certain money, deposit accounts, securities accounts, letters of credit, commercial tort claims and certain related assets and proceeds of the foregoing.

Interest. Borrowings under our Senior ABL Facility bear interest at a rate equal to, at the Borrowers’ option:

in the case of borrowings by the U.S. Borrower, LIBOR or the base rate plus, in each case, an applicable margin plus, at ourmargin; or

in the case of borrowings by the Canadian Borrower’s option, as applicable, either (a) a baseBorrower, bankers’ acceptance (“BA”) rate, determined by reference to the higher of (1) the prime rate of Deutsche Bank Trust Company Americas (or another bank of recognized standing reasonably selected by Deutsche Bank Trust Company Americas) and (2) the federal funds rate plus 0.5% or (b) LIBOR rate determined by reference to the costs of funds for deposits in US dollars for the interest period relevant to such borrowing adjusted for certain additional costs. Borrowings under the Senior Credit Facilities denominated in Canadian dollars bear interest at a rate equal to an applicable margin plus, at the Canadian Borrower’s option, either (a) an adjusted Canadian prime rate determined by referenceor Canadian base rate plus, in each case, an applicable margin.

The applicable margin may vary between 3.25% and 3.75% with respect to the higher of (1) theLIBOR or BA-based borrowings and between 2.25% and 2.75% with respect to base rate, Canadian prime rate of Deutsche Bank AG, Canada Branch for commercial loans madeand Canadian base rate borrowings. The applicable margin is subject, in Canada in Canadian dollars and (2) the average rate per annum for Canadian dollar bankers’ acceptances having a term of 30 days that appears of Reuters Screen CDOR Page plus 0.75% or (b) bankers’ acceptances rate determined by referenceeach case, to the average discount rate on bankers’ acceptances as quoted on Reuters Screen CDOR Page or as quoted by certain Canadian reference lenders.

In addition to paying interest on outstanding principal under the Senior Credit Facilities, we are required to pay a commitment fee to the lenders under the revolving credit facilities in respect of the unutilized commitments thereunder at a rate equal to 0.50% per annum. We also pay customary letter of credit fees.

The Term Loan B facility and the Term Loan C facility amortize each year in an amount equal to 1% per annum in equal quarterly installments for the first six years and nine months, with the remaining amount payable on the date that is seven years from the date of the closing of the Senior Credit Facilities. During 2007 we made voluntary prepayments totaling $15.0 million on the Term Loan B facility and $7.0 million on the Term Loan C facility. The Term Loan A facility amortizes in equal quarterly installments of C$1.538 million in 2005 and 2006, C$2.308 million in 2007 and 2008, and C$3.846 million in 2009 and 2010.

On February 6, 2006, in conjunction with the closing of the FHS acquisition, we amended our Senior Credit Facilities and closed on Term Loan D with a notional amount of $215.0 million. The amount of the additional term loan waspricing adjustments based on the purchase price of the acquisition and anticipated transaction costs. Term Loan D matures on December 23, 2011 and carries terms and conditions similar to those found in the remainder of our Term B and C Facilities. Term Loan D was structured as two tranches, $190.0 million borrowed in U.S. dollars, and €20.7 million borrowed in Euros. The financing was split between currencies to take into consideration the value of the European assets acquired in the FHS transaction.

On July 26, 2007, the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”). The Second Amendment permitted the MAPS acquisition and allows the Company to borrow up to €65.0 million through an incremental term loan under the Credit Agreement (as amended) to provide a portion of the funding necessary for the MAPS Acquisition and to pay related fees and expenses. The Second Amendment also expands the dual currency borrowing sub limit under the Revolving Credit Agreement to $35.0 million and adds Cooper-Standard International Holdings BV as a permitted borrower under this sub limit. The Second Amendment includes other changes which increase the Company’s financial and operating flexibility, including amended financial covenants, expanded debt and investment baskets, and the ability to include the results of our non-consolidated joint ventures in the covenant calculations, among other things.

To finance part of the MAPS acquisition the Company borrowed €44.0 million under the Second Amendment discussed above. This borrowing was combined with the Euro tranche of the Term Loan D to create Term Loan E and as of December 31, 2007 had an outstanding balance of €64.1 million. The Company also borrowed $10.0 million under the Primary Revolving Credit Agreement, which was repaid in its entirety by September 30, 2007. In addition the Company borrowed €15.0 million under the dual-currency sub limit of the revolver, which was repaid in its entirety as of December 31, 2007.

On December 18, 2008, the Company entered into a Third Amendment to the Credit Agreement (the “Third Amendment”). The Third Amendment provides that the Company and/or its Canadian subsidiary may

voluntarily prepay up to a maximum of $150.0 million of one or more tranches of its term loan debt under the Credit Agreement held by participating lenders at a discount price to par to be determined pursuant to certain auction procedures. The prepayments may be financed with cash of the Company and its Subsidiaries if they meet, on a consolidated basis, certain conditions set forth in the Third Amendment including a $125.0 million minimum liquidity requirement (which amount includes cash and cash equivalents and any amounts available to be drawn under the Credit Agreement’s revolving credit facility). Such prepayments may not be made from the proceeds of loans drawn under the Credit Agreement’s revolving credit facility. The prepayments may also be financed with the proceeds of certain equity contributions from holders of equity of the Company. Under the terms of the Third Amendment, any such prepayments will reduce the amount of term loans outstanding and payable in indirect order of maturity.

The Senior Credit Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability, and the ability of our subsidiaries, to sell assets; incur additional indebtedness or issue preferred stock; repay other indebtedness (including the notes); pay certain dividends and distributions or repurchase our capital stock; create liens on assets; make investments, loans, or advances; make certain acquisitions; engage in mergers or consolidations; enter into sale and leaseback transactions; engage in certain transactions with affiliates; amend certain material agreements governing our indebtedness, including the exchange notes; and change the business conducted by us and our subsidiaries

Senior Notes and Senior Subordinated Notes

Our outstanding 7% Senior Notes due 2012 (the “Senior Notes”) were issued under an Indenture, dated December 23, 2004 (the “Senior Indenture”). Our 8 3/8% Senior Subordinated Notes (the “Senior Subordinated Notes”) were also issued under an Indenture, dated December 23, 2004 (the “Subordinated Indenture” and, together with the Senior Indenture, the “Indentures”). During 2006 we repurchased $19.5 million notional amount of our Senior Subordinated Notes for $14.9 million. During 2008 we repurchased $7.2 million notional amount of our Senior Subordinated notes for $5.3 million.

Interest on the Senior Notes accrues at the rate of 7% per annum and is payable semiannually in arrears on June 15 and December 15, commencing on June 15, 2005. The Company makes each interest payment to the holders of record of the Senior Notes onusage over the immediately preceding June 1quarter.

Covenants; events of default. Our Senior ABL Facility includes affirmative and December 1.

Interestnegative covenants that will impose substantial restrictions on the Senior Subordinated Notes accrues at the rate of 8 3/8% per annumour financial and is payable semiannually in arrears on June 15 and December 15, commencing on June 15, 2005. The Company makes each interest payment to the holders of record of the Senior Subordinated Notes on the immediately preceding June 1 and December 1.

The indebtedness evidenced by the Senior Notes (a) is unsecured senior indebtedness of the Company, (b) rankspari passu in right of payment with all existing and future senior indebtedness of the Company, and (c) is senior in right of payment to all existing and future Subordinated Obligations (as used in respect of the Senior Notes) of the Company. The Senior Notes are also effectively subordinated to all secured indebtedness and other liabilities (including trade payables) of the Company to the extent of the value of the assets securing such indebtedness, and to all indebtedness of its Subsidiaries (other than the subsidiaries that guarantee the Senior Notes).

The Indebtedness evidenced by the Senior Subordinated Notes is unsecured senior subordinated indebtedness of the Company, is subordinated in right of payment, as set forth in the Subordinated Indenture, to the prior payment in full in cash or temporary cash investments when due of all existing and future senior indebtedness of the Company,business operations, including the Company’s obligations under the Senior Notes and the Credit Agreement, rankspari passu in right of payment with all existing and future senior subordinated indebtedness of the Company, and is senior in right of payment to all existing and future Subordinated Obligations (as used in respect of the Senior Subordinated Notes) of the Company. The Senior Subordinated Notes are also effectively subordinated to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness, and to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (other than the subsidiaries that guarantee the Senior Subordinated Notes).

Under each Indenture, upon the occurrence of any “change of control” (as defined in each Indenture), unless the Company has exercised its right to redeem all of the outstanding Notes of each holder of Notes of the applicable series shall have the right to require that the Company repurchase such noteholder’s Notes of such series at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of the applicable Noteholders of record on the relevant record date to receive interest due on the relevant interest payment date). The change of control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company and, thus, the removal of incumbent management.

The Credit Agreement provides that the occurrence of certain change of control events with respect to us would constitute a default thereunder. The Company, its directors, officers, employees or affiliates may, from time-to-time, purchase or sell Senior Notes or Senior Subordinated Notes on the open market, subject to limits as specified in the Credit Agreement and, with respect to purchases of Senior Subordinated Notes, limits in the Senior Indenture.

The Indentures limit our (and most or all of our subsidiaries’) ability to:

incur additional indebtedness;

pay dividends on or make other distributions or repurchase our capital stock;

make certain investments;

enter into certain types of transactions with affiliates;

use assets as security in other transactions; and

sell certain assets or merge with or into other companies.

Subject to certain exceptions, the Indentures permit us and our restricted subsidiaries to incur additional indebtedness, including secured indebtedness.

Our compliance with certain of the covenants contained in the Indentures and in our Credit Agreement is determined based on financial ratios that are derived using our reported EBITDA, as adjusted for certain items described in those agreements. We refer to EBITDA as adjusted under the Credit Agreement as “Consolidated EBITDA”. The Credit Agreement provides, among other covenants, for a maximum “Senior Secured Leverage Ratio” as of specified dates, which means the ratio of the Company’s total senior secured indebtedness on such date, as defined in the agreement, to the Company’s Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date. The breach of such covenants in our Credit Agreement could result in a default thereunder and the lenders could elect to declare all amounts borrowed due and payable. Any such acceleration would also result in a default under the Indentures. Additionally, under our Credit Agreement and Indentures, our ability to engage in activities such as incurring additional indebtedness, makingincur and secure debt, make investments, and payingsell assets, pay dividends is limited, with exceptions that are either partially tied to similar financial ratios (in the case of the Indentures) or are based on negotiated carveouts and baskets (in the case of the Credit Agreement).

We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Consolidated EBITDA is appropriate to provide additional information to investors to demonstrate compliance with our financing covenants. However, EBITDA and Consolidated EBITDA are not recognized terms under GAAP and do not purport to be alternatives to net income as a measure of operating performance. Additionally, EBITDA and Consolidated EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments, debt service requirements, and capital expenditures. Because not all companies use identical calculations, these presentations of EBITDA and Consolidated EBITDA may not be comparable to similarly titled measures of other companies.

The following table reconciles net income to EBITDA and pro forma Consolidated EBITDA under the Credit Agreement (dollars in millions):

   Year Ended
December 31,
2006
  Year Ended
December 31,
2007
  Year Ended
December 31,
2008
 

Net loss

  $(8.4) $(151.0) $(121.5)

Provision for income tax expense (benefit)

   (7.2)  32.9   29.3 

Interest expense, net of interest income

   87.1   89.6   92.9 

Depreciation and amortization

   138.4   136.0   140.1 
             

EBITDA

  $209.9  $107.5  $140.8 

Restructuring(1)

   23.9   26.4   30.6 

Foreign exchange (gain) loss(2)

   (2.9)  (0.1)  0.1 

Inventory write-up(3)

   2.1   2.5   —   

Transition and integration costs(4)

   1.4   1.5   0.5 

Product remediation(5)

   2.9   —     —   

Net gain on bond repurchase(6)

   (4.1)  —     (1.7)

Canadian voluntary retirement

   —     —     1.8 

Claim reserve(7)

   1.8   —     (0.6)

Impairment charges(8)

   13.2   146.4   36.0 

Other

   —     1.5   2.7 
             
   248.2   285.7   210.2 

Pro forma adjustments related to FHS(9)

   4.4   —     —   

Pro forma adjustments related to El Jarudo(10)

   —     1.7   —   

Pro forma adjustments related to MAPS(11)

   —     34.2   —   

Pro forma adjustments related to MAP India(12)

   —     2.7   —   

EBITDA adjustment related to other joint ventures(13)

   —     8.0   11.1 

Pro forma adjustments related to product line organization discontinuance(14)

   —     —     19.4 
             

Consolidated EBITDA

  $252.6  $332.3  $240.7 
             

(1)Includes non-cash restructuring charges.
(2)Unrealized foreign exchange (gain) loss on acquisition-related indebtedness.
(3)Write-ups of inventory to fair value at the dates of the 2004 Acquisition, acquisition of FHS, and acquisition of MAPS.
(4)Transition and integration costs related to the acquisition of FHS in 2006 and MAPS & El Jarudo in 2007 and MAPS and MAP India in 2008.
(5)Product rework and associated costs.
(6)Net gain on purchase of Senior Subordinated Notes in 2006 and 2008 of $19.5 million and $7.2 million, respectively.
(7)2006 Reserve reflecting the Company’s best estimate of probable liability in connection with U.S. Bankruptcy Court claim filed by a customer to recover payments made by the customer to the Company allegedly constituting recoverable “preference” payments. 2008 reflects reduction in estimated liability to settlement amount.
(8)2006-Impairment charges related to NVH goodwill ($7.5 million) and developed technology ($5.8 million). 2007-Impairment charges related to Fluid goodwill ($142.9) and certain intangibles ($3.5). 2008-Impairment charges related to Fluid goodwill ($21.9 million), certain intangibles ($2.3 million) and fixed assets ($4.1 million), related to Body & Chassis goodwill ($1.2 million), certain intangibles ($1.6 million) and fixed assets ($2.3 million) and Guyoung impairment ($2.6 million).

(9)Pro forma adjustments to FHS’s reported EBITDA for the period from January 1, 2006 to February 6, 2006. Our credit agreement provides for Pro Forma retroactive adjustments for permitted acquisitions in this calculation.
(10)Pro forma adjustments to El Jarudo’s reported EBITDA for the period from January 1, 2007 to March 31, 2007.
(11)Pro forma adjustments to MAPS reported EBITDA for the period from January 1, 2007 to August 31, 2007.
(12)Pro forma adjustments to MAP India reported EBITDA for the period from January 1, 2007 to December 27, 2007.
(13)The Company’s share of EBITDA in its joint ventures, net of equity earnings.
(14)Pro forma adjustments to the Company’s EBITDA for the initial phase of the Company’s discontinuance of its global product line operating divisions and the establishment of a new operating structure organized on the basis of geographic regions.

make acquisitions. Our Senior Secured Leverage Ratio for the four quarters ended December 31, 2008 as comparedABL Facility also includes a requirement to the minimum Senior Secured Leverage Ratio provided for in the Credit Agreement, was as follows:

Leverage Ratio at
December 31,
2008
Covenant
Thresholds

Senior Credit Facilities

Senior Secured Debt to Consolidated EBITDAmaintain a monthly fixed charge coverage ratio

2.13 to 1.0£ 3.0 to 1.0

In addition, under the terms of our Credit Agreement, we are requiredno less than 1.1 to repay a portion of our indebtedness1.0 when availability under our Senior Credit Facilities by a certain percentage, based on our leverage ratio,ABL Facility is less than specified levels. Our Senior ABL Facility also contains various events of our excess cash flow commencing with the year ended December 31, 2008. As of December 31, 2008, we did not have to make any additional mandatory repayment.

As discussed in part 1, Item 1A “Risk Factors”, theredefault that are several risks and uncertainties related to the global economy and our industry that could materially impact our liquidity. Among potential outcomes, these risks and uncertainties could result in decreased operating results, limited access to credit and failure to comply with debt covenants.

During the second half of 2008, production volumes decreased significantly resulting in a decline in sales, operating income and EBITDA. This decline in operating results reduced cushion that existed within our restrictive financial covenants and increased the risk of a future debt covenant violation. As previously noted the future compliance of debt covenants will be dependent upon, amongst other matters, future vehicle production and our ability to implement the costs savings initiatives announced during the second half of 2008 and the first quarter of 2009.customary for comparable facilities.

Our current revenue forecast for 20092011 is determined from specific platform volume projections consistent with a North American and European light vehicle production estimate of 9.312.9 million units and 16.718.6 million units, respectively. ChangesAdverse changes to the total level of light vehicle production levels could have a negative impact on our future sales, liquidity, results of operations and ability to comply with our debt covenants.covenants under our Senior ABL Facility or any future financing arrangements we enter into. We have takentook significant actions during the second half of 2008 and first quarter of 2009 to reduce our cost base and improve profitability. Based on our current 2009 operating forecast and the impact of our cost reductions on our 2009 forecasted debt covenant calculation, we expect to comply with all debt covenants during 2009. While we believe the vehicle production and other assumptions within our forecast are reasonable, we have also considered the possibility of even weaker demand based primarily on a further decline in North American light vehicle production (to approximately 8 million units).demand. In addition to the potential impact of

light vehicle production changes on our sales, achieving our EBITDA forecastcurrent operating performance and 2009 debt covenant thresholdsfuture compliance with the covenants under our Senior ABL Facility or any future financing arrangements we enter into are dependent upon a number of other external and internal factors, such as changes in raw material costs, changes in foreign currency rates, our ability to execute our cost savings initiatives, and our ability to implement and achieve the savings expected by the changechanges in our operating structure.structure and other factors beyond our control.

We8 1/2% Senior Notes due 2018

On May 11, 2010, CSA Escrow Corporation (the “escrow issuer”), an indirect wholly-owned non-Debtor subsidiary of the Issuer closed an offering of $450.0 million aggregate principal amount of its Senior Notes. The

Senior Notes were issued in a private placement exempt from registration under the Securities Act. A summary description of the Senior Notes is set forth below. This description is qualified in its entirety by reference to the Senior Notes indenture.

General. The Senior Notes were issued pursuant to an indenture dated May 11, 2010 by and between the escrow issuer and the trustee thereunder. On the effective date of our Plan of Reorganization, the escrow issuer was merged with and into the Issuer, with the Issuer as the surviving entity, and upon the consummation of the merger, the Issuer assumed the obligations under the Senior Notes and the Senior Notes indenture and the guarantees by the guarantors described below became effective.

Guarantees. The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by Parent and all of the Issuer’s wholly-owned domestic restricted subsidiaries (collectively, the “guarantors” and, together with the Issuer, the “obligors”). If the Issuer or any of its domestic restricted subsidiaries acquires or creates another wholly-owned domestic restricted subsidiary that guarantees certain debt of the Issuer or a guarantor, such newly acquired or created subsidiary is also required to guarantee the Senior Notes.

Ranking. The Senior Notes and each guarantee constitute senior debt of the Issuer and each guarantor, respectively. The Senior Notes and each guarantee (1) rank equally in right of payment with all of the applicable obligor’s existing and future senior debt, (2) rank senior in right of payment to all of the applicable obligor’s existing and future subordinated debt, (3) are effectively subordinated in right of payment to all of the applicable obligor’s existing and future secured indebtedness and secured obligations to the extent of the value of the collateral securing such indebtedness and obligations and (4) are structurally subordinated to all existing and future indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries (other than indebtedness and liabilities owed to the Issuer or one of the guarantors).

Optional redemption. The Issuer has the right to redeem the Senior Notes at the redemption prices set forth below:

on and after May 1, 2014, all or a portion of the Senior Notes may be redeemed at a redemption price of 104.250% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2014, 102.125% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2015, and 100% of the principal amount thereof if redeemed on or after May 1, 2016, in each case plus any accrued and unpaid interest to the redemption date;

prior to May 1, 2013, up to 35% of the Senior Notes issued under the Senior Notes indenture may be redeemed with the proceeds from certain equity offerings at a redemption price of 108.50% of the principal amount thereof, plus any accrued and unpaid interest to the redemption date; and

prior to May 1, 2014, all or a portion of the Senior Notes may be redeemed at a price equal to 100% of the principal amount thereof plus a make-whole premium.

Change of control. If a change of control occurs with respect to Parent or the Issuer, unless the Issuer has exercised its right to redeem all of the outstanding Senior Notes, each noteholder shall have also considered the potential consequencesright to require that the Issuer repurchase such noteholder’s Senior Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the right of the noteholders of record on the relevant record date to receive interest due on the relevant interest payment date.

Covenants. The Senior Notes indenture limits, among other things, the ability of the Issuer and its restricted subsidiaries, (currently, all majority owned subsidiaries) to pay dividends or make distributions, repurchase equity, prepay subordinated debt or make certain investments, incur additional debt or issue certain disqualified stock or preferred stock, sell assets, incur liens, enter into transactions with affiliates and allow to exist certain restrictions on the ability of a bankruptcy filingrestricted subsidiary to pay dividends or to make other payments or loans to or

transfer assets to the Issuer; in each case, subject to certain exclusions and other customary exceptions. The Senior Notes indenture also limits the ability of onethe Issuer, Parent and a subsidiary guarantor to merge or consolidate with another entity or sell all or substantially all of our major North American customers and believe that a bankruptcy filing would not materially impact our 2009 forecast and our ability to meet 2009 debt covenants.its assets. In the event of a bankruptcy filing, we believe it is likely that most of our programs would be continued and any reduction in program volume of a bankrupt customer would be replaced with volume from other existing customers. As such, we expect the adverse effectsaddition, certain of these bankruptcies wouldcovenants will not be limited principallyapplicable during any period of time when the Senior Notes have an investment grade rating. The Senior Notes indenture contains customary events of default.

The Senior Notes were initially issued in a private placement which was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to recovering less than the fullterms of the registration rights agreement between the issuer, the guarantors and the initial purchasers of the Senior Notes, we consummated a registered exchange offer in February 2011, pursuant to which we exchanged all $450.0 million principal amount of the outstanding receivables. We believeprivately placed Senior Notes, or “old notes,” for $450.0 million principal amount of new 8  1/2% Senior Notes due 2018, or “exchange notes.” The exchange notes were issued under the same indenture as the old notes and are identical to the old notes, except that a loss or expenses incurred the new notes have been registered under the Securities Act. References herein to the “Senior Notes” refer to the old notes prior to the consummation of the exchange offer and to the exchange notes thereafter.

Non-GAAP Financial Measures

In evaluating our business, management considers EBITDA and Adjusted EBITDA as key indicators of our operating performance. Our management also uses EBITDA and Adjusted EBITDA:

because similar measures are utilized in the calculation of the financial covenants and ratios contained in our financing arrangements;

in developing our internal budgets and forecasts;

as a resultsignificant factor in evaluating our management for compensation purposes;

in evaluating potential acquisitions;

in comparing our current operating results with corresponding historical periods and with the operational performance of a customer bankruptcy would be treatedother companies in our industry; and

in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as an adjustmentis used by management in their assessments of performance and in forecasting and budgeting for our 2009 debt covenantscompany.

In addition, we believe EBITDA and doAdjusted EBITDA and similar measures are widely used by investors, securities analysts and other interested parties in evaluating our performance. We define Adjusted EBITDA as net income (loss) plus provision for income tax expense (benefit), interest expense, net of interest income, depreciation and amortization or EBITDA, as adjusted for items that management does not believe the trade receivable exposure would have a significant impact on our 2009 liquidity.

While we are confidentconsider to be reflective of our abilitycore operating performance. These adjustments include restructuring costs, impairment charges, non-cash fair value adjustments, acquisition related costs, professional fees and expenses associated with our reorganization, non-cash stock based compensation and non-cash gains and losses from certain foreign currency transactions and translation.

We calculate EBITDA and Adjusted EBITDA by adjusting net income (loss) to achieveeliminate the plan, there can be no assurance we will be successful. There areimpact of a number of factors that could potentially arise that could result in a violationitems we do not consider indicative of our debt covenants. Non-compliance with covenants would provide our lenders the abilityongoing operating performance. You are encouraged to demand immediate repayment of all outstanding borrowings under the Term Facilityevaluate each adjustment and the Revolving Facility. We wouldreasons we consider it appropriate for supplemental analysis. EBITDA and Adjusted EBITDA are not have sufficientfinancial measurements recognized under U.S. generally accepted accounting principles (“U.S. GAAP”), and when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash on hand to satisfy this demand. Accordingly, the inability to comply with covenants, obtain waivers for non-compliance, cureflow from operating activities as a potential violation with the supportmeasure of our shareholders,liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and

they should not be considered in isolation or obtain alternative financing would have a material adverse effect onas substitutes for analysis of our financial position, results of operations and cash flows. In the event we were unable to meet our debt requirements, however, we believe we would be able to cure the violation utilizing the equity cure right provision of our primary credit facility, obtain a waiver or amend the covenants. Executing the equity cure right provision is contingent upon our shareholders. Obtaining waivers or amendments would likely result in a significant incremental cost. Although we cannot provide assurance that we would be successful in obtaining the necessary waivers or in amending the covenants, we were able to do so in previous years and are confident that we would be able to do so in 2009, if necessary.as reported under U.S. GAAP. These limitations include:

Based on our current forecast and our assessment of reasonably possible scenarios, including the more pessimistic scenarios related to production volumes described above, we

they do not believereflect our cash expenditures or future requirements for capital expenditure or contractual commitments;

they do not reflect changes in, or cash requirements for, our working capital needs;

they do not reflect interest expense or cash requirements necessary to service interest or principal payments under our Senior Notes and Senior ABL Facility;

they do not reflect certain tax payments that there is substantial doubt aboutmay represent a reduction in cash available to us;

although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and

other companies, including companies in our ability to continueindustry, may calculate these measures differently and, as the number of differences in the way companies calculate these measures increases, the degree of their usefulness as a going concerncomparative measure correspondingly decreases.

In addition, in 2009.evaluating Adjusted EBITDA, it should be noted that in the future we may incur expenses similar to the adjustments in the below presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA to net income, which is the most directly comparable financial measure in accordance with U.S. GAAP (dollars in millions):

   Predecessor  Successor 
   Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 

Net income

  $636.3   $40.6  

Provision for income tax expense

   39.9    5.1  

Interest expense, net of interest income

   44.5    25.0  

Depreciation and amortization

   35.7    66.7  
         

EBITDA

  $756.4   $137.4  

Reorganization and fresh-start accounting adjustments(1)

   (660.0  —    

Restructuring(2)

   5.9    0.5  

Foreign exchange gains/losses(3)

   17.2    (0.1

Inventory write-up(4)

   —      8.1  

Stock-based compensation(5)

   0.2    6.4  

Severance(6)

   —      5.8  

Other

   0.3    (1.6
         

Adjusted EBITDA

  $120.0   $156.5  
         

(1)Reorganization and bankruptcy-related expenses, including professional fees.
(2)Includes non-cash restructuring.
(3)Foreign exchange gains and losses on prepetition debt and various intercompany loans.
(4)Reversal of fresh-start fair value inventory adjustment.
(5)Non-cash stock amortization expense and non-cash stock option expense.
(6)Severance costs associated with the right sizing of our German facilities.

Working capital

Historically, we have not generally experienced difficulties in collecting our accounts receivable, but the dynamics associated with the recent economic downturn hashave impacted both the amount of our receivables and the stressed ability for our customers to pay within normal terms. Certain government sponsored programs may ease thethese constraints, but pressure on accounts receivable will continue until vehicle sales and production volumes stabilize. As of December 31, 2008,2010, we havehad net cash of $111.5$294.5 million. Our additional borrowing capacity through use of our senior credit facilities with our bank group and other bank lines is $30.1 million (after giving effect to outstanding borrowings of $60.9 million and $24.0 million of standby letters of credit), of which the majority was drawn during the first quarter of 2009.

Available cash and contractual commitmentsContractual Obligations

The following table summarizes our contractual cash obligations at December 31, 2008. Our contractual cash obligations consist of legal commitments requiring us to make fixed or determinable cash payments, regardless of the contractual requirements of the vendor to provide future goods or services. Except as otherwise disclosed, this table does not include information on our recurring purchase of materials for use in production asbecause our raw materials purchase contracts typically do not meet this definition because they do not require fixed or minimum quantities.

The following table summarizes the total amounts due as of December 31, 2010 under all debt agreements, commitments and other contractual obligations.

  Payment due by period  Payment due by period 
Contractual Obligations  Total  Less than
1 year
  1-3 Years  3-5 years  More than
5 Years
  Total   Less than
1 year
   1-3 Years   3-5 years   More than
5 Years
 
  (dollars in millions)  (dollars in millions) 

Debt obligations

  $1,114.3  $78.6  $512.3  $200.0  $323.4  $450.0    $—      $—      $—      $450.0  

Interest on debt obligations(1)

   313.1   75.0   142.8   68.2   27.1   286.9     38.3     76.5     76.5     95.6  

Capital lease obligations

   1.5   1.1   0.4   —     —  

Operating lease obligations

   83.3   18.0   22.6   15.8   26.9   80.6     19.1     26.3     17.9     17.3  

Other obligations(2)

   41.0   27.1   13.9   —     —  

Other obligations(1)

   65.8     58.9     6.0     0.6     0.3  
                                   

Total

  $1,553.2  $199.8  $692.0  $284.0  $377.4  $883.3    $116.3    $108.8    $95.0    $563.2  
                                   

 

(1)Interest on $590.9 million of variable rate debt is calculated based on LIBOR rate and Canadian Dollar Bankers Acceptance Rate as of December 31, 2008.
(2)Noncancellable purchase order commitments for capital expenditures, & other borrowings.borrowings and capital lease obligations.

In addition to our contractual obligations and commitments set forth in the table above, the Company haswe have employment arrangements with certain key executives that provide for continuity of management. These arrangements include payments of multiples of annual salary, certain incentives, and continuation of benefits upon the occurrence of specified events in a manner that is believed to be consistent with comparable companies.

We also have minimum funding requirements with respect to our pension obligations. We expect to make cash contributions of approximately $16.0$31.9 million to our domestic and foreign pension plan asset portfolios in 2009.2011. Our minimum funding requirements after 20092011 will depend on several factors, including the investment performance of our retirement plans and prevailing interest rates. Our funding obligations may also be affected by changes in applicable legal requirements. We also have payments due with respect to our postretirement benefit obligations. We do not prefund our postretirement benefit obligations. Rather, payments are made as costs are incurred by covered retirees. We expect other postretirement benefit net payments to be approximately $3.5$3.3 million in 2009.2011.

We may be required to make significant cash outlays due to our unrecognized tax benefits. However, due to the uncertainty of the timing of future cash flows associated with our unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, unrecognized tax benefits of $5.2$2.8 million as of December 31, 2008,2010 have been excluded from the contractual obligations table above. For further information related to unrecognized tax benefits, see Note 11,11. “Income taxes”,Taxes” to the consolidated financial statements.

Excluded

In addition, excluded from the contractual obligation table are open purchase orders at December 31, 20082010 for raw materials and supplies used in the normal course of business, supply contracts with customers, distribution agreements, joint venture agreements and other contracts without express funding requirements.

Raw Materials and Manufactured Components

The principal raw materials for our business include fabricated metal-based components, oil based components, synthetic rubber, carbon black, natural rubber, process oil and natural rubber.plastic components. We manage the procurement of our raw materials to assure supply and to obtain the most favorable pricing. For natural rubber, procurement is managed by buying in advance of production requirements and by buying in the spot market. For other principal materials, procurement arrangements include short-term supply agreements that may contain formula-based pricing based on commodity indices. These arrangements provide quantities needed to satisfy normal manufacturing demands.

We believe we have adequate sources for the supply of raw materials and components for our products with suppliers located around the world. We often use offshore suppliers for machined components, metal stampings, castings and other labor-intensive, economically freighted products.

Extreme fluctuations in material pricing have occurred in recent years adding challenges in forecasting.forecasting supply costs. The inability to recover higher than anticipated pricesmaterial costs from our customers maywould impact our profitability.

Seasonal Trends

Sales to automotive customers are lowest during the months prior to model changeovers and during assembly plant shutdowns. These typically result in lower sales volumes during July, August, and December. However, economic conditions can change normal seasonality trends, causing lowerresulting in reduced demand throughout the year. The impact of model changeovers and plant shutdowns is considerably less in years of lowerreduced demand overall.

Restructuring

2005 Initiatives

In 2005,We continually evaluate alternatives in an effort to align our business with the Company implemented a restructuring strategychanging needs of our customers and announcedlower the closure of two manufacturing facilities in the United States and the decision to exit certain businesses within and outside the U.S. Bothoperating costs of the Company. This may include the realignment of our existing manufacturing capacity, facility closures are substantially complete as of December 31, 2008, but the Company will continue to incur costs until the facilities are sold.

During the year ended December 31, 2008, the Company recorded total costs of $3.8 million relatedor similar actions. See Note 5. “Restructuring” to the previously announced U.S. closures and workforce reductions in Europe. These costs consisted of severance, asset impairment, and other exit costs of $0.3 million, $2.1 million and $1.4 million, respectively. In addition the Company received $0.2 million for assets that were previously written off. The initiative is substantially complete as of December 31, 2008 at an estimated total cost of approximately $27.0 million. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $775  $542  $—    $1,317 

Expense incurred

   295   1,437   2,063   3,795 

Cash payments

   (997)  (1,729)  165   (2,561)

Utilization of reserve

   —     —     (2,228)  (2,228)
                 

Balance at December 31, 2008

  $73  $250  $—    $323 
                 

2006 Initiatives

In May 2006, the Company implemented a restructuring action and announced the closure of a manufacturing facility located in Canada and the transfer of related production to other facilities in North America. The closure was completed during 2008 at a total cost of $3.8 million. During the year ended December 31, 2008, the Company reversed $9 thousand of severance costs.

European Initiatives

In 2006, the Company implemented a European restructuring initiative, which addressed the operations of our non-strategic facilities. The initiative includes the closure of a manufacturing facility, terminations, and the transfer of production to other facilities in Europe and North America. The initiative is substantially complete as of December 31, 2008 at an estimated total cost of approximately $22.0 million ($20.1 million incurred in 2006 and 2007). The Company recorded severance, other exit costs and asset impairments of $1.1 million, $0.6 million and $0.1 million, respectively, during the year ended December 31, 2008. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $1,442  $—    $—    $1,442 

Expense incurred

   1,076   619   127   1,822 

Cash payments

   (1,776)  (619)  —     (2,395)

Utilization of reserve

   —     —     (127)  (127)
                 

Balance at December 31, 2008

  $742  $—    $—    $742 
                 

FHS Acquisition Initiatives

In connection with the acquisition of the automotive fluid handling systems business of ITT Industries, Inc. (“FHS”), the Company formalized a restructuring plan to address the redundant positions created by the consolidation of the businesses. In connection with this restructuring plan, the Company announced the closure of several manufacturing facilities located in North America, Europe, and Asia and the transfer of related production to other facilities. The closures are substantially complete as of December 31, 2008 at an estimated total cost of approximately $20.2 million, including costs recorded through purchase accounting. As a result of this initiative, the Company recorded certain severance and other exit costs of $11.8 million and $0.7 million, respectively, through purchase accounting in 2006. The Company recorded severance, other exit costs and asset impairments of $0.8 million, $2.3 million and $0.6 million, respectively. The Company also reversed $2.1 million of severance costs that were recorded through purchase accounting in 2006. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $6,450  $4,210  $—    $10,660 

Expense incurred

   843   2,258   613   3,714 

Cash payments and accrual reversals

   (5,998)  (5,978)  —     (11,976)

Utilization of reserve

   —     —     (613)  (613)
                 

Balance at December 31, 2008

  $1,295  $490  $—    $1,785 
                 

2007 Initiatives

In May 2007, the Company implemented a restructuring action and announced the closure of a manufacturing facility located in Mexico and the transfer of related production to other facilities in North America. The closure was substantially completed in 2007. The estimated total cost of this closure is approximately $3.4 million. The Company will continue to incur costs until the facility is sold. During the year ended December 31, 2008 the Company recognized other exit costs and asset impairments of $0.5 million and $1.9 million, respectively, related to this initiative. During the year ended December 31, 2008, the Company reversed $5 thousand of severance costs.

2008 Initiatives

In July 2008, the Company implemented a restructuring action and announced the closure of two manufacturing facilities, one located in Australia and the other in Germany. Both closures are a result of changes in market demands and volume reductions and are expected to be completed in 2009. The estimated total cost of this initiative is approximately $18.5 million. The Company recorded severance, other exit costs and asset impairments of $14.5 million, $0.1 million and $3.3 million, respectively, during the year ended December 31, 2008. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $—    $—    $—    $—   

Expense incurred

   14,455   149   3,282   17,886 

Cash payments

   (995)  (149)  —     (1,144)

Utilization of reserve

   —     —     (3,282)  (3,282)
                 

Balance at December 31, 2008

  $13,460  $—    $—    $13,460 
                 

Initial Global Reorganization Initiative

During 2008, the Company commenced the initial phase of a global reorganization in North America and Europe. In connection with this phase, the Company reduced its workforce. The estimated total cost of this initial phase is approximately $7.7 million. During the year ended December 31, 2008, the Company recorded severance costs of $7.7 million associated with this initiative. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $—    $ —    $—    $—   

Expense incurred

   7,670   —     —     7,670 

Cash payments

   (3,741)  —     —     (3,741)

Utilization of reserve

   —     —     —     —   
                 

Balance at December 31, 2008

  $3,929  $ —    $—    $3,929 
                 

In 2008, the Company initiated the closing of a European facility and the idling of a Canadian facility. During the year ended December 31, 2008, the Company recorded other exit costs and asset impairments of $0.2 million and $0.9 million, respectively.

Purchase Accounting

Acquisition of MAPS

The acquisition of MAPS was accounted for under the purchase method of accounting, in accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 141, “Business Combinations” (“SFAS 141”). Accordingly, the assets purchased and liabilities assumed wereconsolidated financial statements included in the Company’s consolidated balance sheet as of December 31, 2008. The operating results of the MAPS entities were included in the consolidated results of operations from the date of acquisition. The following summarizes the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition.

Cash and cash equivalents

  $10,237

Accounts receivable, net

   118,216

Inventories, net

   33,415

Prepaid expenses

   7,995

Property, plant, and equipment, net

   126,058

Investments

   16,531

Other assets

   32,874
    

Total assets acquired

   345,326
    

Accounts payable

   66,211

Short-term notes payable

   22,039

Payroll liabilities

   28,806

Accrued liabilities

   14,821

Long-term debt

   14,556

Pension benefits

   37,839

Other long-term liabilities

   16,676
    

Total liabilities assumed

   200,948
    

Net assets acquired

  $144,378
    

Cash and cash equivalents, accounts receivable, other current assets, accounts payable, and other current liabilities were stated at historical carrying values which management believes approximates fair value given the short-term nature of these assets and liabilities. Inventories were recorded at fair value which is estimated for finished goods and work-in-process based upon the expected selling price less costs to complete, selling, and disposal costs, and a normal profit to the buyer. Raw material inventory was recorded at carrying value as such value approximates the replacement cost. Tooling in process, which is included in other assets, was recorded at fair value which is based upon expected selling price less costs to complete. The Company’s pension obligations have been recorded in the allocation of purchase price at the projected benefit obligation. Deferred income taxes have been provided in the consolidated balance sheet basedthis Annual Report on the Company’s estimates of the tax versus book basis of the assets acquired and liabilities assumed, adjusted to estimated fair values. Management has estimated the fair value of property, plant, and equipment, intangibles and other long-lived assets based upon financial estimates and projections prepared in conjunction with the transaction. The value assigned to all assets and liabilities assumed exceeded the acquisition price. Accordingly, an adjustment to reduce the value of long-lived assets was recorded in accordance with SFAS No. 141 and no goodwill was recorded related to this transaction as of December 31, 2008.Form 10-K.

Critical Accounting Policies and Estimates

Our accounting policies are more fully described in Note 2,2. “Significant Accounting Policies,” to the combinedconsolidated financial statements. Application of these accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experience and on other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies, the following may involve a higher degree of judgment or estimation than other accounting policies.

Adoption of Fresh-Start Accounting. We emerged from Chapter 11 bankruptcy proceedings on May 27, 2010. As a result, we adopted fresh-start accounting as (i) the reorganization value of the Predecessor’s assets immediately prior to the confirmation of the Plan of Reorganization was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the Predecessor’s existing voting shares immediately prior to

the confirmation of the Plan of Reorganization received less than 50% of the voting shares of the emerging entity. GAAP requires the adoption of fresh-start accounting as of the Plan of Reorganization’s confirmation date, or as of a later date when all material conditions precedent to the Plan of Reorganization becoming effective are resolved, which occurred on May 27, 2010. We elected to adopt fresh-start accounting as of May 31, 2010 to coincide with the timing of our normal May accounting period close. There were no transactions that occurred from May 28, 2010 through May 31, 2010, that would materially impact our consolidated financial position, results of operations or cash flows for the 2010 Successor or 2010 Predecessor periods.

Fresh-start accounting results in a new basis of accounting and reflects the allocation of our estimated fair value to our underlying assets and liabilities. Our estimates of fair value are inherently subject to significant uncertainties and contingencies beyond our reasonable control. Accordingly, there can be no assurance that the estimates, assumptions, valuations, appraisals and financial projections will be realized, and actual results could vary materially.

Our reorganization value was allocated to our assets in conformity with the procedures specified by ASC 805, “Business Combinations.” The excess of reorganization value over the fair value of tangible and identifiable intangible assets was recorded as goodwill. Liabilities existing as of the effective date of the Plan of Reorganization, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes were determined in conformity with applicable income tax accounting standards. Predecessor accumulated depreciation, accumulated amortization, retained deficit, common stock and accumulated other comprehensive loss were eliminated.

For further information on fresh-start accounting, see Note 4. “Fresh-Start Accounting” to the consolidated financial statements included in this Annual Report on Form 10-K.

Reorganization. As a result of filing for Chapter 11 bankruptcy, we adopted ASC 852 on August 3, 2009. ASC 852 is applicable to companies in Chapter 11 and generally does not change the manner in which financial statements are prepared. However, among other disclosures, it does require that the financial statements for periods subsequent to the filing of the Chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Revenues, expenses, realized gains and losses and provisions for losses that can be directly associated with the reorganization and restructuring of the business must be reported separately as reorganization items in the statements of operations. The balance sheet must distinguish prepetition liabilities subject to compromise from both those prepetition liabilities that are not subject to compromise and from post-petition liabilities. Liabilities that may be affected by a plan of reorganization must be reported at the amounts expected to be allowed, even if they may be settled for lesser amounts. In addition, reorganization items must be disclosed separately in the statement of cash flows. We have segregated those items as outlined above for all reporting periods subsequent to such date.

Pre-Production Costs Related to Long Term Supply Arrangements. Costs for molds, dies, and other tools owned by us to produce products under long-term supply arrangements are recorded at cost in property,

plant, and equipment and amortized over the lesser of three years or the term of the related supply agreement. The amount capitalized was $8.8We expense all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer.

Goodwill. As of December 31, 2009 and 2010, we had recorded goodwill of approximately $87.7 million and $10.9$137.0 million, at December 31, 2007 and 2008, respectively. Costs incurred during the engineering and design phase of customer-owned tooling projects are expensed as incurred unless a contractual arrangement for reimbursement by the customer exists. Reimbursable tooling costs included in other assets was $8.9 million and $3.8 million at December 31, 2007 and 2008, respectively. Development costs for tools owned by the customer that meet EITF 99-5 requirement areGoodwill recorded in accounts receivable in the accompanying combined balance sheets if considered a receivable in the next twelve months. At December 31, 2007 and 2008, $73.6 million and $77.8 million, respectively, was included in accounts receivable for customer-owned tooling of which $39.0 million and $32.8 million, respectively, was not yet invoiced to the customer.

Goodwill. In connection with the 2004 Acquisition and other acquisitions since 2004 as described in Note 3, we have applied the provisions of SFAS No. 141,Business Combination. Goodwill, which represents the excess of cost over the fair value of the net assets of the businesses acquired, was approximately $290.6 million and $245.0 million as of December 31, 2007 and 2008, respectively.

2010 reflects the adoption of fresh-start accounting, See Note 4. “Fresh-Start Accounting” to the consolidated financial statements. Goodwill is not amortized but is tested annually for impairment. The Company evaluatesWe evaluate each reporting unit’s fair value versus its carrying value annually or more frequently if events or changes in circumstances indicate that the carrying value may exceed the fair value of the reporting unit. Estimated fair values are based on the cash flows projected in the reporting units’ strategic plans and long-range planning forecasts discounted at a risk-adjusted rate of return. We assess the reasonableness of these estimated fair values using market based multiples of comparable companies.

If the carrying value exceeds the fair value, an impairment loss is measured and recognized. Goodwill fair value measurements are classified within Level 3 of the fair value hierarchy, which are generally determined using unobservable inputs. We conduct our annual goodwill impairment as of October 1st of each year.

Our 2010 annual goodwill impairment analysis, completed as of the first day of the fourth quarter, resulted in no impairment. The fair value of our Europe, South America and Asia Pacific reporting units did not substantially exceed their corresponding carrying amount. We emerged from Chapter 11 on May 27, 2010 and our reporting units were fair valued at that time, therefore we would not expect the fair values of the reporting units to substantially exceed their corresponding carrying amounts. If different assumptions were used in our cash flow projections the fair values could be different and impairment of goodwill might be required to be recorded.

During the second quarter of 2009, several events occurred that indicated potential impairment of our goodwill. Such events included: (a) the Chapter 11 bankruptcy of both Chrysler and GM and unplanned plant shut-downs by both GM and Chrysler; (b) continued product volume risk and negative product mix changes; (c) commencement of negotiations with our sponsors, senior secured lenders, and bondholders to recapitalize our long term debt and equity; (d) recognition as the second quarter progressed that there was an increasing likelihood that we would breach our financial covenants under our prepetition credit agreement; and (e) our decision to defer our June 15, 2009 interest payment on our prepetition senior and senior subordinated notes pending the outcome of our quarterly financial results; (f) an analysis of whether we would meet our financial covenants for the past quarter and (g) negotiations with various constituencies. As a result of the combination of the above factors, we significantly reduced our projections in the second quarter.

Other significant assumptions used in the discounted cash flow model include discount rate, terminal value growth rate, future capital expenditures and changes in future working capital requirements. These assumptions were not modified significantly as part of the 2009 interim goodwill impairment assessment. The significant decrease in the financial projections resulted in an enterprise value significantly lower than the amount computed in connection with the 2008 annual impairment assessment. This significant decrease in enterprise value resulted in the carrying value of assets at all of our reporting units being greater than the related reporting units’ fair value. As a result, we recorded goodwill impairment charges of $93.6 million in our North America reporting unit, $39.6 million in our Europe reporting unit, $22.6 million in our South America reporting unit and $1.4 million in our Asia Pacific reporting unit during the second quarter of 2009. While we believe our estimates of fair value are reasonable based upon current information and assumptions about future results, changes in our businesses, the markets for our products, the economic environment and numerous other factors could significantly alter our fair value estimates and result in future impairment of recorded goodwill. We are subject to financial statement riskgoodwill in the event that goodwill becomes impaired. If the carrying value exceeds the fair value, an impairment loss is measuredour North America and recognized. The Company conducts its annual impairment testing as of October 1st of each year.

During 2008, our International Fluid and Body & Chassis reporting units experienced operating results that were below our previous expectations, primarily as a result of a recent and projected decline in vehicle production volumes, a change in the production mix for certain key platforms, the tightening credit market, price concessions to customers and the general overall health of the economy. Due to these factors, the calculated fair values of our International Fluid and Body & Chassis reporting units were less than their book values. As a result we recorded goodwill impairment charges of $21.9 million and $1.2 million, respectively, to these reporting units. If the weighted average cost of capital utilized in the estimate of fair value was increased by 100 basis points there would still not be impairment for any other reporting units.segments.

Long-lived assetsLong-Lived Assets. We monitor our long-lived assets for impairment indicators on an ongoing basis in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.ASC Topic 360, “Property, Plant, and Equipment.” If impairment indicators exist, we perform the required analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived assets. Fair value is estimated based upon either discounted cash flow analyses or estimated salvage values. Cash flows are estimated using internal budgets based on recent sales data, independent automotive production volume estimates and customer commitments, as well as assumptions related to discount rates. Change in economic or operating conditions impacting these estimates and assumptions could result in the impairment of long-lived assets.

As a result of our testing performed in 2009 in accordance with SFAS No. 144ASC 360, we recorded asset and definite lived intangible asset impairment charges of $6.4$3.8 million and $3.9$202.4 million, respectively. Of the $6.4$3.8 million of asset impairment charges, $4.1$1.1 million was recorded in our North America Fluid reporting unitsegment and $2.3$2.7 million was recorded in our Body & Chassis International reporting unit.segment. Of the $3.9$202.4 million of definite lived intangible asset impairment charges, $2.3$148.1 million was recorded in our North America Fluid reporting unitsegment and $1.6$54.3 million was recorded in our Body & Chassis Americas reporting unit.International segment.

In connection with the adoption of fresh-start accounting an adjustment of $40.7 million was made to re-measure our property, plant, and equipment to their estimated fair value. See Note 4. “Fresh-Start Accounting,” to the consolidated financial statements.

Restructuring-Related Reserves.Reserves. Specific accruals have been recorded in connection with restructuring our businesses,initiatives, as well as the integration of acquired businesses. These accruals include estimates principally related to employee separation costs, the closure and/or consolidation of facilities, contractual obligations, and the valuation of certain assets. Actual amounts recognized could differ from the original estimates.

Restructuring-related reserves are reviewed on a quarterly basis and changes to plans are appropriately recognized when identified. Changes to plans associated with the restructuring of existing businesses are generally recognized as employee separation and plant phaseout costs in the period the change occurs. Under EITF 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination,” changes to plans associated with the integration of an acquired business are recognized as an adjustment to the acquired business’ original purchase price (goodwill) if recorded within one year of the acquisition. After one year, a reduction of goodwill is recorded if the actual costs incurred are less than the original reserve. More than one year subsequent to an acquisition, if the actual costs incurred exceed the original reserve, the excess is recognized in current year operations as an employee separation and plant phaseout cost. For additional discussion, please refer to Note 45. “Restructuring” to the Consolidated Financial Statements.consolidated financial statements.

Revenue Recognition and Sales Commitments.Commitments. We generally enter into agreements with our customers to produce products at the beginning of a vehicle’s life. Although such agreements do not generally provide for minimum quantities, once we enter into such agreements, fulfillment of our customers’ purchasing requirements can be our obligation for an extended period or the entire production life of the vehicle. These agreements generally may be terminated by our customer at any time. Historically, terminations of these agreements have been minimal. In certain limited instances, we may be committed under existing agreements to supply products to our customers at selling prices which are not sufficient to cover the direct cost to produce such products. In such situations, we recognize losses as they are incurred.

We receive blanket purchase orders from many of our customers on an annual basis. Generally, such purchase orders and related documents set forth the annual terms, including pricing, related to a particular vehicle model. Such purchase orders generally do not specify quantities. We recognize revenue based on the pricing terms included in our annual purchase orders as our products are shipped to our customers. As part of certain agreements, we are asked to provide our customers with annual cost reductions. We accrue for such amounts as a reduction of revenue as our products are shipped to our customers. In addition, we generally have ongoing adjustments to our pricing arrangements with our customers based on the related content and cost of our products. Such pricing accruals are adjusted as they are settled with our customers.

Amounts billed to customers related to shipping and handling are included in net sales in our consolidated statements of operations. Shipping and handling costs are included in cost of sales in our consolidated statements of operations.

Income Taxes.Taxes. In determining the provision for income taxes for financial statement purposes, we make estimates and judgments which affect our evaluation of the carrying value of our deferred tax assets as well as our calculation of certain tax liabilities. In accordance with SFAS No. 109,AccountingASC Topic 740, “Accounting for Income Taxes,, we evaluate the carrying value of our deferred tax assets on a quarterly basis. In completing this evaluation, we consider all available positive and negative evidence. Such evidence includes historical operating results, the existence of cumulative losses in the most recent fiscal years, expectations for future pretax operating income, the time period over which our temporary differences will reverse, and the implementation of feasible and prudent tax planning strategies. Deferred tax assets are reduced by a valuation allowance if, based on the weight of this evidence, it is more likely than not that all or a portion of the recorded deferred tax assets will not be realized in future periods.

During 2008,2010, due to our recent operating performance in the United States and current industry conditions, we continued to assess, based upon all available evidence, that it was more likely than not that we would not realize our U.S. deferred tax assets. During 2008,2010, our U.S. valuation allowance increaseddecreased by $66.9$53.5 million, primarily related to operating losses incurred in the United States and adjustmentsreduction of tax attributes to offset the minimum pension liability recorded through other comprehensive income.cancellation of debt income generated as part of the Chapter 11 bankruptcy.

At December 31, 2008,2010, deferred tax assets for net operating loss and tax credit carry-forwards of $179.9$152.8 million were reduced by a valuation allowance of $175.2$103.4 million. These deferred tax assets relate principally to net operating loss carry-forwards in the U.S and ourforeign subsidiaries in France, Italy, Germany, Brazil, China, Australia Germany, China and Spain. They also relate to Special Economic Zone Credits in Poland, U.S foreign tax credits research and development tax credits, state net operating losses, and state tax credits. Some of these can be utilized indefinitely, while others expire from 20092011 through 2028.2030. We intend to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. Effective January 1, 2009, with the adoption of SFAS No. 141 (R) the benefit of the reversal of the valuation allowances on pre-acquisition contingencies will be included as a component of income tax expense. Adjustments in post-acquisition valuation allowances will be offset to future tax provision.

In addition, the calculation of our tax benefits and liabilities includes uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. We recognize tax benefits and liabilities based on our estimate of whether, and the extent to which additional taxes will be due. We adjust these liabilities based on changing facts and circumstances; however, due to the complexity of some of these uncertainties and the impact of any tax audits, the ultimate resolutions may be materially different from our estimated liabilities. For further information, related to income taxes, see Note 1111. “Income Taxes” to the consolidated financial statements.

Pensions and postretirement benefits other than pensions.Postretirement Benefits Other Than Pensions. Included in our results of operations are significant pension and post-retirementpostretirement benefit costs, which are measured using actuarial valuations. Inherent in these valuations are key assumptions, including assumptions about discount rates and expected returns on plan assets. These assumptions are updated at the beginning of each fiscal year. We are required to consider current market conditions, including changes in interest rates, in making these assumptions. Changes in pension and post-retirementpostretirement benefit costs may occur in the future due to changes in these assumptions. Our net pension and post-retirementpostretirement benefit costs were approximately $15.2$1.7 million and $3.7$3.5 million, respectively, during 2008.for the seven months ended December 31, 2010 and $5.1 million and $1.0 million respectively, for the five months ended May 31, 2010.

To develop the discount rate for each plan, the expected cash flows underlying the plan’s benefit obligations were discounted using the December 31, 2008 Citigroup2010 Towers Watson RateLink Pension Discount CurveIndex to determine a single equivalent rate. To develop our expected return on plan assets, we considered historical long-term asset return experience, the expected investment portfolio mix of plan assets and an estimate of long-term investment returns. To develop our expected portfolio mix of plan assets, we considered the duration of the plan liabilities and gave more weight to equity positions, including both public and private equity investments, than to fixed-income securities. Holding all other assumptions constant, a 1% increase or decrease in the discount rate would have decreased or increased the fiscal 20092011 net pensionperiodic benefit cost expense by approximately $2.9$1.4 million and $2.5or $0.6 million, respectively. Likewise, a 1% increase or decrease in the expected return on plan assets would have decreased or increased the fiscal 20092011 net pensionperiodic benefit cost by approximately $2.1$2.7 million. Decreasing or increasing the discount rate by 1% would have increased or decreased the projected benefit obligations by approximately $47.7 million and $39.9or $57.4 million, respectively. Aggregate pension net periodic benefit cost is forecasted to be approximately $4.1 million in 2011.

The rate of increase in medical costs assumed for the next five years was held constant with prior years to reflect both actual experience and projected expectations. The health care cost trend rate assumption has a significant effect on the amounts reported. Only certain employees hired are eligible to participate in our company’s subsidized post-retirementpostretirement plan. A 1% change in the assumed health care cost trend rate would have increased or decreased the fiscal 20092011 service and interest cost components by $0.4$0.2 million, and $0.1 million, respectively, and the projected benefit obligations would have increased or decreased by $2.5$3.6 million and $2.1or $2.9 million, respectively. Aggregate other postretirement net periodic benefit cost is forecasted to be approximately $5.8 million in 2011.

The general funding policy is to contribute amounts deductible for U.S. federal income tax purposes or amounts required by local statute.

Derivative financial instruments.Financial Instruments. Derivative financial instruments are utilized by the Companyus to reduce foreign currency exchange and interest rate and commodity price risks. The Company hasrisk. We have established policies

and procedures for risk assessment

including the assessment of counterparty credit risk and the approval, reporting, and monitoring of derivative financial instrument activities. On the date the derivative is established, the Company designateswe designate the derivative as either a fair value hedge, a cash flow hedge, or a net investment hedge in accordance with its established policy. The Company doesWe do not enter into financial instruments for trading or speculative purposes.

By using derivative instruments to hedge exposures to changes in commodity prices and interest rates, the Company exposes itselfwe expose ourselves to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company,us, which creates credit risk for the Company.us. When the fair value of a derivative contract is negative, the Company oweswe owe the counterparty and the Company doeswe do not possess credit risk. To mitigate credit risk, it is the Company’sour policy to execute such instruments with creditworthy banks and not enter into derivatives for speculative purposes.

Use of Estimates.Estimates. The preparation of the consolidated financial statements in conformity with the accounting principles generally accepted in the United StatesU.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. During 2008,2010, there were no material changes in the methods or policies used to establish estimates and assumptions. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, unsettled pricing discussions with customers and suppliers, restructuring accruals, deferred tax asset valuation allowances and income taxes, pension and other post retirement benefit plan assumptions, accruals related to litigation, warranty and environmental remediation costs and self-insurance accruals. Actual results may differ from estimates provided.

Fair Value Measurements. We measure certain assets and liabilities at fair value on a non-recurring basis using unobservable inputs (Level 3 input based on the U.S. GAAP fair value hierarchy). For further information on these fair value measurements, see “—Goodwill,” “—Long-Lived Assets,” “—Restructuring-Related Reserves,” and “—Derivative Financial Instruments” above.

Recent Accounting Pronouncements

See Note 2. “Significant Accounting Policies,” to the consolidated financial statements.

 

Item 7A.Quantitative and Qualitative Disclosures About Market Risk

We are exposed to fluctuations in interest rates, and currency exchange rates.rates and commodity prices. Prior to filing our bankruptcy filing under Chapter 11we entered into derivative financial instruments to monitor our exposure to these risks, but as a result of the bankruptcy filing all but one of these instruments were dedesignated. We actively monitor our exposure to risk from changes in foreign currency exchange rates and interest rates through the use of derivative financial instruments in accordance with management’s guidelines. We do not enter into derivative instruments for trading purposes. See “ItemItem 7. Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Operations—Critical Accounting Policies – Policies—Derivative financial instruments”Financial Instruments” and “ItemItem 8. Financial“Financial Statements and Supplementary Data” (especiallyData,” especially Note 19).

As21. “Fair Value of December 31, 2008, we had $597.2 million of variable rate debt. A 1% increase in the average interest rate would increase future interest expense by approximately $4.2 million per year, after considering the effects of the interest rate swap contracts, which were used to manage cash flow fluctuations of certain variable rate debt due to changes in market interest rates. Interest rate swap contracts which fix the interest payments of certain variable rate debt instruments or fix the market rate component of anticipated fixed rate debt instruments are accounted for as cash flow hedges.

As of December 31, 2008, interest rate swap contracts representing $309.1 million of notional amount were outstanding with maturity dates of December, 2010 through September, 2013. The above amount includes $161.6 million of notional amount pertainingFinancial Instruments” to the swap of USD denominated debt fixed at 5.764% and $59.9 of notional fixed at 3.19%, $14.7 million pertaining to the Canadian dollar denominated debt fixed at 4.91% and $11.6 million of notional amount pertaining to EURO denominated debt fixed at 4.14%consolidated financial statements.

Foreign Currency Exchange Rate Risk. The above notional amount also includes $61.3 million of a USD denominated swap with a counterparty that no longer qualifies for cash flow hedge accounting due to the counterparty filing for bankruptcy protection. These contracts modify the variable rate characteristics of the Company’s variable rate debt instruments, which are generally set at three-month USD LIBOR rates, Canadian Dollar Bankers Acceptance Rates or six-month Euribor rates The remaining $61.3 million of notional is a pay float, receive 3.67% fixed swap to offset the effects of the swap that no longer qualifies for cash flow hedge accounting.

On September 15, 2008, a counterparty on one of the Company’s USD swaps filed for bankruptcy protection. The swap was de-designated as a cash flow hedge for accounting purposes. The de-designation of this hedge relationship resulted in the following actions:

As the underlying cash flow risk this swap was designed to hedge remains highly probable of occurring, the amount of net losses of $(4.4) million that were recorded in accumulated other comprehensive income (loss) pertaining to this will be amortized to interest expense over the remaining life of the anticipated hedge relationship which was to have terminated in December 2011.

Recognizing the change in fair market value of the swap from the last date the hedge was effective to September 30, 2008. This change in market value was a decrease in swap liability from $(4.4) million to $(3.9) million or a gain of $0.5 million.

On September 30, 2008 the Company executed a new off-setting swap to neutralize the future impact of changes in market value of the de-designated swap. The off-setting swap covers an identical notional amount of $61.3 million and uses the same 3-month LIBOR, and pays a fixed coupon of 3.67% until its maturity in December 2011. This swap will not be designated as a cash flow hedge under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and as a result will be marked to market similarly to the de-designated swap. This will serve to offset the earnings impact of the future changes in market value of the de-designated swap.

On November 12, 2008, the Company executed a new interest rate swap. This swap is designed to modify the variable rate characteristics of the debt instruments and is designated as a cash flow hedge for accounting purposes. This new swap with a pay fixed at 3.19% was put in place to cover the lost interest-rate-fluctuation shield caused by the de-designation discussed above.

On December 24, 2008, the Company unwound one of the interest rate swaps and made cash settlements of $9.9 million including accrued interest of $0.4 million to the counterparty that required, per the ISDA, that covered the swap contract, to terminate the swap upon the Company’s credit rating falling below B3.

Upon termination the swap was de-designated as a cash flow hedge for accounting purposes. The de-designation of this hedge relationship resulted in the following actions:

As the underlying cash flow risk this swap was designed to hedge remains highly probable of occurring, the amount of net losses of $(9.5) million that were recorded in accumulated other comprehensive income (loss) pertaining to this will be amortized to interest expense over the remaining life of the anticipated hedge relationship which was to have terminated in December 2011.

As of December 31, 2008, the $(21.0) million fair market value of the swaps was recorded in accrued liabilities $(15.4) million, and other long-term liabilities $(5.6) million. An amount $(20.3) million, net of taxes, was recorded as net losses in the accumulated other comprehensive income (loss). This amount includes $(13.3) million for the de-designated/terminated swaps as the balance remaining on the OCI pertaining to these swaps is to be amortized over the remaining life of the underlying debt until December 2011. The fair market value of all outstanding interest rate swap contracts is subject to change in value due to change in interest rates. During 2008 losses of $5.5 million were reclassified from accumulated other comprehensive income (loss) into earnings. The Company expects approximately $10.6 million of losses to be reclassified in 2009.

We also use forward foreign exchange contracts to reduce the effect of fluctuations in foreign exchange rates on Term Loan B, a U.S. dollar denominated obligation of our Canadian subsidiary, the portion of our Euro Term Loan Eforecasted material purchases and short-term, foreign currency denominated intercompany transactions. Gains and

losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce the earnings volatility resulting from fluctuations in foreign exchange rates. The currencies hedged by the Company under these arrangements are the Canadian Dollar, Euro and the Brazilian Real.operating expenses. As of December 31, 2008 the fair market value of these contracts was approximately $8.0 million.

We also use2010 there were no forward foreign exchange contracts outstanding.

In addition to hedgetransactional exposures, our operating results are impacted by the Mexican pesotranslation of our foreign operating income into U.S. dollars (“translation exposure”). In 2010, net sales outside of the United States accounted for 73% of our consolidated net sales, although certain non-U.S. sales are U.S. dollar denominated. We do not enter into foreign exchange contracts to mitigate this exposure.

Interest Rates. Prior to our bankruptcy filing under Chapter 11, our exposure to variable interest rates on outstanding variable rate debt instruments was partially managed by the use of interest rate swap contracts. These contracts converted certain variable rate debt obligations to fixed rate. These contracts were accounted for as cash flow hedges. At December 31, 2010 we had one interest rate swap contract outstanding with $6.6 million of notional amount pertaining to EURO denominated debt fixed at 4.14%.

Commodity Prices. We have commodity price risk with respect to purchases of certain raw materials, including natural gas and carbon black. Raw material, energy and commodity costs have been extremely volatile over the past several years. Prior to our bankruptcy filing under Chapter 11, we used derivative instruments to reduce the effect ofour exposure to fluctuations in foreign exchange rates on a portion of the forecasted operating expenses of our Mexican facilities.certain commodity prices. As of December 31, 2008, forward foreign exchange2010, there were no commodity contracts representing $45.7 million of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $(7.0) million. A 10% strengthening of the U.S. dollar relativeoutstanding. We will continue to the Mexican peso would result in a decrease of $2.8 millionevaluate, and may use, derivative financial instruments to manage our exposure to higher raw material, energy and commodity prices in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Mexican peso would result in an increase of $3.6 million in the fair market value of these contracts.

We also use forward foreign exchange contracts to hedge the U.S. dollar to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted material purchases of our Canadian facilities. As of December 31, 2008, forward foreign exchange contracts representing $26.8 million of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $3.4 million. A 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in an increase of $2.6 million in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Canadian dollar would result in a decrease of $2.6 million in the fair market value of these contracts.

We also use forward foreign exchange contracts to hedge the U.S. dollar to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted material purchases of our European facilities. As of December 31, 2008, forward foreign exchange contracts representing $14.7 million of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $0.3 million. A 10% strengthening of the U.S. dollar relative to the Euro would result in an increase of $1.6 million in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Euro would result in a decrease of $1.3 million in the fair market value of these contracts.

We also use forward foreign exchange contracts to hedge the Czech Koruna (CZK) to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted operating expenses of our European facilities. As of December 31, 2008, forward foreign exchange contracts representing $14.8 million of notional amount were outstanding with maturities of less than three months. The fair market value of these contracts was approximately $(1.0) million. A 10% strengthening of the Euro relative to the CZK would result in a decrease of $1.2 million in the fair market value of these contracts. A 10% weakening of the Euro relative to the CZK would result in an increase of $1.5 million in the fair market value of these contracts.

During 2008 gains of $2.2 million related to the Mexican, Canadian, Czech Republic and European forward foreign exchange contracts were reclassified from accumulated other comprehensive income (loss) into earnings. The amount to be reclassified in 2009 is expected to be approximately $(4.4) million.

We also have exposure to the prices of commodities in the procurement of certain raw materials. The primary purpose of our commodity price hedging activities is to manage the volatility associated with these forecasted purchases. The Company primarily utilizes forward contracts with maturities of less than 24 months. These instruments are intended to offset the effect of changes in commodity prices on forecasted inventory purchases. As of December 31, 2008, commodity contracts for natural gas and carbon black representing $11.7 million of notional amount were outstanding with a fair market value of approximately $(5.0) million. A 10% change in the equivalent commodity price would result in a change of $0.5 million in the fair market value of these contracts. During 2008 losses of $1.4 million were reclassified from accumulated other comprehensive income (loss) into earnings. The Company expects approximately $5.0 million of losses recorded in accumulated other comprehensive income (loss) to be reclassified into earnings during the year ended December 31, 2009.future.

Item 8.Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Annual Financial Statements

 

Report of Ernst & Young LLP, independent registered public accountantsIndependent Registered Public Accounting Firm

  5260

Report of Ernst  & Young LLP, Independent Registered Public Accounting Firm, Internal Control over Financial Reporting

61

Consolidated statements of operations for the years ended December  31, 2008 2007 and 20062009, the five months ended May 31, 2010 and the seven months ended December 31, 2010

  5362

Consolidated balance sheets as of December 31, 20082009 and December 31, 20072010

  5463

Consolidated statementstatements of changes in stockholders’ equity (deficit) for the years ended December  31, 2008 2007 and 20062009, the five months ended May 31, 2010 and the seven months ended December 31, 2010

  5564

Consolidated statements of cash flows for the years ended December  31, 2008 2007 and 20062009, the five months ended May 31, 2010 and the seven months ended December 31, 2010

  5665

Notes to Consolidatedconsolidated financial statements

  5766

Schedule II II—Valuation and Qualifying Accounts

  101122

Report of Independent Registered Public Accounting Firm

The Board of Directors and Management

Shareholders of Cooper-Standard Holdings Inc.

We have audited the accompanying consolidated balance sheets of Cooper-Standard Holdings Inc. and subsidiaries as of December 31, 20082010 (Successor) and 2007,December 31, 2009 (Predecessor), and the related consolidated statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the three years in the period from June 1, 2010 to December 31, 2010 (Successor), the period from January 1, 2010 to May 31, 2010, and the years ended December 31, 2008.2009 and 2008 (Predecessor). Our audits also included the financial statement schedule for the three years in the period ended December 31, 2008 included in Item 8. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,statements. An audit also includes assessing the accounting principles used and significant estimates made by management, andas well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cooper-Standard Holdings Inc. and subsidiaries atas of December 31, 20082010 (Successor) and 2007December 31, 2009 (Predecessor), and the related consolidated resultsstatements of their operations, changes in equity (deficit) and their cash flows for each of the three years in the period from June 1, 2010 to December 31, 2010 (Successor), the period from January 1, 2010 to May 31, 2010, and the years ended December 31, 2009 and 2008 (Predecessor), in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, for the three years in the period ended December 31, 2008, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Notes 1, 3 and 4 to the consolidated financial statements, on May 12, 2010, the United States Bankruptcy Court for the District of Delaware entered an order confirming the Plan of Reorganization, which became effective on May 27, 2010. Accordingly, the accompanying consolidated financial statements have been prepared in conformity with FASB Accounting Standards CodificationTM 852, “Reorganizations,” for the Successor as a new entity with assets, liabilities and a capital structure having carrying values that are not comparable to prior periods.

As discussed in Notes 9 and 10 respectively, to the consolidated financial statements, in 2008, and in 2007, the CompanyPredecessor changed its method of accounting for pension and other postretirement benefit plans.plans, respectively.

As discussedWe have also audited, in Note 11,accordance with the standards of the Public Company Accounting Oversight Board (United States), Cooper-Standard Holdings Inc.’s internal control over financial reporting as of December 31, 2010, based on criteria established in 2007Internal Control—Integrated Framework issued by the Company changed its methodCommittee of accounting for income taxes.Sponsoring Organizations of the Treadway Commission, and our report dated March 21, 2011, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

/s/ Ernst & Young LLP
Detroit, Michigan
March 27, 2009

Detroit, Michigan

March 21, 2011

Report of Independent Registered Public Accounting Firm on

Internal Control over Financial Reporting

The Board of Directors and Shareholders of Cooper-Standard Holdings Inc.

We have audited Cooper-Standard Holdings Inc.’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Cooper-Standard Holdings Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Management’s Annual Report on Internal Control Over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Cooper-Standard Holdings Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2010 consolidated financial statements of Cooper-Standard Holdings Inc., and our report dated March 21, 2011, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Detroit, Michigan

March 21, 2011

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar amounts in thousands)thousands except per share amounts)

 

  Predecessor  Successor 
  Year Ended
December 31,
2006
 Year Ended
December 31,
2007
 Year Ended
December 31,
2008
   Year Ended
December 31, 2008
 Year Ended
December 31, 2009
 Five Months
Ended
May  31, 2010
  Seven Months
Ended
December  31, 2010
 

Sales

  $2,164,262  $2,511,153  $2,594,577   $2,594,577   $1,945,259   $1,009,128   $1,405,019  

Cost of products sold

   1,832,027   2,114,039   2,260,063    2,260,063    1,678,953    832,201    1,172,350  
                       

Gross profit

   332,235   397,114   334,514    334,514    266,306    176,927    232,669  

Selling, administration, & engineering expenses

   199,739   222,134   231,709 

Selling, administration & engineering expenses

   231,709    199,552    92,166    159,573  

Amortization of intangibles

   31,025   31,850   30,996    30,996    14,976    319    8,982  

Impairment charges

   13,247   146,366   33,369    33,369    363,496    —      —    

Restructuring

   23,905   26,386   38,300    38,300    32,411    5,893    488  
                       

Operating profit (loss)

   64,319   (29,622)  140    140    (344,129  78,549    63,626  

Interest expense, net of interest income

   (87,147)  (89,577)  (92,894)   (92,894  (64,333  (44,505  (25,017

Equity earnings

   179   2,207   897    897    4,036    3,613    3,397  

Other income (expense)

   6,985   (1,055)  (299)

Reorganization items and fresh-start accounting adjustments, net

   —      (17,367  660,048    —    

Other income (expense), net

   (1,368  9,919    (21,156  4,214  
                       

Loss before income taxes

   (15,664)  (118,047)  (92,156)

Provision for income tax expense (benefit)

   (7,244)  32,946   29,295 

Income (loss) before income taxes

   (93,225  (411,874  676,549    46,220  

Provision (benefit) for income tax expense

   29,295    (55,686  39,940    5,095  
                       

Net loss

  $(8,420) $(150,993) $(121,451)

Consolidated net income (loss)

   (122,520  (356,188  636,609    41,125  

Add: Net (income) loss attributed to noncontrolling interests

   1,069    126    (322  (549
                       

Net income (loss) attributable to Cooper-Standard Holdings Inc.

  $(121,451 $(356,062 $636,287   $40,576  
             

Net income available to Cooper-Standard Holdings Inc. common stockholders

     $28,723  
       

Basic net income per share attributable to Cooper-Standard Holdings Inc.

     $1.64  
       

Diluted net income per share attributable to Cooper-Standard Holdings Inc.

     $1.55  
       

The accompanying notes are an integral part of these consolidated financial statements.

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

December 31, 20072009 and 20082010

(Dollar amounts in thousands)thousands except share amounts)

 

  Predecessor  Successor 
  December 31,
2007
 December 31,
2008
   December 31,
2009
  December 31,
2010
 

Assets

      

Current assets:

      

Cash and cash equivalents

  $40,877  $111,521   $380,254   $294,450  

Accounts receivable, net

   546,794   352,052    355,543    380,915  

Inventories, net

   155,321   116,952    111,575    122,043  

Prepaid expenses

   19,603   19,162    22,153    20,056  

Other

   9,940   23,867    76,454    40,857  
              

Total current assets

   772,535   623,554    945,979    858,321  

Property, plant, and equipment, net

   722,373   623,987 

Property, plant and equipment, net

   586,179    589,504  

Goodwill

   290,588   244,961    87,728    137,000  

Intangibles, net

   256,258   227,453    10,549    149,642  

Other assets

   120,501   98,296    106,972    119,309  
              
  $2,162,255  $1,818,251   $1,737,407   $1,853,776  
              
 

Liabilities and Stockholders’ Equity

   

Liabilities and Equity (Deficit)

   

Current liabilities:

      

Debt payable within one year

  $51,999  $94,136   $18,204   $19,965  

Debtor-in-possession financing

   175,000    —    

Accounts payable

   295,638   192,948    166,346    176,001  

Payroll liabilities

   103,161   69,601    71,523    98,722  

Accrued liabilities

   83,080   94,980    87,073    113,831  
              

Total current liabilities

   533,878   451,665    518,146    408,519  

Long-term debt

   1,088,162   1,049,959    11,059    456,758  

Pension benefits

   109,101   161,625    148,936    164,595  

Postretirement benefits other than pensions

   91,017   76,822    76,261    80,053  

Deferred tax liabilities

   28,331   28,265    7,875    18,337  

Other long-term liabilities

   43,208   34,738 

Stockholders’ equity:

   

Common stock, $0.01 par value, 4,000,000 shares authorized at December 31, 2007 and December 31, 2008, 3,483,600 and 3,479,100 shares issued and outstanding at December 31, 2007 and December 31, 2008, respectively

   35   35 

Other

   19,727    32,122  

Liabilities subject to compromise

   1,261,903    —    
 

7% Cumulative participating convertible preferred stock, $0.001 par value, 10,000,000 shares authorized at December 31, 2010, 1,052,444 shares issued and outstanding at December 31, 2010

   —      130,339  
 

Equity (deficit):

   

Predecessor common stock, $0.01 par value, 4,000,000 shares authorized at December 31, 2009, 3,482,612 shares issued and outstanding at December 31, 2009

   35    —    

Common stock, $0.001 par value, 190,000,000 shares authorized at December 31, 2010, 18,376,112 shares issued and outstanding at December 31, 2010

   —      17  

Additional paid-in capital

   354,874   354,894    356,316    478,706  

Accumulated deficit

   (155,339)  (280,216)

Accumulated retained earnings (deficit)

   (636,278  35,842  

Accumulated other comprehensive income (loss)

   68,988   (59,536)   (31,037  45,881  
              

Total stockholders’ equity

   268,558   15,177 

Total Cooper-Standard Holdings Inc. equity (deficit)

   (310,964  560,446  

Noncontrolling interests

   4,464    2,607  
              

Total equity (deficit)

   (306,500  563,053  
  $2,162,255  $1,818,251        

Total liabilities and equity (deficit)

  $1,737,407   $1,853,776  
              

The accompanying notes are an integral part of these consolidated financial statements.

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED STATEMENTSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Dollar amounts in thousands)thousands except share amounts)

 

  Common
Shares
 Common
Stock
  Additional
Paid-In
Capital
 Retained
Earnings
(Deficit)
 Accumulated
Other
Comprehensive
Income (Loss)
 Total   Common
Shares
 Common
Stock
 Additional
Paid-In
Capital
 Retained
Earnings
(Deficit)
 Accumulated
Other
Comprehensive
Income (Loss)
 Cooper-Standard
Holdings Inc.
Equity (Deficit)
 Non-Controlling
Interest
 Total
Equity  (Deficit)
 

Balance at December 31, 2005

  3,235,100  $32  $323,478  $4,269  $(15,549) $312,230 

Issuance of common stock

  3,000     300     300 

Net loss for 2006

       (8,420)   (8,420)

Other comprehensive income (loss):

        

Minimum pension liability, net of $3,870 tax effect

        (3,202)  (3,202)

Currency translation adjustment

        25,263   25,263 

Fair value change of derivatives, net of $3,319 tax effect

        (5,462)  (5,462)
          

Comprehensive income

         8,179 
                   

Balance at December 31, 2006

  3,238,100   32   323,778   (4,151)  1,050   320,709 

Adoption of Fin 48

       (195)   (195)

Issuance of common stock

  250,000   3   29,997     30,000 

Balance at December 31, 2007—Predecessor

   3,483,600   $35   $354,874   $(155,339 $68,988   $268,558   $8,243   $276,801  

Adoption of ASC 715, measurement change

      (3,426   (3,426   (3,426

Transaction with affiliate

         (1,741  (1,741

Dividends paid to noncontrolling interest

         (662  (662

Repurchase of common stock

  (4,500)    (450)    (450)   (4,500   (540    (540   (540

Stock-based compensation

      1,549     1,549      560      560     560  

Adoption of SFAS No. 158, net of ($1,020) tax effect

        25,846   25,846 

Net loss for 2007

       (150,993)   (150,993)

Other comprehensive income (loss):

        

Benefit plan liability, net of ($1,934) tax effect

        6,794   6,794 

Currency translation adjustment

        43,246   43,246 

Fair value change of derivatives, net of $19 tax effect

        (7,948)  (7,948)
          

Comprehensive loss

         (108,901)
                   

Balance at December 31, 2007

  3,483,600   35   354,874   (155,339)  68,988   268,558 

Adoption of SFAS No. 158, measurement change

       (3,426)   (3,426)

Repurchase of common stock

  (4,500)    (540)    (540)

Stock-based compensation

      560     560 

Comprehensive income (loss):

         

Net loss for 2008

       (121,451)   (121,451)      (121,451   (121,451  (1,069  (122,520

Other comprehensive loss:

                 

Benefit plan liability, net of ($1,097) tax effect

        (53,614)  (53,614)       (53,614  (53,614   (53,614

Currency translation adjustment

        (58,929)  (58,929)       (58,929  (58,929  (286  (59,215

Fair value change of derivatives, net of ($44) tax effect

        (15,981)  (15,981)       (15,981  (15,981   (15,981
                         

Comprehensive loss

         (249,975)        (249,975  (1,355  (251,330
                                            

Balance at December 31, 2008

  3,479,100  $35  $354,894  $(280,216) $(59,536) $15,177 

Balance at December 31, 2008—Predecessor

   3,479,100    35    354,894    (280,216  (59,536  15,177    4,485    19,662  

Issuance of common stock

   3,512     88      88     88  

Stock-based compensation

     1,334      1,334     1,334  

Comprehensive income (loss):

         

Net loss for 2009

      (356,062   (356,062  (126  (356,188

Other comprehensive income (loss):

         

Benefit plan liability, net of $1,120 tax effect

       (3,499  (3,499   (3,499

Currency translation adjustment

       25,898    25,898    105    26,003  

Fair value change of derivatives, net of ($3,843) tax effect

       6,100    6,100     6,100  
                                  

Comprehensive loss

        (327,563  (21  (327,584
                         

Balance at December 31, 2009—Predecessor

   3,482,612    35    356,316    (636,278  (31,037  (310,964  4,464    (306,500

Issuance of common stock

          —    

Stock-based compensation

     244      244     244  

Deconsolidation of non-controlling interest and other

         (4,622  (4,622

Comprehensive income (loss):

         

Net income five months ended May 31, 2010

      636,287     636,287    322    636,609  

Other comprehensive income (loss):

         

Benefit plan liability, net of $34 tax effect

       126    126     126  

Currency translation adjustment

       (31,091  (31,091  17    (31,074

Fair value change of derivatives, net of $194 tax effect

       (81  (81   (81
               

Comprehensive income

        605,241    339    605,580  

Reorganization and fresh start accounting adjustments

   (3,482,612  (35  (356,560  (9  62,083    (294,521  2,182    (292,339
                         

Balance at May 31, 2010—Predecessor

   —      —      —      —      —      —      2,363    2,363  

Issuance of common stock

   17,489,693    17    473,275      473,292     473,292  

Initial grant awards (Note 19)

   859,971         
                         

Balance at May 31, 2010—Successor

   18,349,664    17    473,275    —      —      473,292    2,363    475,655  

Stock-based compensation

     5,431      5,431     5,431  

Initial grant awards (Note 19)

   26,448         

Dividends paid

      (4,734   (4,734   (4,734

Comprehensive income

         

Net income seven months ended December 31, 2010

      40,576     40,576    549    41,125  

Other

         (334  (334

Other comprehensive income:

         

Benefit plan liability, net of ($489) tax effect

       4,962    4,962     4,962  

Currency translation adjustment

       40,828    40,828    29    40,857  

Fair value change of derivatives, net of ($36) tax effect

       91    91     91  
               

Comprehensive income

        86,457    244    86,701  
                         

Balance at December 31, 2010—Successor

   18,376,112   $17   $478,706   $35,842   $45,881   $560,446   $2,607   $563,053  
                         

The accompanying notes are an integral part of these consolidated financial statements.

COOPER-STANDARD HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

 

  Predecessor  Successor 
  Year Ended
December 31,
2006
 Year Ended
December 31,
2007
 Year Ended
December 31,
2008
   Year Ended
December 31, 2008
 Year Ended
December 31, 2009
 Five Months Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 

Operating Activities:

         

Net loss

  $(8,420) $(150,993) $(121,451)

Adjustments to reconcile net loss to net cash provided by operating activities:

    

Consolidated net income (loss)

  $(122,520 $(356,188 $636,609   $41,125  

Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities:

     

Depreciation

   107,408   104,199   109,109    109,109    98,801    35,333    57,687  

Amortization

   31,025   31,850   30,996 

Amortization of intangibles

   30,996    14,976    319    8,982  

Impairment charges

   13,247   146,366   33,369    33,369    363,496    —      —    

Reorganization items and fresh-start adjustments

   —      17,367    (660,048  —    

Non-cash restructuring charges

   9,029    1,268    46    468  

Gain on bond repurchase

   (4,071)  —     (1,696)   (1,696  (9,096  —      —    

Non-cash restructuring charges

   8,975   626   9,029 

Amortization of debt issuance cost

   5,057   4,883   4,866    4,866    10,286    11,505    714  

Stock-based compensation expense

   1,264    1,361    244    6,351  

Deferred income taxes

   (32,513)  (1,296)  14,045    12,810    (41,316  31,049    (7,760

Changes in operating assets and liabilities, net of effects of businesses acquired:

    

Changes in operating assets and liabilities:

     

Accounts receivable

   12,170   (31,750)  144,920    163,279    14,886    (33,553  47,665  

Inventories

   16,897   14,836   28,062    28,062    9,914    (11,824  7,663  

Prepaid expenses

   9,532   3,440   (2,880)   (2,880  (974  (6,412  6,904  

Accounts payable

   (30,629)  39,945   (86,316)   (86,316  50,081    (59,180  (9,234

Accrued liabilities

   (5,536)  (16,567)  (28,148)   (28,148  27,117    29,561    20,483  

Other

   12,740   39,834   2,588    (14,731  (71,997  (49,044  (10,452
                       

Net cash provided by operating activities

   135,882   185,373   136,493 

Net cash provided by (used in) operating activities

   136,493    129,982    (75,395  170,596  

Investing activities:

         

Property, plant, and equipment

   (82,874)  (107,255)  (92,125)   (92,125  (46,113  (22,935  (54,441

Acquisition of businesses, net of cash acquired

   (201,621)  (158,671)  4,937 

Return on equity investments

   7,746   —     —   

Cost of other acquisitions and equity investments

   (4,116)  —     —   

Proceeds from sale -leaseback transaction

   —     4,806   8,556 

Acquisition of business, net of cash acquired

   4,937    —      —      —    

Gross proceeds from sale-leaseback transaction

   8,556    —      —      —    

Proceeds from sale of fixed assets

   111   1,096   4,775    4,775    642    3,851    2,603  

Other

   (1,000)  7   —   
                       

Net cash used in investing activities

   (281,754)  (260,017)  (73,857)   (73,857  (45,471  (19,084  (51,838

Financing activities:

         

Proceeds from issuance of debtor-in-possession financing

   —      175,000    —      —    

Payments on debtor-in-possession financing

   —      (313  (175,000  —    

Proceeds from issuance of long-term debt

   214,858   59,968   —      —      —      450,000    —    

Net change in short term debt

   949   6,189   37,004 

Increase (decrease) in short term debt, net

   37,004    24,104    (2,069  3,879  

Cash dividends paid

   —      —      —      (3,163

Principal payments on long-term debt

   (16,528  (11,646  (709,574  (2,123

Issuance of common stock—Predecessor

   —      88    —      —    

Proceeds from issuance of preferred and common stock

   —      —      355,000    —    

Debt issuance cost—Predecessor

   (561  (20,592  —      —    

Debt issuance cost and back stop fees

   —      —      (30,991  —    

Repurchase of common stock

   (540  —      —      —    

Repurchase of bonds

   (14,929)  —     (5,306)   (5,306  (737  —      —    

Principal payments on long-term debt

   (46,786)  (37,557)  (16,528)

Proceeds from issuance of stock

   300   30,000   —   

Repurchase of common stock

   —     —     (540)

Debt issuance cost

   (4,317)  (3,104)  (561)

Other

   (2,442)  (450)  —      —      171    —      48  
                       

Net cash provided by financing activities

   147,633   55,046   14,069 

Net cash provided by (used in) financing activities

   14,069    166,075    (112,634  (1,359

Effects of exchange rate changes on cash

   (7,643)  4,153   (6,061)   (6,061  18,147    5,528    (1,618
             

Changes in cash and cash equivalents

   (5,882)  (15,445)  70,644    70,644    268,733    (201,585  115,781  

Cash and cash equivalents at beginning of year

   62,204   56,322   40,877 

Cash and cash equivalents at beginning of period

   40,877    111,521    380,254    178,669  
                       

Cash and cash equivalents at end of year

  $56,322  $40,877  $111,521 

Cash and cash equivalents at end of period

  $111,521   $380,254   $178,669   $294,450  
                       

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands except per share and share amounts)

1. Description of Business

Description of business

Cooper-Standard Holdings Inc. (the “Company”“Company,” “we” or “us”), through its wholly-owned subsidiary Cooper-Standard Automotive Inc.CSA U.S., is a leading global manufacturer of body & chassissealing, AVS and fluid handling components, systems, subsystems and modules, primarily for use in passenger vehicles and light trucks, forthat are manufactured by global original equipment manufacturers (“OEMs”)automotive OEMs and replacement markets. The Company conducts substantially all of its activities through its subsidiaries.

The Company is one ofbelieves that they are the largest global producersproducer of body sealing systems, one of the two largest North American producers in the noise, vibration and harshness control (“NVH”) business, and the second largest global producer of the types of fluid handling products that we manufacture. Wethey manufacture and one of the largest North American producers of AVS business. They design and manufacture ourtheir products in each major region of the world through a disciplined and consistentsustained approach to engineering and production.operational excellence. The Company operates in 6866 manufacturing locations and tennine design, engineering, and administrative locations in 18 countries around the world.

On May 27, 2010, the Company and certain of its U.S. and Canadian subsidiaries emerged from under Chapter 11 of the Bankruptcy Code. In accordance with the provisions of Financial Accounting Standards Board (“FASB”) ASC 852, “Reorganizations,” the Company adopted fresh-start accounting upon its emergence from Chapter 11 bankruptcy proceedings and became a new entity for financial reporting purposes as of June 1, 2010. Accordingly, the consolidated financial statements for the reporting entity subsequent to emergence from Chapter 11 bankruptcy proceedings (the “Successor”) are not comparable to the consolidated financial statements for the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings (the “Predecessor”).

2. Significant Accounting Policies

Principles of combination and consolidation – The consolidated financial statements include the accounts of the Company and the wholly owned and less than wholly owned subsidiaries controlled by the Company. All material intercompany accounts and transactions have been eliminated. Acquired businesses are included in the consolidated financial statements from the dates of acquisition.

The equity method of accounting is followed for investments in which the Company does not have control, but does have the ability to exercise significant influence over operating and financial policies. Generally this occurs when ownership is between 20 to 50 percent. The cost method is followed in those situations where the Company’s ownership is less than 20 percent and the Company does not have the ability to exercise significant influence. The investment totals at December 31, 2010 reflect the adoption of fresh-start accounting, see Note 4. “Fresh-Start Accounting” to the consolidated financial statements.

The Company’s investment in Nishikawa Standard Company (“NISCO”),NISCO, a 50 percent owned joint venture in the United States, is accounted for under the equity method. This investment totaled $13,472$13,400 and $11,905$22,886 at December 31, 20072009 and 2008,2010, respectively, and is included in other assets in the accompanying consolidated balance sheets. In 2010, the Company received from NISCO a dividend of $2,000 all of which was related to earnings.

The Company’s investment in Guyoung, Technology Co. Ltd (“Guyoung”), a 20 percent owned joint venture in Korea, is accounted for under the equity method. This investment totaled $5,632$1,370 and $1,179$1,633 at December 31, 20072009 and 2008,2010, respectively, and is included in other assets in the accompanying consolidated balance sheets. The fair value of Guyoung’s stock has declined since the Company’s 2006 acquisition

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and during 2008, the Company determined that the decline in fair value was other than temporary and an impairment of $2,669 was recorded in equity earnings in our consolidated statement of operations.share amounts)

The Company’s investment in Shanghai SAIC-Metzler Sealing Systems Co. Ltd.,HASCO, a 47.5 percent owned joint venture in China, is accounted for under the equity method. This investment totaled $17,240$20,994 and $20,166$24,344 at December 31, 20072009 and 2008,2010, respectively, and is included in other assets in the accompanying consolidated balance sheets. In 2010, the Company received from HASCO a dividend of $1,784 all of which was related to earnings.

Foreign currency – The financial statements of foreign subsidiaries are translated to U.S. dollars at the end-of-period exchange rates for assets and liabilities and at a weighted average exchange rate for each period for revenues and expenses. Translation adjustments for those subsidiaries whose local currency is their functional currency are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Transaction related gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other that the functional currency are recognized in earnings as incurred, except for those intercompany balances which are designated as long-term.

Cash and cash equivalents – The Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

Accounts receivable – The Company records trade accounts receivable when revenue is recorded in accordance with its revenue recognition policy and relieves accounts receivable when payments are received from customers. Generally the Company does not require collateral for its accounts receivable.

Allowance for doubtful accounts – The allowance for doubtful accounts is established through charges to the provision for bad debts. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. This evaluation is inherently subjective, as it requires estimates that are susceptible to revision as more information becomes available. The allowance for doubtful accounts was $10,232$5,871 and $4,040$993 at December 31, 20072009 and 2008,2010, respectively.

Advertising expense – Expenses incurred for advertising are generally expensed when incurred. Advertising expense was $825 for 2006, $842 for 2007, and $1,080 for 2008.2008, $345 for 2009, $258 for the five months ended May 31, 2010 and $426 for the seven months ended December 31, 2010.

Inventories – Inventories are valued at lower of cost or market. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. The Company records inventory reserves for inventory in excess of production and/or forecasted requirements and for obsolete inventory in production. As of December 31, 20072009 and 2008,2010, inventories are reflected net of reserves of $14,823$17,158 and $10,896,$2,504, respectively.

   Predecessor  Successor 
   December 31,
2009
  December 31,
2010
 

Finished goods

  $27,826   $32,690  

Work in process

   25,616    27,223  

Raw materials and supplies

   58,133    62,130  
         
  $111,575   $122,043  
         

In connection with the adoption of fresh-start accounting, an $8,136 fair value write-up of inventory was recorded at May 31, 2010 in the Predecessor. Such inventory was liquidated as of December 31, 2010 by the Successor and recorded as an increase to cost of product sold.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

Derivative financial instruments – Derivative financial instruments are utilized by the Company to reduce foreign currency exchange, interest rate, and commodity price risks. The Company has established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities. On the date the derivative is established, the Company designates the derivative as either a fair value hedge, a cash flow hedge, or a net investment hedge in accordance with its established policy. The Company does not enter into financial instruments for trading or speculative purposes.

Income taxes – Income tax expense in the consolidated and combined statements of operations is calculatedaccounted for in accordance with SFAS No. 109,ASC Topic 740, “Accounting for Income Taxes,, which requires the recognition of deferred income taxes using the liability method.

Deferred tax assets or liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax laws and rates. A valuation allowance is provided on deferred tax assets if we determinethe Company determines that it is more likely than not that the asset will not be realized.

Long-lived assets – Property, plant, and equipment are recorded at cost and depreciated using primarily the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the expected life of the asset or term of the lease, whichever is shorter. Intangibles with definitefinite lives, which include technology customer contracts, and customer relationships, are amortized over their estimated useful lives. The Company evaluates the recoverability of long-lived assets when events and circumstances indicate that the assets may be impaired and the undiscounted net cash flows estimated to be generated by those assets are less than their carrying value. If the net carrying value exceeds the fair value, an impairment loss exists and is calculated based on a discounted cash flow analysis or estimated salvage value. Discounted cash flows are estimated using internal budgets and assumptions regarding discount rates and other factors.

Pre-Production Costs Related to Long Term Supply Arrangements – Costs for molds, dies, and other tools owned by usthe Company to produce products under long-term supply arrangements are recorded at cost in property, plant, and equipment and amortized over the lesser of three years or the term of the related supply agreement. The amountamounts capitalized was $8,796were $9,324 and $10,896$5,813 at December 31, 20072009 and 2008,2010, respectively. Costs incurred during the engineering and design phase ofThe Company expenses all pre-production tooling costs related to customer-owned tooling projects are expensed as incurred unless a contractual arrangementtools for which reimbursement is not contractually guaranteed by the customer exists.customer. Reimbursable tooling costs included in other assets in the accompanying consolidated balance sheets was $8,851$2,561 and $3,822$8,537 at December 31, 20072009 and 2008,2010, respectively. DevelopmentReimbursable tooling costs for tools owned by the customer that meet Emerging Issues Task Force (EITF) EITF 99-5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

requirement are recorded in accounts receivable in the accompanying combinedconsolidated balance sheets if considered a receivable in the next twelve months. At December 31, 20072009 and 2008, $73,5842010, $65,351 and $77,769,$64,457, respectively, waswere included in accounts receivable for customer-owned tooling of which $38,960$40,510 and $32,768,$38,829, respectively, was not yet invoiced to the customer.

Goodwill – Goodwill is not amortized but is tested annually for impairment by reporting unit which areis determined in accordance with SFAS No. 142 “GoodwillASC Topic 350 “Intangibles-Goodwill and Other Intangible Assets”. The Company utilizes an income approach to estimate the fair value of each of its reporting units. The income approach is based on projected debt-free cash flow which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The Company believes that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating cash flow performance. This approach also mitigates the impact of cyclical trends that occur in the industry. Fair value is estimated using recent automotive industry and specific platform production volume projections, which are based on both third-party and internally-developed forecasts, as well as commercial, wage and benefit, inflation and discount rate assumptions. Other significant assumptions include the weighted average cost of capital, terminal value growth rate, terminal value margin rates, future capital expenditures and changes in future working capital requirements. While there are inherent uncertainties related to the assumptions used and to management’s application of these assumptions to this analysis, the Company believes that the income approach provides a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

reasonable estimate of the fair value of its reporting units. The Company conducts its annual goodwill impairment analysis as of October 1st of each fiscal year. The 2010 annual goodwill impairment analysis resulted in no impairment.

Revenue Recognition and Sales CommitmentsWeThe Company generally enterenters into agreements with ourtheir customers to produce products at the beginning of a vehicle’s life. Although such agreements do not generally provide for minimum quantities, once wethey enter into such agreements, fulfillment of ourtheir customers’ purchasing requirements can be ourtheir obligation for an extended period or the entire production life of the vehicle. These agreements generally may be terminated by ourtheir customer at any time. Historically, terminations of these agreements have been minimal. In certain limited instances, wethey may be committed under existing agreements to supply products to ourtheir customers at selling prices which are not sufficient to cover the direct cost to produce such products. In such situations, wethey recognize losses as they are incurred.

We receiveThe Company receives blanket purchase orders from many of ourtheir customers on an annual basis. Generally, such purchase orders and related documents set forth the annual terms, including pricing, related to a particular vehicle model. Such purchase orders generally do not specify quantities. WeThey recognize revenue based on the pricing terms included in ourtheir annual purchase orders as ourtheir products are shipped to ourtheir customers. As part of certain agreements, wethey are asked to provide ourtheir customers with annual cost reductions. WeThey accrue for such amounts as a reduction of revenue as ourtheir products are shipped to ourtheir customers. In addition, wethey generally have ongoing adjustments to ourtheir pricing arrangements with ourtheir customers based on the related content and cost of ourtheir products. Such pricing accruals are adjusted as they are settled with ourtheir customers.

Amounts billed to customers related to shipping and handling are included in net sales in ourtheir consolidated statements of operations. Shipping and handling costs are included in cost of sales in ourtheir consolidated statements of operations.

Research and development – Costs are charged to selling, administration and engineering expense as incurred and totaled $74,791 for 2006, $77,183 for 2007, and $81,942 for 2008.2008, $62,880 for 2009, $29,130 for the five months ended May 31, 2010 and $39,662 for the seven months ended December 31, 2010.

Stock-based compensationEffective January 1, 2006, theThe Company adopted SFAS No. 123(R),Share-Based Payment, using the prospective method. The prospective method requiresmeasures stock-based compensation cost to be recognized for all share-based payments granted after the effective date of SFAS No. 123 (R). All awards granted prior to the effective date are accounted forexpense at fair value in accordance with Accounting Principles Board Opinion (“APB”) No. 25,Accounting for Stock IssuedGAAP and recognizes such expenses over the vesting period of the stock-based employee awards. For further information related to Employees.the Company’s stock-based compensation programs, see Note 19. “Stock Based Compensation.”

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United StatesGAAP requires management to make estimates and assumptions that affect reported amounts of (1) revenues and expenses during the reporting period and (2) assets and liabilities, as well as disclosure of contingent assets and liabilities, at the date of the financial statements. Actual results could differ from those estimates.

Reclassifications – Certain amounts in prior periods’ financial statements have been reclassified to conform to the presentation used in the 2010 Predecessor and Successor periods.

Recent accounting pronouncements

In December 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-28, “Intangibles—Goodwill and Other (Topic 350).” This ASU modifies the first step of the goodwill impairment test to include reporting units with zero or negative carrying amounts. For these reporting units, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any; when it is more likely than

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

Reclassifications – Certain prior period amounts have been reclassified to conform to the current year presentation.

Recent accounting pronouncements

In March 2008, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 161, “Disclosures About Derivative Instruments and Hedging Activities-an Amendment of FASB Statement No. 133”. SFAS No. 161 requires entitiesnot that utilize derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as any details of credit risk related contingent features contained within derivatives. SFAS No. 161 also requires entities to disclose additional information about the amounts and locations of derivatives located within the financial statements, how the provisions of SFAS No. 133 have been applied and the impact that hedges have on an entity’s financial position, financial performance, and cash flows. SFAS No. 161a goodwill impairment exists. This ASU is effective for fiscal years and interim periods beginning after NovemberDecember 15, 2008, with early application encouraged.2010. The Company is currently evaluatinghas evaluated the impact this statementASU and does not believe it will have a material impact on the consolidated financial statements.

In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805).” This ASU specifies that if a company presents comparative financial statements, the company should disclose revenue and earnings of the combined entity as though the business combination that occurred during the year had occurred as of the beginning of the comparable prior annual reporting period only. The ASU also expands the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the pro forma revenue and earnings. This ASU is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Effective January 1, 2011, the Company adopted this ASU and will include all required disclosures in the notes to its consolidated financial statements.statements, if applicable.

The FASB issued SFAS No. 141 (revised 2007)amended ASC 605, “Revenue Recognition, “Business Combinations.This statement significantly changeswith ASU 2009-13, “Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements.” If a revenue arrangement has multiple deliverables, this update requires the financial accounting and reportingallocation of business combination transactions.revenue to the separate deliverables based on relative selling prices. In addition, this update requires additional ongoing disclosures about an entity’s multiple-element revenue arrangements. The provisions of this statement are to be applied prospectively to business combination transactions entered into by the Company on or afterupdate were effective January 1, 2009.2011. The effects of adoption were not significant.

The FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.” SFAS No. 160 establishes accounting and reporting standards for noncontrolling interests in subsidiaries. This statement requires the reporting of all noncontrolling interests as a separate component of stockholders’ equity, the reporting of consolidated net income (loss) as the amount attributable to both the parent and the noncontrolling interests and the separate disclosure of net income (loss) attributable to the parent and to the noncontrolling interests. In addition, this statement provides accounting and reporting guidance related to changes in noncontrolling ownership interests. Other than the reporting requirements described above which require retrospective application, the provisions of SFAS No. 160 are to be applied prospectively by the Company beginning January 1, 2009. The Company is currently evaluating the impact this statement will have on its consolidated financial statements.

In February 2007,2010, the FASB issued SFAS No. 159 “TheASU 2010-06, “Guidance Amending Fair Value OptionDisclosures for Financial AssetsInterim and Financial Liabilities, including an amendment to FASB Statement 115”Annual Reporting Periods Beginning After December 15, 2009.” This statement permits entities to choose to measure manyguidance requires disclosures about transfers of financial instruments into and certain other items at fair value that are not currently required to be measured at fair value. This statement also establishes presentationout of Level 1 and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types2 designations and disclosures about purchases, sales, issuances and settlements of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.financial instruments with a Level 3 designation. The Company adopted this statement as ofeffective January 1, 2008, but it had no2010. The adoption of ASU No. 2010-06 did not have a material impact on itsthe Company’s consolidated financial condition or resultsstatements.

The FASB amended ASC 810, “Consolidations,” with ASU 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.” This update significantly changes the model for determining whether an entity is the primary beneficiary and should thus consolidate a variable interest entity. In addition, this update requires additional disclosures and an ongoing assessment of operations aswhether a variable interest entity should be consolidated. The provisions of this update were effective for annual reporting periods beginning after November 15, 2009. The effects of adoption were not significant.

3. Reorganization Under Chapter 11 of the Bankruptcy Code

Filing of Bankruptcy Cases

During the first half of 2009, the Company did not elect to applyexperienced a substantial decrease in revenues caused by the fair value option.

In September 2006,severe decline in worldwide automotive production that followed the FASB issued SFASglobal financial crisis that began in 2008. On August 3, 2009, the Company and each of its direct and indirect wholly-owned U.S. subsidiaries (collectively with the Company, the “Debtors”) filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) (Consolidated Case No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)”09-12743(PJW)) (the “Chapter 11 Cases”). This statement requires recognition ofOn August 4, 2009, the funded status ofCompany’s Canadian subsidiary, Cooper-Standard Automotive Canada Limited, a company’s defined benefit pension and postretirement benefit plans as an asset or liability on the balance sheet. Previously,corporation incorporated under the provisionslaws of SFAS No. 87, “Employers’ Accounting for Pensions,”Ontario (“CSA Canada”), commenced proceedings seeking relief from its creditors under Canada’s Companies’ Creditors Arrangement Act (the “Canadian Proceedings”) in the Ontario Superior Court of Justice in Toronto, Canada (Commercial List) (the “Canadian Court”), court file no. 09-8307-00CL. The Company’s subsidiaries and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” the asset or liability recorded on the balance sheet reflected the funded status of the plan, net of certain unrecognized items that qualified for delayed income statement recognition. Under SFAS No. 158, these previously unrecognized items are to be recorded in accumulated other comprehensive income (loss) when the recognition provisions are adopted. The Company adopted the recognition provisions as of December 31, 2007, and the funded status of its defined benefit plans is reflected in its consolidated balance sheets as of December 31, 2007 and December 31, 2008.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

This statement also requires the measurement of defined benefit plan assets and liabilities asoperations outside of the annual balance sheet date. PriorUnited States and Canada were not subject to adoptionthe requirements of this statement,the Bankruptcy Code. On March 26, 2010, the Debtors filed with the Bankruptcy Court their Second Amended Joint Chapter 11 Plan of Reorganization (as amended and supplemented, the “Plan of Reorganization”) and their First Amended Disclosure Statement (as amended and supplemented, the “Disclosure Statement”). On May 12, 2010, the Bankruptcy Court entered an order approving and confirming the Plan of Reorganization (the “Confirmation Order”). CSA Canada’s plan of compromise or arrangement was sanctioned on April 16, 2010.

On May 27, 2010 (the “Effective Date”), the Debtors consummated the reorganization contemplated by the Plan of Reorganization and emerged from Chapter 11 bankruptcy proceedings.

Post-Emergence Capital Structure and Recent Events

Following the Effective Date, the Company’s capital structure consisted of the following:

Senior ABL Facility. A senior secured asset-based revolving credit facility in the aggregate principal amount of $125,000 (the “Senior ABL Facility”), which contains an uncommitted $25,000 “accordion” facility that will be available at the Company’s request if the lenders at the time consent.

8 1/2% Senior Notes due 2018. $450,000 of senior unsecured notes (the “Senior Notes”) that bear interest at 8 1/2% per annum and mature on May 1, 2018.

Common stock, 7% preferred stock and warrants. Equity securities comprised of (i) 17,489,693 shares of the Company’s common stock, (ii) 1,000,000 shares of the Company’s 7% cumulative participating convertible preferred stock (“7% preferred stock”), which are initially convertible into 4,290,788 shares of the Company’s common stock, and (iii) 2,419,753 warrants (“warrants”) to purchase up to an aggregate of 2,419,753 shares of the Company’s common stock.

On the Effective Date, the Company measured its plan assetsissued to key employees of the Company, (i) 757,896 shares of common stock plus, subject to realized dilution on the warrants, an additional 104,075 shares of common stock as restricted stock, (ii) 41,664 shares of 7% preferred stock as restricted 7% preferred stock, and liabilities using(iii) 702,509 options to purchase shares of common stock, plus, subject to realized dilution on the warrants, an early measurement dateadditional 78,057 options to purchase shares of October 1st forcommon stock. On the majorityday after the Effective Date, the Company issued to certain of its plans,directors and Oak Hill Advisors L.P. or its affiliates, 26,448 shares of common stock as allowed by the original provisionsrestricted stock and 58,386 options to purchase shares of SFAS No. 87, “Employers’ Accounting for Pensions,” and SFAS No. 106 “Employers’ Accounting for Postretirement Benefits Other Than Pensions,” The measurement date provisions of SFAS No. 158 are effective for fiscal years ending after December 15, 2008.common stock. The Company adopted the measurement date provisionsalso reserved 780,566 shares of SFAS No. 158 in 2008 using the fifteen month measurement approach, under which the Company recorded an adjustment to beginning retained earnings as of January 1, 2008 to recognize the net periodic benefit costcommon stock for the period October 1, 2007 through December 31, 2007. This adjustment represented a pro rata portion of the net periodic benefit cost determined for the period beginning October 1, 2007 and ending December 31, 2008.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. This statement applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. SFAS No. 157 is effective for the fiscal year beginning after November 15, 2007. The Company adopted SFAS No. 157 as of January 1, 2008 except for non-financial assets and liabilities recognized or disclosed at fair value on a non-recurring basis, for which the effective date is fiscal years beginning after November 15, 2008. See Note 19, Fair Value of Financial Instruments for additional discussion of SFAS No. 157.

3. Acquisitions

On February 6, 2006, the Company completed the acquisition of the automotive fluid handling systems business of ITT Industries, Inc. (“FHS”). FHS, based in Auburn Hills, Michigan, was a leading manufacturer of steel and plastic tubing for fuel and brake lines and quick-connects, and operated 15 facilities in seven countries. FHS was acquired for $205,000, subject to an adjustment based on the difference between targeted working capital and working capital at the closing date, which was settled in September 2006. Additionally, the Company incurred direct acquisition costs, principally for investment banking, legal, and other professional services. After adjusting for working capital and additional acquisition costs, the total acquisition value under purchase accounting was $201,638. This acquisition was accounted for under the purchase method of accounting and the results of operations are included in our consolidated financial statements from the date of acquisition.

The acquisition of FHS was funded pursuant to an amendmentfuture issuance to the Company’s management. On July 19, 2010, the Company paid a dividend to holders of its outstanding 7% preferred stock in the form of 10,780 additional shares of 7% preferred stock.

For further information on the Senior Credit Facilities which established a Term Loan D facility,ABL Facility and the Senior Notes, see Note 8. “Debt.” For further information on our common stock, 7% preferred stock and warrants, see Note 18. “Capital Stock.”

Satisfaction of Debtor-in-Possession Financing

In connection with a notional amount of $215,000. The Term Loan D facility was structured in two tranches, with $190,000 borrowed in US dollars and €20,725 borrowed in Euros, to take into consideration the valuecommencement of the European assets acquired inChapter 11 Cases and the transaction. TheCanadian Proceedings, the Company incurred approximately $4,800 of issuance costs associated with these borrowings, primarily for loan arrangement and syndication services, which are included in other assets onentered into debtor-in-possession financing arrangements. On the consolidated balance sheet. The amendment to the Senior Credit Facilities provides for interest on Term Loan D borrowings at a rate equal to an applicable margin plus a base rate established by reference to various market-based rates and amends the interest rate margins previously applicable to Term Loan B and Term Loan C borrowings to mirror those applicable to Term Loan D borrowings, which were market levels at the time the facility closed. The amendment also includes modifications to certain covenantsEffective Date, all remaining amounts outstanding under the Senior Credit Facilities, althoughCompany’s debtor-in-possession financing arrangement were repaid using proceeds of the covenant threshold levels remain unchanged.

In November 2006, the Company increased its ownership position in Cooper-Standard Automotive Korea Inc. from 90% to 100 % for $1,516 in cash.

In December 2006, the Company acquiredDebtors’ exit financing. For additional ownership interest in Cooper Saiyang Wuhu Automotive Co., Ltd., a joint venture with Saiyang Sealing in Wuhu, China, for $2,200 in cash, increasing its ownership interest from 74.2% to 88.7%.

information on these financing arrangements, see Note 8. “Debt.”

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

On August 31, 2007Cancellation of Certain Prepetition Obligations

Under the Company completedPlan of Reorganization, the acquisitionCompany’s prepetition equity, debt and certain of nine Metzeler Automotive Profile Systems sealing systems operations in Germany, Italy, Poland, Belarus, Belgium,its other obligations were cancelled and a joint venture interest in China (“MAPS”extinguished as follows:

the Predecessor’s equity interests, including common stock and any options, warrants, calls, subscriptions or other similar rights or other agreements, commitments or outstanding securities obligations, were cancelled and extinguished, and no distributions were made to the “MAPS businesses”), from Automotive Sealing Systems S.A. The MAPS businessesPredecessor’s former equity holders;

the Predecessor’s prepetition debt securities were acquiredcancelled and the indentures governing such obligations were terminated (other than for $143,063 subject to an adjustment based on the difference between targeted working capital and working capital at the closing date, which was settled in June 2008. After adjusting for working capital and direct acquisition costs, the total acquisition value under purchase accounting was $144,378.

The condensed consolidated financial statementspurposes of allowing holders of the Company reflect the acquisitionnotes to receive distributions under the purchase methodPlan of accounting,Reorganization and allowing the trustees to exercise certain rights); and

the Predecessor’s prepetition credit agreement was cancelled and terminated, including all agreements related thereto (other than for the purposes of allowing creditors under that facility to receive distributions under the Plan of Reorganization and allowing the administrative agent to exercise certain rights).

For further information regarding the resolution of certain of the Company’s other prepetition liabilities in accordance with SFAS No. 141.the Plan of Reorganization, see Note 4. “Fresh-Start Accounting—Liabilities Subject to Compromise.”

The acquisition of the MAPS businesses was funded in part by borrowings under the Company’s Credit Agreement, which was amended to provide for such borrowings as4. Fresh-Start Accounting

As discussed in Note 8, Debt.3. “Reorganization Under Chapter 11 of the Bankruptcy Code,” the Debtors emerged from Chapter 11 bankruptcy proceedings on May 27, 2010. As a result, the Successor adopted fresh-start accounting as (i) the reorganization value of the Predecessor’s assets immediately prior to the confirmation of the Plan of Reorganization was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the Predecessor’s existing voting shares immediately prior to the confirmation of the Plan of Reorganization received less than 50% of the voting shares of the emerging entity. GAAP requires the adoption of fresh-start accounting as of the Plan of Reorganization’s confirmation date, or as of a later date when all material conditions precedent to the Plan of Reorganization becoming effective are resolved, which occurred on May 27, 2010. The Company borrowed €44,000 and combined this borrowingelected to adopt fresh-start accounting as of May 31, 2010 to coincide with EUR amounts outstanding under Term Loan D to create a new Term Loan E. In addition, the Company borrowed USD $10,000 under the primary Revolving Credit Agreement and €15,000 under the dual-currency sub limittiming of the Revolver, borrowed directly by Cooper-Standard International Holdings BV. The Company also received an aggregate of $30,000 in equity contributionsits normal May accounting period close. There were no transactions that occurred from its principal shareholders, affiliates of GS Capital Partners 2000, L.P., which contributed a total of $15,000, and affiliates of The Cypress Group L.L.C., which also contributed a total of $15,000. The remainder of the funding necessary for the acquisition came from available cash on hand.

The acquisition of the MAPS businesses were accounted for as a purchase business combination and accordingly, the assets purchased and liabilities assumed were included inMay 28, 2010 through May 31, 2010, that would materially impact the Company’s consolidated balance sheet as of December 31, 2008. The operating results of the MAPS businesses were included in the consolidatedfinancial position, results of operations fromor cash flows for the date2010 Successor or 2010 Predecessor periods.

Reorganization Value

The Bankruptcy Court confirmed the Plan of acquisition. The following summarizesReorganization, which included an enterprise value (or distributable value) of $1,025,000, assuming $50,000 of excess cash, as set forth in the allocationDisclosure Statement. For purposes of the purchase pricePlan of Reorganization and the Disclosure Statement, the Company and certain unsecured creditors agreed upon this value. This reorganization value was determined to be a fair and reasonable value and is within the estimated fairrange of values considered by the Bankruptcy Court as part of the assets acquiredconfirmation process. The reorganization value reflects a number of factors and liabilities assumed atassumptions, including the dateCompany’s statements of acquisition.

Cash and cash equivalents

  $10,237

Accounts receivable, net

   118,216

Inventories, net

   33,415

Prepaid expenses

   7,995

Property, plant, and equipment, net

   126,058

Investments

   16,531

Other assets

   32,874
    

Total assets acquired

   345,326
    

Accounts payable

   66,211

Short-term notes payable

   22,039

Payroll liabilities

   28,806

Accrued liabilities

   14,821

Long-term debt

   14,556

Pension benefits

   37,839

Other long-term liabilities

   16,676
    

Total liabilities assumed

   200,948
    

Net assets acquired

  $144,378
    

Cashoperations and balance sheets, the Company’s financial projections, the amount of cash equivalents, accounts receivable, otherto fund operations, current assets, accounts payable,market conditions and other current liabilities were stated at historical carryinga return to more normalized light vehicle production and sales volumes. The range of values which management believes approximates fair value givenconsidered by the short-term natureBankruptcy Court of these assets$975,000 to $1,075,000 was determined using comparable public company trading multiples, precedent transactions analysis and liabilities. Inventories were recorded at fair value which is

discounted cash flow valuation methodologies.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

estimatedThe comparable public company analysis identified a group of comparable companies giving consideration to lines of business, size, geographic footprint and customer base. The analysis compared the public market implied enterprise value for finished goodseach comparable public company to its projected earnings before interest, taxes, depreciation and work-in-process based uponamortization (“EBITDA”). The calculated range of multiples for the expected selling price less costscomparable companies was used to complete, selling and disposal costs, andestimate a normal profitrange which was applied to the buyer. Raw material inventory was recorded at carryingCompany’s projected EBITDA to determine a range of enterprise values for the reorganized company or the reorganization value.

Precedent transactions analysis estimates the value of a company by examining public merger and acquisition transactions. An analysis of a company’s transaction value as such value approximatesa multiple of various operating statistics provided industry-wide valuation multiples for companies in similar lines of business to the replacement cost. Tooling in process, which is included in other assets, was recorded at fair value which isDebtors. Transaction multiples are calculated based upon expected selling price less costs to complete. The Company’s pension obligations have been recorded inon the allocation of purchase price at(including any debt assumed) paid to acquire companies that are comparable to the projected benefit obligation. Deferred incomeDebtors. Prices paid as a multiple of revenue, earnings before interest and taxes have been provided inand EBITDA were considered, which were then applied to the consolidated balance sheetDebtors’ key operating statistics to estimate the enterprise value, or value to a potential strategic buyer.

The discounted cash flow analysis was based on the Company’s projected financial information, which includes a variety of estimates and assumptions. While the Company considers such estimates and assumptions reasonable, they are inherently subject to uncertainties and to a wide variety of significant business, economic and competitive risks, many of which are beyond the Company’s control and may not materialize. Changes in these estimates and assumptions may have had a significant effect on the determination of the Company’s reorganization value. The discounted cash flow analysis was based on recent automotive industry and specific platform production volume projections developed by both third-party and internal forecasts, as well as commercial, wage and benefit, inflation and discount rate assumptions. Other significant assumptions include terminal value growth rate, terminal value margin rate, future capital expenditures and changes in working capital requirements.

Reorganization Adjustments

The consolidated financial information gives effect to the following reorganization adjustments, the Plan of Reorganization and the implementation of the transactions contemplated by the Plan of Reorganization. These adjustments give effect to the terms of the Plan of Reorganization and certain underlying assumptions, which include, but are not limited to, the below.

The issuance of the Senior Notes, which resulted in cash proceeds of $450,000.

The issuance of 17.5 million shares of our common stock, including 8.6 million shares offered to holders of the Predecessor’s prepetition senior subordinated notes in connection with the rights offering conducted pursuant to the Plan of Reorganization (the “Rights Offering”), 2.6 million shares to certain of the Debtors’ creditors that agreed to backstop the Rights Offering (the “Backstop Parties”) pursuant to an equity commitment agreement (the “Equity Commitment Agreement”) and 6.3 million shares to certain holders of the Predecessor’s prepetition senior notes and prepetition senior subordinated notes. The Company also issued shares of 7% preferred stock convertible into 4.3 million shares of common stock pursuant to the Equity Commitment Agreement. The Company received cash proceeds of $355,000 in connection with the Rights Offering and Equity Commitment Agreement and also received the full and complete satisfaction, settlement and release of allowed prepetition senior note claims and allowed prepetition senior subordinated note claims for such shares. In addition, the Company also issued warrants to purchase 2.4 million shares of common stock.

The repayment of $175,000 of liabilities under the Debtors’ Debtor-in-Possession Credit Agreement (the “DIP Credit Agreement”). On the Effective Date, each holder of an allowed DIP claim received, in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

full and complete satisfaction, settlement and release of and in exchange for such allowed claim against the Debtors, an amount in cash equal to the allowed amount of such claim.

The repayment of the $639,600, including interest, outstanding under the Predecessor’s prepetition credit agreement in cash.

The repayment of the $105,200, including interest, outstanding of the Predecessor’s prepetition senior notes in cash.

The effects of the above reorganization adjustments resulted in a decrease in interest expense, including the amortization of debt issuance costs, resulting from a lower level of debt.

Adoption of Fresh-Start Accounting

Fresh-start accounting results in a new basis of accounting and reflects the allocation of the Company’s fair value to its underlying assets and liabilities. The Company’s estimates of fair value included in the tax versus book basisSuccessor’s financial statements represent the Company’s best estimates based on independent appraisals and valuations. The Company’s estimates of fair value are inherently subject to significant uncertainties and contingencies beyond the control of the Company. Accordingly, there can be no assurance that the estimates, assumptions, valuations and appraisals will be realized, and actual results could vary materially.

The Company’s reorganization value was allocated to its assets acquired and liabilities assumed, adjusted to estimated fair values. Management has estimatedin conformity with ASC 805, “Business Combinations.” The excess reorganization value over the fair value of property, plant,tangible and equipment, intangibles and other long-lived assets based upon financial estimates and projections prepared in conjunction with the transaction. The value assigned to all assets and liabilities assumed exceeded the acquisition price. Accordingly, an adjustment to reduce the value of long-livedidentifiable intangible assets was recorded in accordance with SFAS No. 141 and no goodwill was recorded related to this transactionas goodwill. Liabilities existing as of December 31, 2008.the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes were determined in conformity with applicable income tax accounting standards. Predecessor accumulated depreciation, accumulated amortization, retained deficit, common stock and accumulated other comprehensive loss were eliminated.

The following unaudited pro formaFresh-Start Consolidated Balance Sheet illustrates the financial data summarizeseffects on the results of operations for the year ended December 31, 2007, as if the MAPS acquisition had occurred as of January 1, 2007. Pro forma adjustments include liquidation of inventory fair value write-up as it had occurred during the reporting periods, depreciation and amortization to reflect the fair value of property, plant, and equipment and identified finite-lived intangible assets, the eliminationCompany of the amortization of unrecognized pension benefit losses, additional interest expense to reflect the Company’s new capital structure, and certain corresponding adjustments to income tax expense. These unaudited pro forma amounts are not necessarily indicativeimplementation of the results that would have been attained ifPlan of Reorganization and the acquisition had occurred at January 1, 2007, or that may be attained inadoption of fresh-start accounting. This Fresh-Start Consolidated Balance Sheet reflects the future and do not include other effects of the acquisition.

   2006  2007 

Sales

  $2,578,636  $2,807,972 

Operating profit (loss)

   80,809   (6,709)

Net loss

   (9,757)  (142,325)

In March of 2007, the Company completed the acquisitionconsummation of the El Jarudo fuel rail manufacturing business of Automotive Components Holdings, LLC (“El Jarudo” or the “El Jarudo business”). The business is located in Juarez, Mexico and is a producer of automotive fuel rails. This acquisition does not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

In December of 2007, the Company completed the acquisition of the 74% joint venture interest of Automotive Sealing Systems, S.A. (ASSSA) in Metzeler Automotive Profiles India Private Limited (“MAP India”). The remaining 26 percenttransactions contemplated in the joint venture is owned by Toyoda Gosei Co., Ltd. This acquisition does not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

4. Restructuring

2005 Initiatives

In 2005, the Company implemented a restructuring strategy and announced the closurePlan of two manufacturing facilities in the United States and the decision to exitReorganization, including settlement of various liabilities, issuance of certain businesses within and outside the U.S. Bothsecurities, incurrence of the closures are substantially complete asnew indebtedness, repayment of December 31, 2008, but the Company will continue to incur costs until the facilities are sold.

During the year ended December 31, 2008, the Company recorded total costs of $3,795 related to the previously announced U.S. closures and workforce reductions in Europe. These costs consisted of severance, asset impairment,old indebtedness and other exit costs of $295, $2,063 and $1,437, respectively. In addition the Company received $165 for assets that were previously written off. The initiative is substantially complete as of December 31, 2008 at an estimated total cost of approximately $27,000. The following table summarizes the activity for this initiative during the year ended December 31, 2008:cash payments.

 

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $775  $542  $—    $1,317 

Expense incurred

   295   1,437   2,063   3,795 

Cash payments

   (997)  (1,729)  165   (2,561)

Utilization of reserve

   —     —     (2,228)  (2,228)
                 

Balance at December 31, 2008

  $73  $250  $—    $323 
                 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

2006 Initiatives

In May 2006, the Company implemented a restructuring action and announced the closure of a manufacturing facility located in Canada and the transfer of related production to other facilities in North America. The closure was completed as of December 31, 2008 at a total cost of $3,809. During the year ended December 31, 2008, the Company reversed $9 of severance costs.

European Initiatives

In 2006, the Company implemented a European restructuring initiative, which addressed the operations of our non-strategic facilities. The initiative includes the closure of a manufacturing facility, terminations, and the transfer of production to other facilities in Europe and North America. The initiative is substantially complete as of December 31, 2008 at an estimated total cost of approximately $22,000 ($20,085 incurred in 2006 and 2007). The Company recorded severance, other exit costs and asset impairments of $1,076, $619 and $127, respectively, during the year ended December 31, 2008. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

     Predecessor
May 31,
2010
   Reorganization
Adjustments(1)
  Fresh-start
Adjustments(9)
   Successor
May 31,
2010
 

Assets

         

Current assets:

         

Cash and cash equivalents

    $200,311    $(21,642)(2)  $—      $178,669  

Restricted cash

     482,234     (482,234)(2)   —       —    

Accounts receivable, net

     409,041     —      —       409,041  

Inventories, net

     116,248     —      8,136     124,384  

Prepaid expenses

     26,931     (1,243)(3)   —       25,688  

Other

     36,858     (68)(2)   —       36,790  
                     

Total current assets

     1,271,623     (505,187  8,136     774,572  

Property, plant and equipment, net

     527,306     —      40,665     567,971  

Goodwill

     87,728     —      48,938     136,666(8) 

Intangibles, net

     10,294     —      144,711     155,005  

Other assets

     125,120     4,895(3)   (26,721   103,294  
                     
    $2,022,071    $(500,292 $215,729    $1,737,508  
                     

Liabilities and Equity (Deficit)

         

Current liabilities:

         

Debt payable within one year

    $15,335    $—     $—      $15,335  

Debtor-in-possession financing

     74,813     (74,813)(2)   —       —    

Accounts payable

     171,886     6,763(4)   —       178,649  

Payroll liabilities

     94,427     374(4)   (1,154   93,647  

Accrued liabilities

     92,426     4,232(4)   (9,462   87,196  
                     

Total current liabilities

     448,887     (63,444  (10,616   374,827  

Long-term debt

     458,373     —      —       458,373  

Pension benefits

     134,278     12,473(4)   21,685     168,436  

Postretirement benefits other than pensions

     75,198     —      4,948     80,146  

Deferred tax liabilities

     9,218     (268)(4)   12,267     21,217  

Other long-term liabilities

     21,124     1,891(4)   7,839     30,854  

Liabilities subject to compromise

     1,213,781     (1,213,781)(4)   —       —    
                     

Total liabilities

     2,360,859     (1,263,129  36,123     1,133,853  

Successor preferred stock

     —       128,000(2)(4)   —       128,000  

Equity (deficit):

         

Successor common stock

     —       17(2)(4)(7)   —       17  

Successor additional paid-in capital

     —       473,275(2)(4)(7)   —       473,275  

Predecessor common stock

     35     (35)(5)   —       —    

Predecessor additional paid-in capital

     356,560     (356,560)(5)   —       —    

Accumulated deficit

     (633,481   518,130(6)   115,351     —    

Accumulated other comprehensive loss

     (62,083   10(4)   62,073     —    
                     

Total Cooper-Standard Holdings Inc. equity (deficit)

     (338,969   634,837    177,424     473,292  

Noncontrolling interests

     181     —      2,182     2,363  
                     

Total equity (deficit)

     (338,788   634,837    179,606     475,655  
                     

Total liabilities and equity (deficit)

    $2,022,071    $(500,292 $215,729    $1,737,508  
                     

 

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $1,442  $—    $—    $1,442 

Expense incurred

   1,076   619   127   1,822 

Cash payments

   (1,776)  (619)  —     (2,395)

Utilization of reserve

   —     —     (127)  (127)
                 

Balance at December 31, 2008

  $742  $—    $—    $742 
                 

FHS Acquisition Initiatives

In connection with the acquisition of the automotive fluid handling systems business of ITT Industries, Inc. (“FHS”), the Company formalized a restructuring plan to address the redundant positions created by the consolidation of the businesses. In connection with this restructuring plan, the Company announced the closure of several manufacturing facilities located in North America, Europe, and Asia and the transfer of related production to other facilities. The closures are substantially complete as of December 31, 2008 at an estimated total cost of approximately $20,200, including costs recorded through purchase accounting. As a result of this initiative, the Company recorded certain severance and other exit costs of $11,833 and $720, respectively, through purchase accounting in 2006. The Company recorded severance, other exit costs and asset impairments of $843, $2,258, and $613, respectively during the year ended December 31, 2008. The Company also reversed $2,117 of severance costs that were recorded through purchase accounting in 2006. The following table summarizes the activity for this initiative during the year ended December 31, 2008:

(1)Represents amounts recorded as of the Effective Date for the consummation of the Plan of Reorganization, including the settlement of liabilities subject to compromise, the satisfaction of the DIP Credit Agreement, the incurrence of new indebtedness and related cash payments, the issuances of 7% preferred stock and common stock and the cancellation of the Predecessor’s common stock.

 

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $6,450  $4,210  $—    $10,660 

Expense incurred

   843   2,258   613   3,714 

Cash payments and accrual reversals

   (5,998)  (5,978)  —     (11,976)

Utilization of reserve

   —     —     (613)  (613)
                 

Balance at December 31, 2008

  $1,295  $490  $—    $1,785 
                 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

(2)This adjustment reflects net cash payments recorded as of the Effective Date.

Release of restricted cash(a)

  $482,234  

Cash received from Rights Offering

   355,000  

Payment of prepetition bank debt

   (639,646

Payment of prepetition senior notes

   (105,227

Repayment of DIP Credit Agreement

   (75,777

Other

   (38,226
     

Net cash payments

  $(21,642
     

(a)Includes proceeds from issuance of long term debt held in restricted cash until the Effective Date.

(3)This adjustment reflects the capitalization of $4,895 of debt issuance costs related to the Senior ABL Facility.

(4)This adjustment reflects the settlement of liabilities subject to compromise (see “Liabilities Subject to Compromise” below).

Settlement of liabilities subject to compromise

  $(1,213,781

Liabilities settled by cash(a)

   765,931  

Issuance of Successor common stock, 7% preferred stock and warrants, net

   258,716  

Liabilities reinstated

   26,891  
     

Gain on settlement of liabilities subject to compromise

  $(162,243
     

(a)Cash received from the sale of the Senior Notes and amounts received from the Rights Offering.

(5)This adjustment reflects the cancellation of the Predecessor’s common stock.

(6)This adjustment reflects the cumulative impact of the Reorganization Adjustments discussed above.

Gain on settlement of liabilities subject to compromise

  $(162,243

Cancellation of Predecessor’s common stock

   (356,595

Other

   708  
     
  $(518,130
     

(7)A reconciliation of the reorganization value of the Successor’s common stock as of the Effective Date is shown below:

Reorganization value

  $1,025,000  

Less: Senior Notes

   (450,000

Other debt

   (23,708

7% preferred stock

   (128,000

Plus: Excess cash

   50,000  
     

Reorganization value of Successor’s common stock and warrants

   473,292  

Less: Fair value of warrants(a)

   20,919  
     

Reorganization value of Successor’s common stock

  $452,373  
     

Shares outstanding as of May 31, 2010(b)

   17,489,693  

Per share value(c)

  $25.87  

(a)For further information on the fair value of the warrants, see Note 18. “Capital Stock.”
(b)Does not include restricted shares issued to management upon emergence that vest over 3-4 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

(c)The per share value of $25.87 was used to record the issuance of the Successor’s common stock.

(8)A reconciliation of the reorganization value of the Successor’s assets and goodwill is shown below:

Reorganization value

  $1,025,000  

Plus: Liabilities (excluding debt and after giving effect to fresh-start accounting adjustments)

   660,145  

Fair value of noncontrolling interest

   2,363  

Excess cash

   50,000  
     

Reorganization value of Successor’s assets

   1,737,508  

Less: Successor’s assets (excluding goodwill and after giving effect to fresh-start accounting adjustments)

   1,600,842  
     

Reorganization value of Successor’s assets in excess of fair value—Successor’s goodwill

  $136,666  
     

(9)Represents the adjustment of assets and liabilities to fair value, or other measurement as specified by ASC 805, in conjunction with the adoption of fresh-start accounting. Significant adjustments are summarized below.

Elimination of Predecessor’s goodwill

  $(87,728

Successor’s goodwill

   136,666  

Elimination of Predecessor’s intangible assets

   (10,294

Successor’s intangible asset adjustment(a)

   155,005  

Pension and other postretirement adjustments(b)

   (30,680

Inventory adjustment(c)

   8,136  

Property, plant and equipment adjustment(d)

   40,665  

Investments in non-consolidated affiliates adjustment(e)

   9,021  

Noncontrolling interest adjustments(e)

   (2,182

Elimination of Predecessor’s accumulated other comprehensive loss and other adjustments

   (78,678
     

Pretax income on fresh-start accounting adjustments

   139,931  

Tax related to fresh-start accounting adjustments(f)

   (24,580
     

Net gain on fresh-start accounting adjustments

  $115,351  
     

(a)Intangible assets – This adjustment reflects the fair value of intangible assets determined as of the Effective Date. For further information on the valuation of intangible assets, see Note 7. “Goodwill and Intangibles.”
(b)Defined benefit plans – This adjustment primarily reflects differences in assumptions, such as the expected return on plan assets and the weighted average discount rate related to the payment of benefit obligations, between the prior measurement date of December 31, 2009 and the Effective Date. The $(30,680) is reflected in the following: pension benefits $(21,685), postretirement benefits other than pension $(4,948), other assets $(4,701), accrued payroll $(591) and accrued liabilities $1,245 line items on the Fresh-Start Consolidated Balance Sheet.
(c)Inventory – This amount adjusts inventory to fair value as of the Effective Date, which is estimated for finished goods and work-in-process based upon the expected selling price less cost to complete, selling and disposal cost and a normal selling profit. Raw material inventory was recorded at a carrying value as such value approximates the replacement cost.
(d)Property, plant and equipment – This amount adjusts property, plant and equipment to fair value as of the Effective Date, giving consideration to the highest value and best use of these assets. Fair value estimates were based on independent appraisals. Key assumptions used in the appraisals were based on a combination of income, market and cost approaches, as appropriate.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

(e)Investments in non-consolidated and noncontrolling interests – These amounts adjust investments in non-consolidated affiliates and noncontrolling interests to their estimated fair values. Estimated fair values were based on internal and external valuations using customary valuation methodologies, including comparable earnings multiples, discounted cash flows and negotiated transaction values. The adjustment to investments in non-consolidated affiliates of $9,021 is included in the other assets line item on the Fresh-Start Consolidated Balance Sheet.
(f)Tax expense – This amount reflects the tax expense related to the fair value adjustments of inventory, property, plant and equipment, intangibles, tooling and investments and is included in the other assets $(17,313), accrued liabilities $5,000 and deferred tax liabilities $(12,267) line items on the Fresh-Start Consolidated Balance Sheet.

Liabilities Subject to Compromise

Certain prepetition liabilities were subject to compromise under the Plan of Reorganization and were reported at amounts allowed or expected to be allowed by the Bankruptcy Court. Certain of these claims were resolved and satisfied as of the Effective Date. A summary of liabilities subject to compromise reflected in the Predecessor consolidated balance sheet as of May 31, 2010, is shown below:

Predecessor—May 31, 2010

  

Short-term borrowings

  $85,503  

Accounts payable

   8,007  

Accrued liabilities

   23,433  

Derivatives

   18,081  

Debt subject to compromise

  

Prepetition primary credit facility

   520,637  

Prepetition senior notes

   197,320  

Prepetition senior subordinated notes

   308,009  

Accrued interest

   52,791  
     

Liabilities subject to compromise

  $1,213,781  
     

Reorganization Items and Fresh-Start Accounting Adjustments, net

Reorganization items include expenses, gains and losses directly related to the Debtors’ reorganization proceedings. Fresh-start accounting adjustments reflect the impact of adoption of fresh-start accounting. A summary of reorganization items and fresh-start accounting adjustments, net for the Predecessor period, is shown below:

Pre-tax reorganization items:

  

Professional and other fees

  $48,701  

Gain on prepetition settlement

   (49,980

Gain on settlement of liabilities subject to compromise

   (162,243

Cancellation of Predecessor common stock

   (356,595
     
   (520,117
     

Pre-tax fresh-start accounting adjustments

   (139,931
     

Reorganization items and fresh-start accounting adjustments, net

  $(660,048
     

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

2007 Initiatives5. Restructuring

In May 2007, theThe Company implemented aseveral restructuring action and announcedinitiatives in prior years in connection with the closure of a manufacturing facility located in Mexico and the transfer of related production to other facilities in North America. The closure was substantially completed in 2007. The estimated total cost of this closure is approximately $3,400.America, Europe and Asia. The Company will continuecommenced these initiatives prior to December 31, 2007 and continued to execute the closures through December 31, 2010. The majority of the costs associated with the closures were incurred shortly after the original implementation. However, the Company continues to incur costs untilrelated principally to the facility is sold. Duringliquidation of the yearrespective facilities. The total expense incurred for the five months ended May 31, 2010 and seven months ended December 31, 2008 the Company recognized other exit costs2010 amounted to $470 and asset impairments of $466 and $1,883, respectively, related to this initiative. During the year ended December 31, 2008, the Company reversed $5 of severance costs.

2008 Initiatives$308 respectively.

In July 2008, the Company implemented a restructuring action and announced the closure of two manufacturing facilities, one located in Australia and the other located in Germany. Both closures arewere a result of changes in market demands and volume reductions and are expectedsubstantially completed as of December 31, 2010. However, the Company will continue to be completed in 2009.incur costs until the facilities are sold. The estimated total cost of this initiativethese initiatives is approximately $18,500. The Company recorded severance, other exit costs and asset impairments of $14,455, $149 and $3,282, respectively, during the year ended December 31, 2008.$21,500. The following table summarizes the activity related to these initiatives for this initiative during the yearyears ended December 31, 2008:2009 and December 31, 2010:

 

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $—    $—    $—    $—   

Expense incurred

   14,455   149   3,282   17,886 

Cash payments

   (995)  (149)  —     (1,144)

Utilization of reserve

   —     —     (3,282)  (3,282)
                 

Balance at December 31, 2008

  $13,460  $—    $—    $13,460 
                 
   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2009—Predecessor

  $13,460   $—     $—     $13,460  

Expense

   562    2,557    118    3,237  

Cash payments

   (12,579  (2,322  —      (14,901

Utilization of reserve

   —      —      (118  (118
                 

Balance at December 31, 2009—Predecessor

  $1,443   $235   $—     $1,678  

Expense

   (460  159    —      (301

Cash payments

   (724  (318  —      (1,042
                 

Balance at May 31, 2010

  $259   $76   $—     $335  

Expense

   71    184    423    678  

Cash payments

   (295  (260  —      (555

Utilization of reserve

   —      —      (423  (423
                 

Balance at December 31, 2010—Successor

  $35   $—     $—     $35  
                 

Initial Global Reorganization Initiative

During 2008, the Company commenced the initial phase ofAs a global reorganization in North America and Europe. In connection with this phase, the Company reduced its work force. The estimated total costresult of this initial phase is approximately $7,670. During the year ended December 31, 2008, the Company recorded severance costsinitiative, a pension plan curtailment gain of $7,670 associated with this initiative. The following table summarizes the activity for this initiative$800 was recognized as a reduction to restructuring expense during the year ended December 31, 2008:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2008

  $—    $—    $—    $—   

Expense incurred

   7,670   —     —     7,670 

Cash payments

   (3,741)  —     —     (3,741)

Utilization of reserve

   —     —     —     —   
                 

Balance at December 31, 2008

  $3,929  $—    $—    $3,929 
                 
fourth quarter of 2009.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

During 2008, the Company commenced the initial phase of a reorganization ultimately involving the discontinuation of its global product line operating divisions, formerly called the Body & Chassis Systems division (which included the body sealing and AVS product lines) and the Fluid Systems division, and the establishment of a new operating structure organized on the basis of geographic regions. In 2008,the first quarter of 2009, the Company initiated the closingfinal phase of the reorganization of its operating structure, formally discontinuing its product line operating divisions and putting into place the new operating divisions based on geographic regions. The estimated cost of this initiative is approximately $25,600. The following table summarizes the activity for this initiative for the years ended December 31, 2009 and December 31, 2010:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
   Total 

Balance at January 1, 2009—Predecessor

  $3,929   $—     $—      $3,929  

Expense

   18,704    86    —       18,790  

Cash payments

   (14,862  (86  —       (14,948
                  

Balance at December 31, 2009—Predecessor

  $7,771   $—     $—      $7,771  

Expense

   (450  —      —       (450

Cash payments

   (3,297  —      —       (3,297
                  

Balance at May 31, 2010

  $4,024   $—     $—      $4,024  

Expense

   (444  —      —       (444

Cash payments

   (803  —      —       (803
                  

Balance at December 31, 2010—Successor

  $2,777   $—     $—      $2,777  
                  

As a Europeanresult of these initiatives a curtailment gain related to the other postretirement benefits of $3,404 was recognized as a reduction to restructuring expense during the fourth quarter of 2009.

The Company commenced several initiatives during 2009. These initiatives related to the reorganization or closure of operating facilities in South America, Europe and Asia Pacific. The estimated total cost associated with these actions amounts to $20,700. The following table summarizes the activity for these initiatives for the years ended December 31, 2009 and December 31, 2010:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
  Total 

Balance at January 1, 2009—Predecessor

  $—     $—     $—     $—    

Expense

   9,864    368    —      10,232  

Cash payments

   (5,649  (312  —      (5,961
                 

Balance at December 31, 2009—Predecessor

  $4,215   $56   $—     $4,271  

Expense

   5,168    314    (21  5,461  

Cash payments

   (2,680  (347  21    (3,006
                 

Balance at May 31, 2010

  $6,703   $23   $—     $6,726  

Expense

   —      2,098    45    2,143  

Cash payments

   (5,536  (1,901  —      (7,437

Utilization of reserve

   —      —      (45  (45
                 

Balance at December 31, 2010—Successor

  $1,167   $220   $—     $1,387  
                 

In 2010, the Company initiated the closure of a facility and the idlingconsolidation of other facilities. The estimated total costs of these initiatives amount to $3,100 and are expected to be completed in 2011. As part of this a Canadian facility. During the year ended December 31, 2008, the Company recorded other exit costsEuropean pension plan was frozen and asset impairmentsa curtailment gain of $182 and $896, respectively.

5. Inventories

Inventories are comprised of the following:

   December 31,
2007
  December 31,
2008

Finished goods

  $50,679  $35,069

Work in process

   32,665   26,520

Raw materials and supplies

   71,977   55,363
        
  $155,321  $116,952
        

In connection with the MAPS acquisition,$3,405 was recognized as a $2,455 fair value write-up was recordedreduction to inventory at the date of the acquisition. Such inventory was liquidated as of December 31, 2007 and recorded as an increase to cost of products sold.

In connection with the acquisition of FHS a $2,136 fair value write-up was recorded to inventory at the date of the acquisition. Such inventory was liquidated as of March 31, 2006 and recorded as an increase to cost of products sold.

6. Property, Plant, and Equipment

Property, plant, and equipment is comprised of the following:

   December 31,  Estimated
Useful
   2007  2008  Lives

Land and improvements

  $93,928  $78,548  

Buildings and improvements

   252,026   229,384  15 to 40 years

Machinery and equipment

   631,555   640,350  5 to 14 years

Construction in Progress

   60,279   48,123  
          
   1,037,788   996,405  

Accumulated depreciation

   (315,415)  (372,418) 
          

Property, plant and equipment, net

  $722,373  $623,987  
          

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

restructuring expense during the fourth quarter of 2010. The following table summarizes the activity for these initiatives for the year ended December 31, 2010:

   Employee
Separation
Costs
  Other
Exit
Costs
  Asset
Impairments
   Total 

Balance at January 1, 2010—Predecessor

  $—     $—     $—      $—    

Expense

   595    118    —       713  

Cash payments

   (132  (118  —       (250
                  

Balance at May 31, 2010

  $463   $—     $—      $463  

Expense

   34    1,174    —       1,208  

Cash payments

   (333  (1,174  —       (1,507
                  

Balance at December 31, 2010—Successor

  $164   $—     $—      $164  
                  

6. Property, Plant and Equipment

Property, plant and equipment is stated at cost; however as a result of the adoption of fresh-start accounting, property, plant and equipment was re-measured at estimated fair value as of May 31, 2010, see Note 4. “Fresh-Start Accounting.”

Property, plant and equipment is comprised of the following:

   Predecessor  Successor  Estimated
Useful
Lives
 
   December 31,
2009
  December 31,
2010
  

Land and improvements

  $81,609   $89,633    10 to 25 years  

Buildings and improvements

   240,413    170,280    10 to 40 years  

Machinery and equipment

   696,259    335,300    5 to 10 years  

Construction in Progress

   41,499    52,497   
          
   1,059,780    647,710   

Accumulated depreciation

   (473,601  (58,206 
          

Property, plant and equipment, net

  $586,179   $589,504   
          

During 20082009 it was determined that fixed assets at twoseveral of the Company’s locations were impaired. As a result of this impairment, Property, Plantproperty, plant and Equipmentequipment was reduced by $6,408$3,825 during 2008.2009.

Depreciation expense totaled $107,408 for 2006, $104,199 for 2007, and $109,109 for 2008, respectively.$98,801 for 2009, $35,333 for the five months ended May 31, 2010 and $57,687 for the seven months ended December 31, 2010.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

7. Goodwill and Intangibles

Goodwill

The changes in the carrying amount of goodwill by reportable operating segment for the years ended December 31, 20072009 and 20082010 are summarized as follows:

 

   Body & Chassis  Fluid  Asia Pacific  Total 

Balance at January 1, 2007

  $152,324  $281,891  $1,421  $435,636 

Adjustments to the Acquisition of FHS

   —     (670)  —     (670)

Acquisition of El Jarudo

   —     457   —     457 

Impairment charge

   —     (142,925)  —     (142,925)

Other

   1,512   (3,422)  —     (1,910)
                 

Balance at December 31, 2007

  $153,836  $135,331  $1,421  $290,588 

Adjustments to the Acquisition of El Jarudo

   —     (379)  —     (379)

Purchase price adjustments pre-acquisition

   (15,170)  (6,937)  —     (22,107)

Impairment charge

   (1,251)  (21,890)  —     (23,141)
                 

Balance at December 31, 2008

  $137,415  $106,125  $1,421  $244,961 
                 
   North America  International  Total 

Balance at January 1, 2009—Predecessor

  $181,308   $63,653   $244,961  

Impairment charge

   (93,580  (63,653  (157,233
             

Balance at December 31, 2009—Predecessor

  $87,728   $—     $87,728  

Fresh-start accounting adjustments (Note 4)

   28,778    20,160    48,938  
             

Balance at May 31, 2010 —Successor

  $116,506   $20,160   $136,666  

Foreign exchange translation and other

   (1,122  1,456    334  
             

Balance at December 31, 2010—Successor

  $115,384   $21,616   $137,000  
             

The pre-acquisition purchase price adjustmentsGoodwill is not amortized but is tested annually for impairment, or when events or circumstances indicate that impairment may exist, by reporting units, which are determined in accordance with ASC Topic 350. During the second quarter of 2009, several events occurred that indicated potential impairment of the Company’s goodwill. Such events included: (a) the Chapter 11 bankruptcy of both Chrysler and GM and unplanned plant shut-downs; (b) continued product volume risk and negative product mix changes; (c) the Company’s commencement of negotiations with its sponsors, senior secured lenders, and bondholders to recapitalize its long term debt and equity; (d) the Company’s recognition as the second quarter progressed that there was an increasing likelihood that it would breach its financial covenants under its prepetition credit agreement; (e) the Company’s decision to defer its June 15, 2009 interest payment on its prepetition senior and senior notes pending the outcome of its quarterly financial results; (f) an analysis of whether the Company would meet its financial covenants for the periodpast quarter; and (g) negotiations with its various constituencies. As a result of the combination of the above factors in the second quarter, the Company significantly reduced its projections for the remainder of the year. This significant decrease in projections resulted in the carrying value of assets at all of the Company’s reporting units being greater than the related reporting units’ fair value. As a result, the Company recorded goodwill impairment charges of $93,580 in its North America reporting unit, $39,604 in its Europe reporting unit, $22,628 in its South America reporting unit and $1,421 in its Asia Pacific reporting unit during the second quarter of 2009. Our 2010 annual goodwill impairment analysis resulted in no impairment.

Other Intangible Assets

During the second quarter of 2009, the Company assessed the realization of its intangible assets in connection with revisions to the Company’s projections as a result of the negotiations associated with the bankruptcy. The Company’s undiscounted cash flows (as adjusted to reflect the current outlook) were not sufficient to support the realization of certain intangible assets. As a result the Company performed discounted cash flow analysis for each intangible asset and determined that the fair value of certain intangible assets exceeded the assets’ respective fair value. During the second quarter of 2009, the Company recorded intangible impairment charges of $148,143 in its North America segment and $54,295 of intangible impairment charges in its International segment. The following table shows the impairment by intangible asset type:

Customer contracts

  $68,177  

Customer relationships

   131,364  

Developed technology

   1,558  

Trademarks and tradenames

   1,339  
     

Total intangible impairment

  $202,438  
     

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

The following table presents the Predecessor’s intangible assets and accumulated amortization balances as of December 31, 2009:

   Gross
Carrying
Amount
   Accumulated
Amortization
  Net
Carrying
Amount
   Weighted
Average Useful
Life (Years)
 

Developed technology

  $3,335    $(1,479 $1,856     4.6  

Other

   8,986     (293  8,693    
                

Balance at December 31, 2009—Predecessor

  $12,321    $(1,772 $10,549     4.6  
                

Amortization expense totaled $30,996 and $14,976 for the years ended December 2008 and 2009, respectively.

In connection with the adoption of fresh-start accounting, the Company, with the assistance of independent appraisal, valued certain intangible assets at their estimated fair value, as of May 31, 2010. The value assigned to developed technology intangibles is based on the royalty savings method, which applies a hypothetical royalty rate to projected revenues attributable to the identified technologies. Royalty rates were determined based on analysis of market information. The customer-based intangible asset includes the Company’s established relationship with its customers and the ability of these customers to generate future economic profits for the Company. A summary of intangible assets as of December 31, 2010 is shown below:

   Gross
Carrying
Amount
   Accumulated
Amortization
  Net
Carrying
Amount
   Weighted
Average Useful
Life (Years)
 

Customer relationships

  $140,124    $(8,035 $132,089     9.6  

Developed technology

   9,600     (938  8,662     5.7  

Other

   8,979     (88  8,891    
                

Balance at December 31, 2010—Successor

  $158,703    $(9,061 $149,642     9.2  
                

Amortization expense totaled $319 and $8,982 for the five months ended May 31, 2010 and the seven months ended December 31, 2008 represent adjustments2010, respectively. Estimated amortization expense will total approximately $15,500 over each of the next five years.

8. Debt

Outstanding debt consisted of the following at December 31, 2009 and 2010:

   Predecessor  Successor 
   December 31,
2009
  December 31,
2010
 

Senior Notes

  $—     $450,000  

DIP Credit Agreement

   175,000    —    

Other borrowings

   29,263    26,723  
         

Total debt

  $204,263   $476,723  

Less: Current portion of long term debt

   (18,204  (19,965

DIP Credit Agreement

   (175,000  —    
         

Total long-term debt

  $11,059   $456,758  
         

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

8 1/2% Senior Notes due 2018

On May 11, 2010, CSA Escrow Corporation (the “Escrow Issuer”), an indirect wholly-owned non-Debtor subsidiary of CSA U.S., sold $450,000 aggregate principal amount of the Senior Notes. On the Effective Date, the Escrow Issuer was merged with and into CSA U.S. and CSA U.S. assumed the obligations under the Senior Notes and the Senior Notes indenture and the guarantees by the guarantors described below became effective. Proceeds from the Senior Notes, together with proceeds of the Rights Offering and cash on hand, were used to pay claims under the Predecessor’s prepetition credit agreement, the DIP Credit Agreement and the portion of the Predecessor’s prepetition senior notes payable in cash, in full, together with related fees and expenses.

The Senior Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by Cooper-Standard Holdings Inc. and all of CSA U.S.’s wholly-owned domestic restricted subsidiaries (collectively, the “guarantors” and together with CSA U.S., the “obligors”). If CSA U.S. or any of its domestic restricted subsidiaries acquires or creates another wholly-owned domestic restricted subsidiary that guarantees certain debt of CSA U.S. or a guarantor, such newly acquired or created subsidiary is also required to various tax matters guarantee the Senior Notes. The Senior Notes bear an interest rate of 8 1/2%and were recordedmature on May 1, 2018. Interest is payable semi-annually on May 1 and November 1.

The Senior Notes and each guarantee constitute senior debt of the CSA U.S. and each guarantor, respectively. The Senior Notes and each guarantee (1) rank equally in accordanceright of payment with EITF Issue No. 93-7 “Uncertainties Relatedall of the applicable obligor’s existing and future senior debt, (2) rank senior in right of payment to Income taxesall of the applicable obligor’s existing and future subordinated debt, (3) are effectively subordinated in a Purchase Business Combination”right of payment to all of the applicable obligor’s existing and restructuring accrual reversals relatedfuture secured indebtedness and secured obligations to the FHS acquisition.extent of the value of the collateral securing such indebtedness and obligations and (4) are structurally subordinated to all existing and future indebtedness and other liabilities of CSA U.S.’s non-guarantor subsidiaries (other than indebtedness and liabilities owed to CSA U.S. or one of the guarantors).

DuringCSA U.S. has the fourth quarterright to redeem the Senior Notes at the redemption prices set forth below:

on and after May 1, 2014, all or a portion of 2008, the Company recorded an impairment chargeSenior Notes may be redeemed at a redemption price of $21,890104.250% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2014, 102.125% of the principal amount thereof if redeemed during the twelve-month period beginning on May 1, 2015, and 100% of the principal amount thereof if redeemed on or after May 1, 2016, in our International Fluid reporting uniteach case plus any accrued and unpaid interest to the redemption date;

prior to May 1, 2013, up to 35% of our Global Fluid segmentthe Senior Notes issued under the Senior Notes indenture may be redeemed with the proceeds from certain equity offerings at a redemption price of 108.50% of the principal amount thereof, plus any accrued and an impairment chargeunpaid interest to the redemption date; and

prior to May 1, 2014, all or a portion of $1,251the Senior Notes may be redeemed at a price equal to 100% of the principal amount thereof, plus a make-whole premium.

If a change of control occurs with respect to Cooper-Standard Holdings Inc. or CSA U.S., unless CSA U.S. has exercised its right to redeem all of the outstanding Senior Notes, each noteholder shall have the right to require that CSA U.S. repurchase such noteholder’s Senior Notes at a purchase price in our Body & Chassis International reporting unitcash equal to 101% of our Global Body & Chassis segment. These charges are a resultthe principal amount thereof plus accrued and unpaid interest, if any, to the date of a weakening global economy, a global decline in vehicle production volumespurchase, subject to the right of the noteholders of record on the relevant record date to receive interest due on the relevant interest payment date.

The Senior Notes indenture limits, among other things, the ability of CSA U.S. and changes in product mix.

During the fourth quarter of 2007, the Company recorded an impairment charge of $142,925 in our North America Fluid reporting unit of our Global Fluid segment. This charge was a result of lower production volumes in key North America platforms, changes in the production mix, higher raw material costs and customer price concessions.

its restricted subsidiaries (currently, all majority owned subsidiaries) to pay dividends or make distributions, repurchase equity, prepay subordinated debt or make certain investments, incur additional debt or issue certain disqualified stock or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

preferred stock, sell assets, incur liens, enter into transactions with affiliates and allow to exist certain restrictions on the ability of a restricted subsidiary to pay dividends or to make other payments or loans to or transfer assets to CSA U.S. in each case, subject to certain exclusions and other customary exceptions. The following table presents intangible assets,Senior Notes indenture also limits the ability of CSA U.S., Cooper-Standard Holdings Inc. and a subsidiary guarantor to merge or consolidate with another entity or sell all or substantially all of its assets. In addition, certain of these covenants will not be applicable during any period of time when the Senior Notes have an investment grade rating. The Senior Notes indenture contains customary events of default.

The Senior Notes were initially issued in a private placement which are amortized on a straight line basis, and accumulated amortization balanceswas exempt from registration under the Securities Act. Pursuant to the terms of the registration rights agreement between the issuer, the guarantors and the initial purchasers of the Senior Notes, the Company consummated a registered exchange offer in February 2011, pursuant to which they exchanged all $450,000 principal amount of the outstanding privately placed Senior Notes, or “old notes,” for $450,000 principal amount of new 8 1/2% Senior Notes due 2018, or “exchange notes.” The exchange notes were issued under the same indenture as the old notes and are identical to the old notes, except that the new notes have been registered under the Securities Act. References herein to the “Senior Notes” refer to the old notes prior to the consummation of the exchange offer and to the exchange notes thereafter.

Senior ABL Facility

On the Effective Date, the Company, CSA U.S., CSA Canada (together with CSA U.S., the “Borrowers”) and certain subsidiaries of CSA U.S. entered into the Senior ABL Facility with certain lenders, Bank of America, N.A., as agent (the “Agent”), for such lenders, Deutsche Bank Trust Company Americas, as syndication agent, and Banc of America Securities LLC, Deutsche Bank Securities Inc., UBS Securities LLC and Barclays Capital, as joint lead arrangers and bookrunners. The Senior ABL Facility provides for an aggregate revolving loan availability of up to $125,000, subject to borrowing base availability, including a $45,000 letter of credit sub-facility and a $20,000 swing line sub-facility. The Senior ABL Facility also provides for an uncommitted $25,000 incremental loan facility, for a potential total Senior ABL Facility of $150,000 (if requested by the Borrowers and any existing lenders or new lenders agree to fund such increase). No consent of any lender (other than those participating in the increase) is required to effect any such increase. As of December 31, 20072010, no amounts were drawn under the Senior ABL Facility, but there was approximately $33,242 of letters of credit outstanding.

Any borrowings under the Senior ABL Facility will mature, and 2008, respectively:the commitments of the lenders under the Senior ABL Facility will terminate, on May 27, 2014. Proceeds from the Senior ABL Facility were used by the Borrowers to pay certain secured and unsecured claims, administrative expenses and administrative claims as contemplated by the Plan of Reorganization. Proceeds of the Senior ABL Facility may also be used to issue commercial and standby letters of credit, to finance ongoing working capital needs and for general corporate purposes. Loan (and letter of credit) availability under the Senior ABL Facility is subject to a borrowing base, which at any time is limited to the lesser of: (A) the maximum facility amount (subject to certain adjustments) and (B) (i) up to 85% of eligible accounts receivable; plus (ii) up to the lesser of 70% of eligible inventory or 85% of the appraised net orderly liquidation value of eligible inventory; minus reserves established by the Agent. The accounts receivable portion of the borrowing base is subject to certain formulaic limitations (including concentration limits). The inventory portion of the borrowing base is limited to eligible inventory, as determined by an independent appraisal. The borrowing base is also subject to certain reserves, which are established by the Agent (which may include changes to the advance rates indicated above). Loan availability under the Senior ABL Facility is apportioned, as follows: $100,000 to CSA U.S. and $25,000 to CSA Canada.

   Gross
Carrying
Amount
  Accumulated
Amortization
  Net
Carrying
Amount
  Amortization
Period

Customer contracts

  $157,897  $(59,100) $98,797  7 to 9 years

Customer relationships

   171,291   (25,484)  145,807  15 to 20 years

Developed technology

   14,466   (4,603)  9,863  5 to 12 years

Trademarks and tradenames

   1,700   (199)  1,501  12 to 20 years

Other

   2,755   (2,465)  290  
              

Balance at December 31, 2007

  $348,109  $(91,851) $256,258  
              

Customer contracts

  $156,039  $(78,100) $77,939  7 to 9 years

Customer relationships

   169,105   (33,669)  135,436  15 to 20 years

Developed technology

   6,421   (2,204)  4,217  5 to 12 years

Trademarks and tradenames

   1,700   (306)  1,394  12 to 20 years

Other

   11,358   (2,891)  8,467  
              

Balance at December 31, 2008

  $344,623  $(117,170) $227,453  
              

DuringThe obligations of CSA U.S. under the fourth quarter of 2008Senior ABL Facility and cash management arrangements and interest rate, foreign currency or commodity swaps entered into by the Company, recorded intangible impairment charges of $2,253 and $1,567 related to Fluid and Body & Chassis technology, respectively. Based on a discounted cash flow analysis it was determined that these intangible assets exceeded their fair value and impairment charges were recorded.

Duringin each case with the fourth quarter of 2007 the Company recorded intangible impairment charges of $3,441 related to Fluid Developed technology and Tradenames. Based on a discounted cash flow analysis it was determined that these intangible assets exceeded their fair value and an impairment charge was recorded.

Amortization expense totaled $31,025 for 2006, $31,850 for 2007, and $30,996 for 2008. Estimated amortization expense will total approximately $31,000 over each of the next five years.

lenders

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

8. Debt

Outstanding debt consisted of the following at December 31, 2007 and 2008:

   December 31,
2007
  December 31,
2008
 

Senior Notes

  $200,000  $200,000 

Senior Subordinated Notes

   330,500   323,350 

Term Loan A

   40,062   25,036 

Term Loan B

   67,033   66,365 

Term Loan C

   167,531   165,805 

Term Loan D

   186,200   184,300 

Term Loan E

   93,508   88,458 

Revolving Credit Facility

   —     60,933 

Capital leases and other borrowings

   55,327   29,848 
         

Total debt

   1,140,161   1,144,095 

Less: debt payable within one year

   (51,999)  (94,136)
         

Total long-term debt

  $1,088,162  $1,049,959 
         

In connection with the 2004 Acquisition, Cooper-Standard Automotive Inc. issued Senior Notes and Senior Subordinated Notes in a private offering and entered into new Senior Credit Facilities. The Senior Notes and Senior Subordinated Notes bear interest at rates of 7.0% and 8.375%their affiliates (collectively “Additional ABL Secured Obligations”), respectively, and mature on December 15, 2012 and 2014, respectively. Interest is payable semi-annually on June 15 and December 15. Cooper-Standard Holdings Inc. has fully and unconditionally guaranteed the Senior Notes and Senior Subordinated Notes. The Senior Notes are guaranteed on a senior unsecuredsecured basis by the Company and all of our U.S. subsidiaries (other than CS Automotive LLC), and the obligations of CSA Canada under the Senior Subordinated NotesABL Facility and Additional ABL Secured Obligations of CSA Canada and its Canadian subsidiaries are guaranteed on a senior subordinatedsecured basis by substantiallythe Company, all of the Canadian subsidiaries of CSA Canada and all of the Company’s U.S. subsidiaries. CSA U.S. guarantees the Additional ABL Secured Obligations of its subsidiaries and CSA Canada guarantees the Additional ABL Secured Obligations of its Canadian subsidiaries. The obligations under the Senior ABL Facility and related guarantees are secured by a first priority lien on all of each Borrower’s and each guarantor’s existing and future wholly-owned domestic subsidiaries. Frompersonal property consisting of accounts receivable, payment intangibles, inventory, documents, instruments, chattel paper and after December 15, 2008, the Company has the option to redeem some or allinvestment property, certain money, deposit accounts and securities accounts and certain related assets and proceeds of the Senior Notes at premiums beginning at 103.5% and declining each year to face value for redemptions taking place after December 15, 2010. Prior to December 15, 2009, the Company has the option to redeem some or all offoregoing.

Borrowings under the Senior Subordinated Notes subject to a formula as defined in the applicable agreements. After December 15, 2009, the Company has the option to redeem some or all of the Senior Subordinated Notes at premiums that begin at 104.2% and decline each year to face value for redemptions taking place after December 15, 2012.

During the first quarter of 2008, the Company purchased and retired $7,150 of its $330,500 outstanding Senior Subordinated Notes on the open market. The purchase was accounted for as an extinguishment of debt and, accordingly, $1,696 was recognized as a gain on debt extinguishment, after writing off the related unamortized debt issuance costs. The gain is included in other income (expense) in the consolidated statement of operations.

The Senior Credit Facilities consist of a revolving credit facility and various senior term loan facilities with maturities in 2010 and 2011, including Term Loan B, which is a U.S. dollar-denominated obligation of our Canadian subsidiary. The revolving credit facility provides for borrowings up to $125,000 including the availability of letters of credit, a portion of which is also available in Canadian dollars and bearsABL Facility bear interest at a rate equal to, at the Borrowers’ option:

in the case of borrowings by the U.S. Borrower, LIBOR or the base rate plus, in each case, an applicable margin plus, atmargin; or

in the Company’s option, either (a) a basecase of borrowings by the Canadian Borrower, BA rate, determined by reference to the higher of (1) theCanadian prime rate or (2) the federal fundsCanadian base rate plus, 0.5% or (b) LIBOR rate determined by referencein each case, an applicable margin.

The applicable margin may vary between 3.25% and 3.75% with respect to the costs of funds for depositsLIBOR or BA-based borrowings and between 2.25% and 2.75% with respect to base rate, Canadian prime rate and Canadian base rate borrowings. The applicable margin is subject, in each case, to quarterly pricing adjustments based on usage over the applicable currency for theimmediately preceding quarter.

In addition to paying interest period relevant to such borrowing adjusted for certain additional costs. Interest is generally due quarterly in arrears and is also due upon the expiration of any particular loan. Interest rateson outstanding principal under the Senior Credit Facilities averaged 7.5% during 2008. WeABL Facility, the Borrowers are required to pay a fee in respect of committed but unutilized commitments equal to 0.50% per annum when usage of the Senior ABL Facility (as apportioned between the U.S. and Canadian facilities) is greater than 50% and 0.75% per annum when usage of the Senior ABL Facility is equal to or less than 50%. The Borrowers are also required to pay a commitment fee in respecton outstanding letters of credit under the undrawn portion of the revolving commitmentsSenior ABL Facility at a rate equal to 0.5%the applicable margin in respect of LIBOR based borrowings plus a fronting fee at a rate of 0.125% per annum to the issuer of such letters of credit, together with customary issuance and customaryother letter of credit fees. The Senior ABL Facility also requires the payment of customary agency and administrative fees.

The Borrowers are able to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans, in each case, in whole or in part, at any time without premium or penalty (other than customary breakage and related reemployment costs with respect to repayments of LIBOR-based borrowings).

The Senior ABL Facility includes affirmative and negative covenants that impose substantial restrictions on the Company’s financial and business operations, including our ability to incur and secure debt, make investments, sell assets, pay dividends or make acquisitions. The Senior ABL Facility also includes a requirement to maintain a monthly fixed charge coverage ratio of no less than 1.1 to 1.0 when availability under the Senior ABL Facility is less than specified levels. The Senior ABL Facility also contains various events of default that are customary for comparable facilities.

Prepetition Debt

The filing of the Chapter 11 Cases by the Debtors on August 3, 2009 constituted a default or otherwise triggered repayment obligations under substantially all prepetition debt obligations of the Debtors, and as a result, the loan commitments of the lenders under the Predecessor’s prepetition credit agreement were terminated

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

Lehman Commercial Paper, Inc. (LCPI) had a $10,000 commitment to the Company as part of our $125,000 revolving credit facility. LCPI recently filed for bankruptcy protection and the revolver availability was effectively reduced by their position, therefore the revolving credit facility currently provides for borrowings up to $115,000. The Company is seeking to have this commitment replaced by another financial institution.

The Company had $60,933 of outstanding borrowingsall principal and $24,003 of standby letters of creditaccrued and unpaid interest outstanding under the Revolvingprepetition credit agreement and the Predecessor’s prepetition notes accelerated and became due and payable (subject to the automatic stay under Chapter 11). As of the date of the filing of the Chapter 11 Cases, approximately $608,000 of principal and accrued and unpaid interest was outstanding under the Predecessor’s prepetition credit agreement, approximately $208,800 of principal and accrued and unpaid interest was outstanding under the Predecessor’s prepetition 7% senior notes due 2012 and approximately $329,900 of principal and accrued and unpaid interest was outstanding under the Predecessor’s prepetition 8 3/8% senior subordinated notes due 2014. Approximately $639,600 of claims under the Predecessor’s prepetition credit agreement were paid in full in cash on the Effective Date with proceeds of the Company’s exit financing and obligations under the Predecessor’s prepetition credit agreement were cancelled. Holders of the Predecessor’s prepetition senior notes were paid in full in cash on the Effective Date, except that certain of the noteholders received a distribution of common stock in lieu of the cash payment for certain of their prepetition senior note claims. Holders of the prepetition senior subordinated notes were issued 8% of our outstanding common stock and warrants to purchase, in the aggregate, 3% of our outstanding common stock (in each case, assuming the conversion of our 7% preferred stock). Obligations under both the Predecessor’s prepetition senior notes and prepetition senior subordinated notes were cancelled.

DIP Credit FacilityAgreement

On August 5, 2009, the Bankruptcy Court entered an interim order approving debtor-in-possession financing on an interim basis. Pursuant to this interim order, the Predecessor entered into a Debtor-In-Possession Credit Agreement, dated as of December 31, 2008, leaving $30,064 of undrawn availability, the majority of which was drawn during the first quarter of 2009. IfAugust 5, 2009 (the “Initial DIP Credit Agreement”), among the Company, is successful in replacingCSA U.S., and CSA Canada, various lenders party thereto, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, Banc of America Securities LLC, General Electric Capital Corporation and UBS Securities LLC, as co-syndication agents, Deutsche Bank Trust Company Americas, as documentation agent, Deutsche Bank Securities Inc. and General Electric Capital Corporation, as joint lead arrangers and book runners, and Banc of America Securities LLC and UBS Securities LLC, as co-arrangers. The Predecessor received final approval of the LCPI commitmentInitial DIP Credit Agreement from the undrawn availability would increase by $10,000.

Bankruptcy Court on September 1, 2009. The Predecessor received approval of the Initial DIP Credit Agreement from the Canadian Court on August 6, 2009. The Initial DIP Credit Agreement was amended on August 31, 2009 and September 11, 2009. Both amendments primarily updated some post-closing non-U.S. collateral delivery requirements. In addition, on December 2, 2009, Metzeler Automotive Profile Systems GmbH, a German limited liability company (the “German Borrower” and together with CSA U.S. and CSA Canada, the “DIP Borrowers”), became an additional borrower under the Initial DIP Credit Agreement. Under the Initial DIP Credit Agreement, the DIP Borrowers borrowed an aggregate of $175,000 principal amount of superpriority senior secured term loans amortize quarterlyin order to finance their operating, working capital and other general corporate needs (including the payment of fees and expenses in accordance with the orders of the Bankruptcy Court and the Canadian Court authorizing such borrowings). The Initial DIP Credit Agreement also provided for an ability to incur up to an aggregate of $25,000 in uncommitted incremental debt.

In order to refinance the Initial DIP Credit Agreement on terms more favorable to the Predecessor, on December 18, 2009 the Predecessor entered the DIP Credit Agreement, among the Company, the DIP Borrowers, various lenders party thereto, Deutsche Bank Trust Company Americas, as the administrative agent (in such capacity, the “DIP Agent”), collateral agent and documentation agent, and Deutsche Bank Securities Inc., as syndication agent, sole lead arranger and book runner. Under the DIP Credit Agreement, the lenders party thereto committed to provide superpriority senior secured term loans to the DIP Borrowers in an aggregate principal amount of up to $175,000, subject to certain formulae contained in the agreements.conditions. The SeniorDIP Credit Facilities are unconditionally guaranteed onAgreement also provided for an additional uncommitted $25,000 incremental facility, for a senior secured basis by the Company and, subjecttotal DIP facility of up to certain exceptions, substantially all existing and future domestic subsidiaries$200,000.

The Predecessor prepaid $25,000 of the Company and the Company’s Canadian subsidiaries in the case of Term Loans A and B and Canadian dollar borrowings under the revolving credit facility. In addition, all obligations under the SeniorDIP Credit FacilitiesAgreement on each of January 29, 2010, March 26, 2010, April 20, 2010, and the guarantees of those obligations are secured by substantially all the assets of the Company, subject to certain exceptions.

The Senior Credit Facilities and Senior Notes and Senior Subordinated Notes contain covenants that, among other things, restrict, subject to certain exceptions, the ability to sell assets, incur additional indebtedness, repay other indebtedness (including the Senior Notes and Senior Subordinated Notes), pay certain dividends and distributions or repurchase capital stock, create liens on assets, make investments, loans or advances, make certain acquisitions, engage in mergers or consolidations, enter into sale and leaseback transactions, or engage in certain transactions with affiliates.May 18, 2010. In addition, the Senior Credit Facilities contain the following financial covenants: a maximum senior secured leverage ratio, and a maximum capital expenditures limitation and require certain prepayments from excess cash flows, as defined and in connection with certain asset sales and the incurrence of debt not permitted under the Senior Credit Facilities for periods commencing DecemberCompany repaid $188 on March 31, 2008. As of December 31, 2007 and 2008, the Company was in compliance with all of its financial covenants.

As discussed in part 1, Item 1A “Risk Factors”, there are several risks and uncertainties related to the global economy and our industry that could materially impact our liquidity. Among potential outcomes, these risks and uncertainties could result in decreased operating results, limited access to credit and failure to comply with debt covenants.

During the second half of 2008, vehicle production volumes decreased significantly resulting in a decline in sales, operating income and EBITDA. This decline in operating results reduced cushion that existed within our restrictive financial covenants and increased the risk of a future debt covenant violation. As previously noted the future compliance of debt covenants will be dependent upon, amongst other matters, future vehicle production and our ability to implement the costs savings initiatives announced during the second half of 2008 and the first quarter of 2009.

Our current revenue forecast for 2009 is determined from specific platform volume projections consistent with a North American and European light vehicle production estimate of 9,275 units and 16,700 units, respectively. Changes to the total level of light vehicle production levels could have a negative impact on our future sales, liquidity, results of operations and ability to comply with debt covenants. We have taken significant actions during the second half of 2008 and first quarter of 2009 to reduce our cost base and improve profitability. Based on our current 2009 operating forecast and the impact of our cost reductions on our 2009 forecasted debt covenant calculation, we expect to comply with all debt covenants during 2009. While we believe the vehicle production and other assumptions within our forecast are reasonable, we have also considered the possibility of even weaker demand based primarily on a further decline in North

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

American light vehicle production (to approximately 8 million units). In addition to the potential impact of light vehicle production changes on our sales, achieving our EBITDA forecast and 2009 debt covenant thresholds are dependent upon a number of other external and internal factors such as changes in raw material costs, changes in foreign currency rates, our ability to execute our cost savings initiatives, and our ability to implement and achieve the savings expected by the change in operating structure.

We have also considered the potential consequences of a bankruptcy filing of one of our major North American customers and believe that a bankruptcy filing would not materially impact our 2009 forecast and our ability to meet 2009 debt covenants. In the event of a bankruptcy filing, we believe it is likely that most of our programs would be continued and any reduction in program volume of a bankrupt customer would be replaced with volume from other existing customers. As such, we expect the adverse effects of these bankruptcies would be limited principally to recovering less than the full amount of the outstanding receivables. We believe that a loss or expenses incurred as a result of a customer bankruptcy would be treated as an adjustment for our 2009 debt covenants and do not believe the trade receivable exposure would have a significant impact on our 2009 liquidity.

While we are confident of our ability to achieve the plan, there can be no assurance we will be successful. There are a number of factors that could potentially arise that could result in a violation of our debt covenants. Non-compliance with covenants would provide our lenders the ability to demand immediate repayment of all outstanding borrowings under the Term Facility and the Revolving Facility. We would not have sufficient cash on hand to satisfy this demand. Accordingly, the inability to comply with covenants, obtain waivers for non-compliance, cure a potential violation with the support of our shareholders, or obtain alternative financing would have a material adverse effect on our financial position, results of operations and cash flows. In the event we were unable to meet our debt requirements, however, we believe we would be able to cure the violation utilizing the equity cure right provision of our primary credit facility, obtain a waiver or amend the covenants. Executing the equity cure right provision is contingent upon our shareholders. Obtaining waivers or amendments would likely result in a significant incremental cost. Although we cannot provide assurance that we would be successful in obtaining the necessary waivers or in amending the covenants, we were able to do so in previous years and are confident that we would be able to do so in 2009, if necessary.

Based on our current forecast and our assessment of reasonably possible scenarios, including the more pessimistic scenarios related to production volumes described above, we do not believe that there is substantial doubt about our ability to continue as a going concern in 2009.

2010. The Company along with its joint venture partner, Nishikawa Rubber Company, has provided a guarantee of a portion of the bank loans of its NISCO joint venture. On July 1, 2003, the joint venture entered into an additional bank loan with the joint venture partners each guaranteeing an equal portion of the amount borrowed. Proceeds from the loan were used primarily to make distributions to the joint venture partners. As of December 31, 2007 and 2008, the Company has no liability related to the guarantee of this debt. The Company’s maximum exposure under the two guarantee arrangements at both December 31, 2007 and 2008remaining balance was approximately $500 and $0, respectively.

The Company uses a global cash management vehicle to pool excess cash from domestic and foreign subsidiaries and present on a net basis as cashrepaid on the balance sheets of such subsidiaries. At December 31, 2007Effective Date, at which time the DIP Credit Agreement was cancelled and 2008, the Company’s net cash balances under this arrangement were $235 and $1,813, respectively. terminated, including all agreements related thereto.

Other borrowings at December 31, 20072009 and 20082010 reflect borrowings under capital leases and local bank lines, including $35,513$15,075 and $11,809$17,419 of short-term notes payable, respectively, classified in debt payable within one year on the consolidated balance sheet.

On July 26, 2007,The maturities of debt at December 31, 2010 are as follows:

2011

  $19,965  

2012

   3,100  

2013

   2,814  

2014

   317  

2015

   237  

Thereafter

   450,290  
     
  $476,723  
     

Interest paid on third party debt was $95,419, $57,851, $31,898 and $20,508 for 2008, 2009, the Company entered into a Second Amendment tofive months ended May 31, 2010 and the Credit Agreement (the “Second Amendment”). The Second Amendment permitted the MAPS acquisition and allowed the Company to borrow up to €65,000 through an incremental term loan under the Credit Agreement (as amended) to provide a portion of the funding necessary for the MAPS acquisition and to pay related fees and expenses.

seven months ended December, 31 2010, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

The Second Amendment also expanded the dual currency borrowing sub limit under the Revolving Credit Agreement to $35,000 and added Cooper-Standard International Holdings BV as a permitted borrower under this sub limit. The Second Amendment includes other changes which increase the Company’s financial and operating flexibility, including amended financial covenants, expanded debt and investment baskets, and the ability to include the results of our non-consolidated joint ventures in the covenant calculations, among other things.

To finance part of the MAPS acquisition the Company borrowed €44,000 under the Second Amendment. This borrowing was combined with the Euro tranche of the Term Loan D to create Term Loan E and as of December 31, 2008 had an outstanding balance of €63,443. The Company also borrowed $10,000 under the Primary Revolving Credit Agreement, which was repaid in its entirety by September 30, 2007. In addition the Company borrowed €15,000 under the dual-currency sub limit of the revolver, all of which was repaid in its entirety by December 31, 2007.

During the year ended December 31, 2007, the Company made voluntary prepayments totaling $15,000 on the Term Loan B facility and $7,000 on the Term Loan C facility.

On April 17, 2008, the Company finalized an amendment to a factoring agreement existing between MAPS Italy and an Italian factoring company. The amendment changed certain terms and conditions within the agreement, which allows certain factored receivables to be treated as true sales. Receivables factored under this arrangement are not included in the Company’s consolidated accounts receivable and debt totals. At December 31, 2007, prior to the amendment of the factoring arrangement, MAPS Italy had outstanding factored receivables of approximately $23,500 equivalent included in capital leases and other borrowings in the table above.

The maturities of debt at December 31, 2008 are as follows and include the estimated amortization of the term loans:

2009

  $94,136

2010

   32,073

2011

   494,536

2012

   200,000

2013

   —  

Thereafter

   323,350
    
  $1,144,095
    

Interest paid on third party debt was $89,694, $91,764 and $95,419 for 2006, 2007, and 2008, respectively.

On December 18, 2008, the Company entered into a Third Amendment to the Credit Agreement (the “Third Amendment”). The Third Amendment provides that the Company and/or its Canadian subsidiary may voluntarily prepay up to a maximum of $150,000 of one or more tranches of its term loan debt under the Credit Agreement held by participating lenders at a discount price to par to be determined pursuant to certain auction procedures. The prepayments may be financed with cash of the Company and its Subsidiaries if they meet, on a consolidated basis, certain conditions set forth in the Third Amendment including a $125,000 minimum liquidity requirement (which amount includes cash and cash equivalents and any amounts available to be drawn under the Credit Agreement’s revolving credit facility). Such prepayments may not be made from the proceeds of loans drawn under the Credit Agreement’s revolving credit facility. The prepayments may also be financed with the proceeds of certain equity contributions from holders of equity of the Company. Under the terms of the Third Amendment, any such prepayments will reduce the amount of term loans outstanding and payable in indirect order of maturity.

9. Pensions

The Company maintains defined benefit pension plans covering substantially all employees located in the United States. Benefits generally are based on compensation, length of service and age for salaried employees and on length of service for hourly employees. The Company’s policy is to fund pension plans such that sufficient assets will be available to meet future benefit requirements. Independent actuaries are

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

engaged by the Company to assist in the determination of pension costs for each subsidiary of the Company. The Company also sponsors defined benefit pension plans for employees in some of its international locations.

The Company also sponsors defined contribution pension plans for certain salaried and hourly U.S. employees of the Company. Participation is voluntary. The Company matches contributions of participants, up to various limits based on its profitability, in substantially all plans. MatchingIn 2010, the Company began offering a new retirement plan that includes Company non-elective contributions. Non-elective and matching contributions under these plans totaled $2,151 in 2006, $3,872 in 2007, and $2,549 in 2008.2008, $602 in 2009, $3,324 for the five months ended May 31, 2010 and $6,581 for the seven months ended December 31, 2010.

The following tables disclose information related to the Company’s defined benefit pension plans.

 

  Predecessor  Successor 
  2007 2008   Year Ended
December 31, 2009
 Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 
  U.S. Non-U.S. U.S. Non-U.S.   U.S. Non-U.S. U.S. Non-U.S.  U.S. Non-U.S. 

Change in projected benefit obligation:

            

Projected benefit obligations at beginning of period

  $256,945  $100,586  $255,959  $142,742   $251,791   $113,484   $270,751   $128,391   $280,157   $129,852  

Measurement change service and interest cost

   —     —     6,393   1,046 

Service cost - employer

   12,029   5,500   10,131   3,439 

Participant contributions

   —     39   —     35 

Service cost—employer

   2,826    2,292    870    787    1,307    1,426  

Interest cost

   14,390   5,778   15,516   7,634    15,146    7,146    6,279    2,877    8,973    4,032  

Actuarial (gain) loss

   (8,651)  (11,910)  3,965   (18,968)

Actuarial loss

   18,509    9,071    7,189    13,121    10,554    495  

Amendments

   —     —     66   —      (227  —      —      —      —      16  

Benefits paid

   (19,412)  (6,679)  (19,767)  (9,384)   (17,294  (11,721  (4,932  (2,902  (14,917  (4,662

Foreign currency exchange rate effect

   —     13,489   —     (14,144)   —      7,763    —      (12,422  —      8,729  

Curtailment/Settlements

   —     (5,209)  (20,472)  (305)   —      361    —      —      —      (3,405

Acquisitions of MAPS & El Jarudo

   —     41,313   —     410 

Other

   658   (165)  —     979    —      (5  —      —      —      28  
                                

Projected benefit obligations at end of period

  $255,959  $142,742  $251,791  $113,484   $270,751   $128,391   $280,157   $129,852   $286,074   $136,511  
             
                   

Change in plans’ assets:

            

Fair value of plans’ assets at beginning of period

  $202,407  $48,760  $225,006  $62,318   $162,645   $41,122   $186,566   $50,746   $187,607   $51,241  

Actual return on plans’ assets

   25,894   4,669   (59,701)  (10,552)   31,414    6,203    (152  449    19,885    5,133  

Employer contributions

   16,117   7,997   17,107   9,340    9,801    8,826    6,125    3,958    3,403    6,037  

Participant contributions

   —     39   —     35 

Benefits paid

   (19,412)  (6,679)  (19,767)  (9,384)   (17,294  (11,721  (4,932  (3,116  (14,917  (4,662

Foreign currency exchange rate effect

   —     7,377   —     (11,208)   —      6,320    —      (796  —      2,808  

Other

   —     155   —     573    —      (4  —      —      —      —    
                                

Fair value of plans’ assets at end of period

  $225,006  $62,318  $162,645  $41,122   $186,566   $50,746   $187,607   $51,241   $195,978   $60,557  
                                

Funded status of the plans

  $(30,954) $(80,424) $(89,146) $(72,362)  $(84,185 $(77,645 $(92,550 $(78,611 $(90,096 $(75,954
                                

Amounts recognized in the balance sheets:

     

Accrued liabilities (current)

  $(260) $(5,436) $(210) $(4,897)

Pension benefits (long term)

   (30,694)  (78,407)  (88,936)  (72,689)

Other assets

   —     3,419   —     5,224 
             

Net amount recognized at December 31

  $(30,954) $(80,424) $(89,146) $(72,362)
             

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

   Predecessor  Successor 
   Year Ended
December 31, 2009
  Seven Months Ended
December 31, 2010
 
   U.S.  Non-U.S.  U.S.  Non-U.S. 

Amounts recognized in the balance sheets:

     

Accrued liabilities (current)

  $(12,847 $(4,418 $(550 $(4,084

Pension benefits (long term)

   (71,338  (77,598  (89,546  (75,049

Other assets

   —      4,371    —      3,179  
                 

Net amount recognized at December 31

  $(84,185 $(77,645 $(90,096 $(75,954
                 

Included in cumulative other comprehensive loss at December 31, 20082010 are the following amounts that have not yet been recognized in net periodic benefit cost: unrecognized prior service costs of $2,116$16 ($1,96910 net of taxes), and unrecognized actuarial losses of $65,489$3,298 ($63,366 net of tax) and net transition obligation of $240 ($1732,503 net of tax). The amounts included in cumulative other comprehensive loss and expected to be recognized in net periodic benefit cost during the fiscal year-ended December 31, 20092011 are $317, $3,621$1 and $15,$40, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

The accumulated benefit obligation for all domestic and international defined benefit pension plans was $232,773$268,911 and $137,127$123,131 at December 31, 20072009 and $249,478$284,324 and $108,251$131,918 at December 31, 2008,2010, respectively. As of December 31, 2007,2009, the fair value of plan assets for two of the Company’s defined benefit plans exceeded the projected benefit obligation of $46,882$45,920 by $3,419.$4,371. As of December 31, 2008,2010, the fair value of plan assets for two of the Company’s defined benefit plans exceeded the projected benefit obligation of $27,588$29,942 by $5,224.

During 2007, the Company froze the defined benefits for two international plans which resulted in a curtailment gain that reduced the projected benefit obligation and net periodic benefit cost for 2007.

During 2008, the Company froze the defined benefits for the US Salaried Plan which resulted in a curtailment gain that reduced the projected benefit obligation for 2008.$3,179.

Weighted average assumptions used to determine benefit obligations at December 31:

 

  Predecessor  Successor 
  2007 2008   2009  2010 
  U.S. Non-U.S. U.S. Non-U.S.   U.S. Non-U.S.  U.S. Non-U.S. 

Discount rate

  6.25% 5.20% to 8.00% 5.85% to 6.35% 5.00% to 8.00%   5.79  5.66  5.37  5.18

Rate of compensation increase

  3.25% 2.50% to 5.00% 3.25% 2.90% to 5.00%   3.25  3.46  3.25  3.26

The following table provides the components of net pension expenseperiodic benefit cost for the plans:

 

  Predecessor  Successor 
  2006 2007 2008   Year Ended
December 31, 2008
 Year Ended
December 31, 2009
 Five Months Ended
May 31, 2010
  Seven Months Ended
December 31,2010
 
  U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.   U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.  U.S. Non-U.S. 

Service cost

  $11,922  $4,930  $12,030  $5,500  $10,131  $3,439   $10,131   $3,439   $2,826   $2,292   $1,002   $893   $1,307   $1,426  

Interest cost

   13,469   4,383   14,390   5,778   15,516   7,634    15,516    7,634    15,146    7,146    6,278    2,871    8,973    4,032  

Expected return on plan assets

   (15,951)  (3,540)  (16,940)  (3,712)  (18,151)  (4,144)   (18,151  (4,144  (13,118  (2,988  (6,050  (1,460  (8,619  (2,051

Amortization of prior service cost and recognized actuarial loss

   282   221   240   503   191   453 

Curtailment gain

   —     —     —     (5,231)  —     —   

Amortization of prior service cost, recognized actuarial loss and transistion obligation

   191    453    3,840    201    1,467    70    —      —    

Curtailment gain/settlement

   —      —      (159  (261  —      —      —      (3,405

Other

   60   136   —     —     140   (56)   140    (56  —      —      —      —      —      28  
                   
                         

Net periodic benefit cost

  $9,782  $6,130  $9,720  $2,838  $7,827  $7,326   $7,827   $7,326   $8,535   $6,390   $2,697   $2,374   $1,661   $30  
                                            

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

A curtailment gain of ($3,405) for the seven months ended December 31, 2010 included in the table above for one of the Company’s international locations was recorded as a reduction to restructuring expense.

Weighted-average assumptions used to determine net periodic benefit costs for the years ended December 31 were:

 

  Predecessor  Successor 
  2006 2007 2008   Year Ended
December 31, 2008
   Year Ended
December 31, 2009
   Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 
  U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.   U.S.   Non-U.S.   U.S.   Non-U.S.   U.S.   Non-U.S.  U.S.   Non-U.S. 

Discount rate

  5.75% 3.90% to 6.50% 5.75% 4.25% to 6.50% 6.25% 5.20% to 8.00%   6.25%     5.53%     6.18%     6.02%     5.79%     5.36%    5.55%     5.10%  

Expected return on plan assets

  8.50% to 8.80% 7.50% to 8.00% 8.50% 7.50% to 8.00% 8.00% 7.00% to 7.75%   8.00%     6.92%     8.00%     7.11%     8.00%     6.11%    8.00%     7.29%  

Rate of compensation increase

  3.25% 2.50% to 7.50% 3.25% 2.50% to 5.00% 3.25% 2.62% to 5.00%   3.25%     3.14%     3.25%     3.34%     3.25%     3.50%    3.25%     3.49%  

Plan Assets

To develop the expected return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

The weighted average asset allocations for the Company’s pension plans at December 31, 20072009 and 20082010 by asset category are approximately as follows:

 

  Predecessor  Successor 
  2007 2008   2009  2010 
  U.S. Non-U.S. U.S. Non-U.S.   U.S.   Non-U.S.  U.S.   Non-U.S. 

Equity securities

  59% 67% 37% 45%   41%     53%    42%     47%  

Debt securities

  33% 32% 28% 54%   23%     47%    18%     53%  

Real Estate

  8% 0% 5% 0%   3%     0%    4%     0%  

Balanced funds(1)

  0% 0% 29% 0%

Balanced funds(1)

   31%     0%    30%     0%  

Cash and cash equivalents

  0% 1% 1% 1%   2%     0%    6%     0%  
                            
  100% 100% 100% 100%   100%     100%    100%     100%  
                            

 

(1)Invested primarily in equity, fixed income and cash instruments.

Equity security investments are structured to achieve an equal balance between growth and value stocks. The Company determines the annual rate of return on pension assets by first analyzing the composition of its asset portfolio. Historical rates of return are applied to the portfolio. This computed rate of return is reviewed by the Company’s investment advisors and actuaries. Industry comparables and other outside guidance is also considered in the annual selection of the expected rates of return on pension assets.

Investments in equity securities and debt securities are valued at fair value using a market approach and observable inputs, such as quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy). Investments in Balanced Funds are valued at fair value using a market approach and inputs that are primarily directly or indirectly observable (Level 2 input based on the GAAP fair value hierarchy). Investments in Real Estate funds are primarily valued at fair value based on appraisals for each investment fund. The appraisals are considered an unobservable input (Level 3 input based on the GAAP fair value hierarchy). For further information on the GAAP fair value hierarchy, see Note 21. “Fair Value of Financial Instruments.”

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

The following table sets forth by level, within the fair value hierarchy established by FASB ASC Topic 820, the Company’s pension plan assets at fair value as of December 31, 2010:

   Level One   Level Two   Level Three   Total 

Investments

        

Equity securities

  $61,755    $49,054    $—      $110,809  

Debt securities

   16,338     51,778     —       68,116  

Real Estate

   —       —       7,021     7,021  

Balanced funds

   17,884     36,227     4,254     58,365  

Cash and cash equivalents

   12,224     —       —       12,224  
                    

Total

  $108,201    $137,059    $11,275    $256,535  
                    

The following is a reconciliation for which Level three inputs were used in determining fair value:

Beginning balance of assets classified as Level 3 as of January 1, 2010

  $6,003  

Net purchases

   4,144  

Total gains

   1,128  
     

Ending balance of assets classified as Level 3 as of December 31, 2010

  $11,275  
     

The Company estimates its benefit payments for its domestic and foreign pension plans during the next ten years to be as follows:

 

  U.S.  Non-U.S.  Total  U.S   Non-U.S   Total 

2009

  15,313  8,046  23,359

2010

  14,025  6,759  20,784

2011

  14,743  6,636  21,379  $15,348    $7,889    $23,237  

2012

  16,112  6,718  22,830   15,600     6,802     22,402  

2013

  15,969  6,899  22,868   16,032     6,893     22,925  

2014-2018

  90,712  38,647  129,359

2014

   16,752     6,993     23,745  

2015

   17,476     7,584     25,060  

2016 - 2020

   102,502     41,596     144,098  

The Company estimates it will make cash contributions of approximately $16,000$32,000 to its pension plans in 2009.2011.

10. Postretirement Benefits Other Than Pensions

The Company provides certain retiree health care and life insurance benefits covering substantially all U.S. salaried and certain hourly employees and employees in Canada. Employees are generally eligible for benefits upon retirement and completion of a specified number of years of creditable service. Independent actuaries determine postretirement benefit costs for each applicable subsidiary of the Company. The Company’s policy is to fund the cost of these postretirement benefits as these benefits become payable.

The following tables disclose information related to the Company’s postretirement benefit plans.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

   2007  2008 
   U.S.  Non-U.S.  U.S.  Non-U.S. 

Change in benefit obligation:

     

Benefit obligations at beginning of year

  $92,105  $11,666  $66,787  $14,084 

Measurement change service and interest cost

   —     —     1,293   354 

Service cost

   1,855   654   1,471   654 

Interest cost

   4,206   695   3,751   760 

Actuarial loss (gain)

   (19,897)  (628)  (5,516)  (3,463)

Benefits paid

   (1,133)  (286)  (2,610)  (475)

Administrative expenses paid

   (220)  —     —     —   

Curtailment gain

   (1,243)  —     —     —   

Plan change

   (8,886)   (6,271) 

Foreign currency exchange rate effect

   —     1,983   —     (2,345)
                 

Benefit obligation at end of year

  $66,787  $14,084  $58,905  $9,569 
                 

Funded status of the plans

  $(66,787) $(14,084) $(58,905) $(9,569)

Contributions between October 1 and December 31

   505   106   —     —   
                 

Net amount recognized at December 31

  $(66,282) $(13,978) $(58,905) $(9,569)
                 

The following tables disclose information related to the Company’s postretirement benefit plans.

   Predecessor  Successor 
   Year Ended
December 31, 2009
  Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 
   U.S.  Non-U.S.  U.S.  Non-U.S.  U.S.  Non-U.S. 

Change in benefit obligation:

       

Benefit obligations at beginning of year

  $58,905   $9,569   $57,036   $12,328   $59,380   $15,186  

Service cost

   1,307    446    481    163    705    308  

Interest cost

   3,493    796    1,341    353    1,893    506  

Actuarial loss (gain)

   (2,228  749    1,177    2,574    (3,324  1,109  

Benefits paid

   (2,073  (486  (690  (238  (1,198  (390

Curtailment gain

   (2,433  (748  —      —      —      —    

Plan change

   (94  —      —      —      17    —    

Other

   159    338    35    —      50    —    

Foreign currency exchange rate effect

   —      1,664    —      6    —      796  
                         

Benefit obligation at end of year

  $57,036   $12,328   $59,380   $15,186   $57,523   $17,515  
                         

Funded status of the plans

  $(57,036 $(12,328   $(57,523 $(17,515
                   

Net amount recognized at December 31

  $(57,036 $(12,328   $(57,523 $(17,515
                   

Included in cumulative other comprehensive loss at December 31, 20082010 are the following amounts that have not yet been recognized in net periodic benefit cost: unrecognized prior service credits of $13,438 ($12,833$17 net of tax)tax and unrecognized actuarial gains of $25,867$2,185 ($23,9542,486 net of tax). The amounts included in cumulative other comprehensive loss and expected to be recognized in net periodic benefit cost during the fiscal year-endedyear ended December 31, 2009 are ($1,873) and ($1,408), respectively.

During 2007 plan changes were made to two of the plans. These changes resulted in a decrease of $8,886 in the projected benefit obligation at December 31, 2007. During 2008 plan changes were made to four of the plans. These changes resulted in a decrease of $6,271 in projected benefit obligation at December 31, 2008.

During 2007 the Company experienced an actuarial gain of $19,897, which primarily was the result of changes in participant census data and a change in the discount rate.2011 is $2.

The following table provides the components of net periodic expensebenefit costs for the plans:

 

  Predecessor  Successor 
  Year Ended
December 31, 2008
   Year Ended
December 31, 2009
 Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 
  2006 2007 2008   U.S. Non-U.S.   U.S. Non-U.S. U.S. Non-U.S.  U.S.   Non-U.S. 

Service cost

  $3,438  $2,509  $2,125   $1,471   $654    $1,307   $446   $481   $157   $705    $308  

Interest cost

   5,538   4,901   4,511    3,751    760     3,493    796    1,341    360    1,893     506  

Amortization of prior service cost and recognized actuarial loss

   (88)  (908)  (2,895)   (2,895  —       (3,182  (108  (1,381  (14  —       —    

Curtailment gain

   —      —       (2,656  (748  —      —      —       —    

Other

   —      —       160    —      35    —      50     —    
                                     

Net periodic benefit cost

  $8,888  $6,502  $3,741   $2,327   $1,414    $(878 $386   $476   $503   $2,648    $814  
                                     

The curtailment gain for the year ended December 31, 2009 in the table above was recorded as a reduction to restructuring expense.

The weighted average assumed discount rate used to determine domestic benefit obligations was 6.25%5.80% and 6.10%5.35% at December 31, 20072009 and 2008,2010, respectively. The weighted-average assumed discount rate used to determine domestic net periodic expensebenefit cost was 5.75%6.25%, 5.75%6.10%, 5.80% and 6.25%5.55% for 2006, 2007,2008, 2009, the five months ended May 31,2010 and the seven months ended December 31, 2010, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

The weighted average assumed discount rate used to determine international benefit obligations was 6.80% and 5.25% at December 31, 2009 and 2010, respectively. The weighted-average assumed discount rate used to determine international net periodic benefit cost was 5.50%, 7.50%, 6.80% and 5.65% for 2008, 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively.

At December 31, 2008,2010, the weighted average assumed annual rate of increase in the cost of health care benefits (health care cost trend rate) was 9.3%8.35% for 20092011 for the U.S. and 10%9.0% for Non-U.S. with both grading down over time to 5.0% in 2018. A one-percentage point change in the assumed health care cost trend rate would have had the following effects:

 

   Increase  Decrease 

Effect on service and interest cost components

  $442  $(70)

Effect on projected benefit obligations

   2,502   (2,052)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

   Increase   Decrease 

Effect on service and interest cost components

  $195    $(159

Effect on projected benefit obligations

   3,584     (2,926

The Company estimates its benefit payments for its postretirement benefit plans during the next ten years to be as follows:

 

  U.S.  Non-U.S.  Total  U.S.   Non-U.S.   Total 

2009

  $3,119  $349  $3,468

2010

   3,278   380   3,658

2011

   3,458   414   3,872  $2,759    $573    $3,332  

2012

   3,584   452   4,036   2,924     595     3,519  

2013

   3,708   488   4,196   3,080     601     3,681  

2014-2018

   20,897   3,091   23,988

2014

   3,233     609     3,842  

2015

   3,420     628     4,048  

2016 - 2020

   19,859     3,572     23,431  

Other post retirement benefits recorded in our consolidated balance sheets include $14.5 million$10,429 and $11.7 million$8,263 as of December 31, 20072009 and 2008,2010, respectively, for termination indemnity plans for two of our European locations. The December 31, 2007 amount was previously recorded in other long-term liabilities.

11. Income Taxes

Components of the Company’s income (loss) before income taxes and adjustment for non-controlling interests are as follows:

 

   Year Ended
December 31,
2006
  Year Ended
December 31,
2007
  Year Ended
December 31,
2008
 

Domestic

  $(78,987) $(182,579) $(124,515)

Foreign

   63,323   64,532   32,359 
             
  $(15,664) $(118,047) $(92,156)
             

The Company’s provision (benefit) for income taxes consists of the following:

   Year Ended
December 31,
2006
  Year Ended
December 31,
2007
  Year Ended
December 31,
2008

Current

    

Federal

  $—    $5,047  $2,293

State

   —     212   701

Foreign

   25,269   28,983   12,256

Deferred

    

Federal

   (25,359)  —     —  

State

   (3,013)  (954)  —  

Foreign

   (4,141)  (342)  14,045
            
  $(7,244) $32,946  $29,295
            

   Predecessor  Successor 
   Year Ended
December 31, 2008
  Year Ended
December 31, 2009
  Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 

Domestic

  $(124,515 $(285,177 $517,609   $20,595  

Foreign

   31,290    (126,697  158,940    25,625  
                 
  $(93,225 $(411,874 $676,549   $46,220  
                 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

The Company’s provision (benefit) for income taxes consists of the following:

   Predecessor  Successor 
   Year Ended
December 31, 2008
  Year Ended
December 31, 2009
  Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 

Current

     

Federal

  $—     $(2,786 $—     $—    

State

   701    417    2,003    (91

Foreign

   15,784    (12,001  6,888    12,946  

Deferred

     

Federal

   (1,236  (4,850  614    —    

State

   —      —      55    —    

Foreign

   14,046    (36,466  30,380    (7,760
                 
  $29,295   $(55,686 $39,940   $5,095  
                 

The following schedule reconciles the United States statutory federal rate to the income tax provision:

 

  Predecessor  Successor 
  Year Ended
December 31,
2006
 Year Ended
December 31,
2007
 Year Ended
December 31,
2008
   Year Ended
December 31, 2008
 Year Ended
December 31, 2009
 Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 

Tax at U.S. statutory rate

  $(5,482) $(41,316) $(32,255)  $(32,629 $(144,156 $236,792   $16,177  

State and local taxes

   (3,013)  (4,732)  (1,359)   (1,359  (5,999  7,899    1,606  

Tax credits

   (7,571)  (9,675)  (6,995)   (6,995  (11,433  (1,936  (4,179

Goodwill Impairment

   —     50,024   8,099 

Worthless security deduction

   —     (23,947)  —   

Goodwill impairment

   8,099    50,712    —      —    

Reorganization items and fresh- start accounting adjustments, net

   —      —      (162,569  —    

Liquidation of foreign subsidiary

   —     —     17,703    17,703    —      —      —    

US-Canada APA settlement

   —      7,132    5,867    (651

Effect of tax rate changes

   —     4,891   (1,304)   (1,304  (260  —      (180

Foreign withholding taxes

   —     5,176   2,529    2,529    861    789    1,823  

Effect of foreign tax rates

   (3,056)  (4,130)  (6,828)   (6,828  (1,141  (7,376  (3,788

Valuation allowance

   10,290   51,788   45,154    45,154    39,898    (38,915  (5,377

Other, net

   1,588   4,867   4,551    4,925    8,700    (611  (336
                       

Income tax provision

  $(7,244) $32,946  $29,295   $29,295   $(55,686 $39,940   $5,095  
                       

Effective income tax rate

   46.2%  (27.9)%  (31.8)%   (31.4)%   13.5  5.9  11.0
                       

PaymentPayments(refunds), net for income taxes for the years ended December 31, 2008 and 2009, the five months ended May 31, 2010 and the seven months December 31, 2010 were $25,797, $(1,006), $6,584 and $4,367, respectively. These amounts do not include any payments or refunds of income taxes related to the US-Canada Advanced Pricing Agreement settlement.

Under the Bankruptcy Reorganization Plan, the Company’s prepetition senior subordinated securities and other obligations were extinguished. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The IRC provides that a debtor in a bankruptcy case may exclude CODI from income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. As a result of the market value of our equity upon emergence from Chapter 11 bankruptcy proceedings, our U.S. net operating loss carryforward will be reduced to zero, however a portion of refundsour tax credit carryforwards (collectively, the “Tax Attributes”) will be retained after reduction of the Tax Attributes for CODI realized on emergence from Chapter 11 bankruptcy proceedings.

IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its Tax Attributes, as well as certain built-in-losses, against future U.S. taxable income in 2006, 2007,the event of a change in ownership. The Company’s emergence from Chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRC Section 382. The limitation under the IRC is based on the value of the corporation as of the emergence date. As a result, our future U.S. taxable income may not be fully offset by the Tax Attributes if such income exceeds our annual limitation, and 2008 was $34,164, $20,622 and $25,797 respectively.we may incur a tax liability with respect to such income. In addition, subsequent changes in ownership for purposes of the IRC could further diminish the Company’s Tax Attributes.

Deferred tax assets and liabilities reflect the estimated tax effect of accumulated temporary differences between the basis of assets and liabilities for tax and financial reporting purposes, as well as net operating losses, tax credit and other carryforwards. Significant components of the Company’s deferred tax assets and liabilities at December 31 are as follows:

 

  Predecessor  Successor 
  2007 2008   2009  2010 

Deferred tax assets:

      

Postretirement and other benefits

  $55,501  $73,339   $68,398   $80,630  

Capitalized Expenditures

   14,521   12,765 

Capitalized expenditures

   10,892    9,015  

Net operating loss and tax credit carryforwards

   161,559   179,923    193,817    152,843  

All other items

   31,340   38,741    36,518    36,077  
              

Total deferred tax assets

   262,921   304,768    309,625    278,565  

Deferred tax liabilities:

      

Property, plant and equipment

   (23,311)  (39,071)   (38,990  (48,321

Intangibles

   (92,250)  (77,098)   —      (48,717

All other items

   (5,067)  (2,497)   (12,129  (2,193
              

Total deferred tax liabilities

   (120,628)  (118,666)   (51,119  (99,231

Valuation allowances

   (128,816)  (175,215)   (210,650  (155,363
       
       

Net deferred tax assets

  $13,477  $10,887   $47,856   $23,971  
              

Net deferred taxes in the consolidated balance sheet are as follows:

   Predecessor  Successor 
   2009  2010 

Current assets

  $7,239   $8,786  

Non-current assets

   58,555    39,461  

Current liabilities

   (10,063  (5,939

Non-current liabilities

   (7,875  (18,337
         
  $47,856   $23,971  
         

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

The net deferred taxes in the consolidated balance sheet are as follows:

   2007  2008 

Current Assets

  $5,150  $9,078 

Non-Current Assets

   41,505   32,508 

Current Liabilities

   (4,847)  (2,434)

Non-Current Liabilities

   (28,331)  (28,265)
         
  $13,477  $10,887 
         

At December 31, 2008,2010, the Company’s U.S. operations have operating loss carryforwards of $114,000 with expiration dates beginning in 2027. The Company’s foreign subsidiaries, primarily in the France, Brazil, Germany, UK and Australia,UK, have operating loss carryforwards aggregating $105,500$103,000 with indefinite expiration periods while Spain has an operating loss carryforward of $13,100$21,200 with expiration dates beginning in 2010.2011. Other foreign subsidiaries in China, India, Mexico, Italy, Netherlands, Poland, and Korea have operating losses aggregating $32,300,$60,400, with expiration dates beginning in 2013. The Company’s Polish subsidiaries have special economic zone credits totaling $27,200.$25,800. The Company’s Czech Republic subsidiary has an income tax incentive totaling $5,400. The U.S. foreign tax credit and research tax credit carryforwards are $30,400 and $18,200 respectively,carryforward is $44,400 with expiration dates beginning in 20112015 and 2023.2020. The Company and its domestic subsidiaries have anticipated tax benefits of state net operating losses and credit carryforwards of $19,400$21,000 with expiration dates beginning in 2009.2011.

During 2008,2010, due to our recent operating performance in the United States and current industry conditions, we continued to assess, based upon all available evidence, that it was more likely than not that we would not realize our U.S. deferred tax assets. During 2008,2010, our U.S. valuation allowance increaseddecreased by $66.9 million,$60,900, primarily related to operating losses incurred in the United States during 2008 and adjustmentsreduction of tax attributes to offset the minimum pension liability recorded through Other Comprehensive Income.cancellation of debt income generated as part of the Chapter 11 bankruptcy. Going forward, the need to maintain valuation allowances against deferred tax assets in the U.S. and other affected countries will cause variability in the Company’s effective tax rate. The Company will maintain a full valuation allowance against our deferred tax assets in the U.S. and applicable foreign countries until sufficient positive evidence exists to eliminate them.

Effective January 1, 2009, with the adoption of SFAS No. 141 (R) the benefit of the reversal of the valuation allowances on pre-acquisition contingencies will be included as a component of income tax expense. As of December 31, 2008 the Company has valuation allowances totaling $175,200 recorded against its deferred tax assets.

Deferred income taxes have not been provided on approximately $464,000$356,000 of undistributed earnings of foreign subsidiaries as such amounts are considered permanently reinvested. It is not practical to estimate any additional income taxes and applicable withholding taxes that would be payable on remittance of such undistributed earnings.

On June 23, 2009, a U. S. and Canadian bi-lateral Advanced Pricing Arrangement (“APA”) with the Company was completed and signed. The settlement of the bi-lateral APA resulted in income tax refunds to CSA Canada for the years 2000 through 2007 totaling approximately CAD $88,000. Under the terms of the Stock Purchase Agreement with Cooper Tire and Rubber Company dated September 16, 2004, Cooper Tire and Rubber Company had a claim against the Company is indemnified against substantially all contingent incomefor the amount of tax liabilities related to periods prior to the 2004 Acquisition.

During March 2008 the Company became aware of a potentially favorable settlement of the pending bi-lateral Advance Pricing Agreement (APA) negotiations between the United States (US) andrefunds received by CSA Canada relating to the periodsyears 2000 – 2007. Agreement betweenthrough 2004. On July 27, 2009, CSA Canada received approximately CAD $80,000, which represented the two governments will impact transfer pricing matters betweenfederal portion of the expected refunds plus interest.

The Company, CSA U.S. and CSA Canada (collectively, the “Defendants”) were named as defendants in an adversary proceeding (Case No. 09-52014 (PJW)) initiated by Cooper Tire & Rubber Company and its wholly ownedCooper Tire Rubber & Company UK Limited (together, “CTR”) in the Bankruptcy Court on August 19, 2009 (the “CTR Adversary Proceeding”). CTR’s complaint had sought a declaratory judgment that CTR was entitled to a portion of the CAD $80,000 tax refund received by CSA Canada from the Canadian subsidiary. In Marchgovernment on July 27, 2009 the US and Canadian governments signed Mutual Agreement Letters agreeinga portion of all future refunds received by CSA Canada, in each case relating to the termsperiod prior to the Company’s 2004 Acquisition. CTR also sought imposition of a resulting trust or, in the alternative, a constructive trust in favor of CTR and turnover of the bi-lateral APA. Final bi-lateral Advance Pricing Agreements with the Company should be completed and signed during the 2Q of 2009. The settlementportion of the bi-lateral APA will result inCanadian income tax refunds attributable to Cooper-Standard Automotive Canada for the years 2000 – 2007through 2004. In connection with the CTR Adversary Proceedings, the Defendants, CTR and the Official Committee of up to $80 million Canadian dollars.Unsecured Creditors appointed in the Chapter 11 Cases entered into an Agreement Concerning Terms and Conditions of a Compromise and Settlement, dated March 17, 2010 (the “CTR Settlement Agreement”). Under the terms of the SaleCTR Settlement Agreement, CTR agreed to, among other things, dismiss its complaint in the Bankruptcy Court with prejudice and

claim no further entitlement to the tax refunds. The Defendants agreed to, among other things, (i) pay CTR approximately $17,600 in cash and (ii) to obtain a release of CTR’s obligations in connection with a guarantee of one of the Company’s leases or, alternatively, provide a letter of credit in favor of CTR in the initial amount of $7,000 (but declining by $1,000 per year for seven years) to reimburse CTR for any amounts that it is required to pay the Company’s landlord on account of such

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

Purchase Agreementguarantee. The Defendants and CTR have also granted general mutual releases to each other with Cooper Tirerespect to claims and Rubberliabilities under the purchase agreement governing the Company’s 2004 Acquisition and other claims and liabilities, subject to certain exceptions relating to certain continuing indemnification obligations. On April 15, 2010, the Bankruptcy Court issued an order approving the CTR Settlement Agreement. In May 2010, the Company (CTR) dated December 23, 2004, CTR is entitled toreceived approximately CAD $33,000 of the remaining tax refunds arising in the years 2000 – 2004. As such, it is expected that CSA will remit to CTR tax refunds receivedrefund and related interest from the Canadian government related to those tax years. Refunds received from the Canadian government will be based on the preparation of amended tax returns for the years 2000 – 2007. The agreement should also result in a corresponding increase to the US taxable income of CSA for the years 2005 – 2007, but is not expected to result in any significant cash payment as the increased U.S. tax liability which will be largely offset by existing tax credit carryforwards.Canada.

At December 31, 2008,2010, the Company has $4,728$2,758 ($5,1593,533 including interest and penalties) of total unrecognized tax benefits. Of this total, $1,922$2,601 represents the amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate. The total unrecognized tax benefits differ from the amount which would effectaffect the effective tax rate due primarily to the impact of the valuation allowances and the impact of Cooper Tire indemnifying substantially all income tax liabilities resulting from periods prior to the 2004 Acquisition.allowance.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows

(in (in thousands):

 

   Year Ended
December 31,
2007
  Year Ended
December 31,
2008
 

Balance as of January 1

  $4,021  $3,930 

Tax Positions related to the current period

   

Gross Additions

   568   411 

Gross Reductions

   —     —   

Tax Positions related to prior years

   

Gross Additions

   167   1,127 

Gross Reductions

   —     (244)

Settlements

   (362)  (32)

Lapses on Statutes of Limitations

   (464)  (464)
         

Balance as of December 31

  $3,930  $4,728 
         
   Predecessor  Successor 
   Year Ended
December 31, 2008
  Year Ended
December 31, 2009
  Five Month Ended
May 31, 2010
  Seven Month Ended
December 31, 2010
 

Balance at beginning of period

  $3,930   $4,728   $3,218   $2,996  

Tax positions related to the current period

     

Gross additions

   411    255    107    13  

Gross reductions

   —      —      —      (19

Tax positions related to prior years

     

Gross additions

   1,127    —      —      1,676  

Gross reductions

   (244  (1,086  (79  (1,443

Settlements

   (32  (59  (250  —    

Lapses on statutes of limitations

   (464  (620  —      (465
                 

Balance at end of period

  $4,728   $3,218   $2,996   $2,758  
                 

The Company, or one of its subsidiaries, files income tax returns in the United States and other foreign jurisdictions. Under the terms of the Stock Purchase Agreement with Cooper Tire, the Company is indemnified against substantially all income tax liabilities related to periods prior to the 2004 Acquisition. Subsequently, in the United States, all Internal Revenue Service examinations prior to the 2004 Acquisition are the responsibility of Cooper Tire; therefore the Company is not subject to U.S. federal, state, or local tax examinations for years ending December 23, 2004 and prior. The Internal Revenue Service (IRS) commencedcompleted an examination of the Company’s U.S. income tax returns for 2005 and 2006 during 2009. The only material adjustments were those related to the US and Canada Advanced Pricing Agreement. An examination of the Company’s U.S. income tax returns for 2007 and 2008 is ongoing, with no significant adjustments anticipated. U.S. state and local jurisdictions for any taxable year prior to 2009 are generally limited to the amount of any tax claims they filed in the second quarter of 2008 that is anticipated to be completedBankruptcy Court by late 2009. As of December 31, 2008, no adjustments have been proposed. The Company’s foreign subsidiaries are legally required to comply with the statute of limitations in each jurisdiction; however the Company is indemnified against substantially all income tax liabilities that may result from periods prior to the 2004 Acquisition.February 3, 2010. The Company’s major foreign jurisdictions are Brazil, Canada, France, Germany, Italy, Mexico, and U.K.Poland. The Company is no longer subject to income tax examinations in major foreign jurisdictions for years prior to 2000.2003.

TheDuring the next twelve months, it is reasonably possible that, as a result of audit settlements, the conclusion of current examinations and the expiration of the statute of limitations in certain jurisdictions, the Company does not anticipate any significant changes tomay decrease the amount of its totalgross unrecognized tax benefits withinby approximately $2,254, of which an immaterial amount, if recognized, could impact the next 12 months.effective tax rate.

The Company classifies all tax related interest and penalties as income tax expense. AtThe company has recorded in liabilities for 2008, 2009, the five months ended May 31, 2010 and the seven months December 31, 2008, the Company has recorded2010 $431, in liabilities$436, $352, and $775, respectively, for tax related interest and penalties on its Consolidated Balance Sheet.

consolidated balance sheet.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

12. Lease Commitments

The Company rents certain manufacturing facilities and equipment under long-term leases expiring at various dates. Rental expense for operating leases was $19,835, $22,303,$23,331, $21,570, $9,525 and $23,331$11,668 for 2006, 2007,the years ended December 31, 2008 and 2008.2009, the five months ended May 31, 2010 and the seven months December 31, 2010, respectively.

Future minimum payments for all non-cancelable operating leases are as follows:

 

2009

  $17,983

2010

   12,251

2011

   10,354  $19,133  

2012

   8,658   14,530  

2013

   7,188   11,698  

2014

   9,528  

2015

   8,402  

Thereafter

   26,881   17,260  

13. Accumulated Other Comprehensive Income (Loss)

Cumulative other comprehensive income (loss) in the accompanying balance sheets consists of:

 

  Predecessor  Successor 
  For the Year Ended Five Months  Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 
  2006 2007 2008   2008 2009  

Cumulative currency translation adjustment

  $14,259  $57,505  $(1,424)  $(1,424 $24,474   $(6,617 $40,828  

Benefit plan liability

   (11,617)  23,977   (28,540)   (28,540  (33,159  (33,067  5,451  

Tax effect

   3,870   916   (181)   (181  939    973    (489
                       

Net

   (7,747)  24,893   (28,721)   (28,721  (32,220  (32,094  4,962  

Fair value change of derivatives

   (8,781)  (16,748)  (32,685)   (32,685  (22,742  (23,017  127  

Tax effect

   3,319   3,338   3,294    3,294    (549  (355  (36
                       

Net

   (5,462)  (13,410)  (29,391)   (29,391  (23,291  (23,372  91  
                       
  $1,050  $68,988  $(59,536)  $(59,536 $(31,037 $(62,083 $45,881  
                       

14. Contingent Liabilities

Employment Contracts

The Company has employment arrangements with certain key executives that provide for continuity of management. These arrangements include payments of multiples of annual salary, certain incentives, and continuation of benefits upon the occurrence of specified events in a manner that is believed to be consistent with comparable companies.

Unconditional Purchase Orders

Noncancellable purchase order commitments for capital expenditures made in the ordinary course of business were $27,438$19,252 and $12,593$38,948 at December 31, 20072009 and 2008,2010, respectively.

Legal and Other Claims

The Company is periodically involved in claims, litigation, and various legal matters that arise in the ordinary course of business. In addition, the Company conducts and monitors environmental investigations and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

remedial actions at certain locations. Each of these matters is subject to various uncertainties, and some of these matters may be resolved unfavorably with respect to the Company. AIf appropriate, the Company establishes a reserve estimate is established for each matter and updatedupdates such estimate as additional information becomes available. Based on the information currently known to us, we do not believe that the ultimate resolution of any of these matters will have a material adverse effect on our financial condition, results of operations, or cash flows.

15. Other Income (Expense), net

The components of Other Income (Expense) for the years 2008, 2009, and 2010 are as follows:

   Predecessor  Successor 
   For the Year Ended  Five Months Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 
   2008  2009   

Foreign currency gains (losses)

  $(845 $4,455   $(20,779 $3,355  

Gain on debt repurchase

   1,696    9,096    —      —    

Interest rate swaps

   —      (2,414  —      —    

Loss on sale of receivables

   (2,219  (1,218  (377  (715

Miscellaneous income

   —      —      —      1,574  
                 

Other income (expense)

  $(1,368 $9,919   $(21,156 $4,214  
                 

16. Related Party Transactions

Sales to NISCO, a 50% owned joint venture, totaled $26,658, $21,705, $12,273 and $16,032, in 2008, 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively.

Purchases of materials from Guyoung, a 20% owned joint venture, totaled $1,313, $4,204, $4,052 and $2,894 in 2008, 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively.

17. Net Income Per Share Attributable to Cooper-Standard Holdings Inc.

Basic net income per share attributable to Cooper-Standard Holdings Inc. was computed using the two-class method by dividing net income attributable to Cooper-Standard Holdings Inc., after deducting dividends on the Company’s 7% preferred stock and undistributed earnings allocated to participating securities, by the average number of common shares outstanding during the period. The Company’s shares of 7% preferred stock outstanding are considered participating securities. A summary of information used to compute basic net income per share attributable to Cooper-Standard Holdings Inc. is shown below:

   Successor 
   Seven Months Ended
December 31, 2010
 

Net Income attributable to Cooper-Standard Holdings Inc.

  $40,576  

Less: Preferred stock dividends (paid or unpaid)

   (4,734

Less: Undistributed earnings allocated to participating securities

   (7,119
     

Net income available to Cooper-Standard Holdings Inc. common stockholders

  $28,723  
     

Average shares of common stock outstanding

   17,489,693  
     

Basic net income per share attibutable to Cooper-Standard Holdings Inc.

  $1.64  
     

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

Diluted net income per share attributable to Cooper-Standard Holdings Inc. was computed using the treasury stock method dividing net income attributable to Cooper-Standard Holdings Inc. by the average number of shares of common stock outstanding, including the dilutive effect of common stock equivalents, using the average share price during the period. Diluted net income per share attributable to Cooper-Standard Holdings Inc. computed using the two-class method was anti-dilutive. A summary of information used to compute diluted net income per share attributable to Cooper-Standard Holdings Inc. is shown below:

   Successor 
   Seven Months Ended
December 31, 2010
 

Net income available to Cooper-Standard Holdings Inc. common stockholders

  $28,723  
     

Average common shares outstanding

   17,489,693  

Dilutive effect of:

  

Common restricted stock

   321,967  

Preferred restricted stock

   77,758  

Warrants

   633,933  

Options

   56,574  
     

Average dilutive shares of common stock outstanding

   18,579,925  
     

Diluted net income per share attibutable to Cooper-Standard Holdings Inc.

  $1.55  
     

The effect of including the convertible 7% preferred stock was excluded from the computation of weighted average diluted shares outstanding for the seven months ended December 31, 2010, as inclusion would have resulted in antidilution. A summary of these preferred shares (as if converted), is shown below:

   Successor 
   Seven Months Ended
December 31, 2010
 

Preferred shares, as if converted

   4,335,188  

Preferred dividends and undistributed earnings allocated to participating securities that would be added back in the diluted calculation.

  $11,853  

18. Capital Stock

Common Stock

The Company is authorized to issue up to 190,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2010, an aggregate of 18,376,112 shares of its common stock were issued and outstanding.

Holders of shares of common stock are entitled to one vote for each share on each matter on which holders of common stock are entitled to vote. Holders of 7% preferred stock are entitled to vote (on an “as-converted” basis), together with holders of shares of common stock as one class, on all matters upon which holders of common stock have a right to vote.

Holders of common stock are entitled to receive ratably dividends and other distributions when, as and if declared by the Company’s board of directors out of assets or funds legally available therefore. The 7% preferred stock restricts the Company’s ability to pay dividends on common stock (other than dividends paid in common stock) unless full cumulative preferred dividends on the 7% preferred stock have been paid (in cash or “in-kind” with additional shares of 7% preferred stock (“additional preferred shares”)) and, in the case of a cash dividend,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

15. Other Income (Expense), net

The components of Other Income (Expense) for the years 2006, 2007, and 2008 are as follows:

   Year Ended
December 31,
2006
  Year Ended
December 31,
2007
  Year Ended
December 31,
2008
 

Foreign currency gains (losses)

  $3,771  $(454) $(845)

Minority interest

   (858)  (587)  1,069 

Net gains on repurchase of debt

   4,071   —     1,696 

Loss on sale of receivables

   —     —     (2,219)

Gains (losses) on fixed asset disposals

   1   (14)  —   
             

Other income (expense), net

  $6,985  $(1,055) $(299)
             

16. Related Party Transactions

Sales to NISCO, a 50 percent owned joint venture, totaled $32,140, $30,941, and $26,658, in 2006, 2007, and 2008, respectively. In 2006, the Company received from NISCO ashall have offered to purchase and has purchased all additional preferred shares previously issued by it as an in-kind dividend of $10,000, consisting of $2,254 relatedand tendered to earnings during the Successor period and a $7,746 return of capital. In 2008, the Company received from NISCO a dividend of $5,000 all of which was relatedby the holders thereof. The Senior Notes and the Senior ABL Facility also each contain covenants that restrict the Company’s ability to earnings.

Purchases of materials from Guyoung Technology Co. Ltd, a 20% owned joint venture, totaled $4,181, $5,041 and $1,313 in 2006, 2007 and 2008, respectively.pay dividends or make distributions on the common stock, subject to certain exceptions.

In connection with the acquisitionevent of FHS,the liquidation, dissolution or winding up of the Company, paid $1,000holders of transaction advisory feescommon stock are entitled to each of its two principal stockholdersshare ratably in February 2006.

In connection with the MAPS acquisition, the Company received $15,000assets, if any, remaining after the payment of capital contributions from eachall the Company’s debts and liabilities, subject to any liquidation preference of its two Sponsorsany outstanding series of preferred stock, including the 7% preferred stock.

Warrants

An aggregate of 2,419,753 warrants have been issued and their respective affiliates in August 2007. The Company also paid $625 of transaction advisory fees to each of its two Sponsors in September 2007.

17. Capital Stock and Stock Options

In 2004, the Company was formed and was capitalized in conjunction with the 2004 Acquisition via the sale of 3,180,0002,419,753 shares of common stock for $318,000 to affiliatesare issuable upon exercise of the warrants. The Cypress Group L.L.C. and GS Capital Partners 2000, L.P., whom we refer to as our “Sponsors”. Pursuant to subscription agreements enteredwarrants are exercisable into as of August 27, 2007, the Company issued a total of 250,000 additional shares of common stock at an exercise price of $27.33 per share or on a cashless (net share settlement) basis and are subject to certain customary anti-dilution protections. The warrants may be exercised at any time prior to the close of business on November 27, 2017. The warrants are not redeemable. Warrant holders do not have any rights or privileges of holders of common stock until they exercise their warrants and receive shares of common stock.

Redeemable Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $0.001 per share. The Company has designated 2,000,000 shares of its Sponsors for $30,000authorized preferred stock as “7% cumulative participating convertible preferred stock,” of which was invested by1,052,444 shares were issued and outstanding as of December 31, 2010. The 7% preferred stock ranks senior to the Sponsors in connection with the financingcommon stock and all other classes or series of the Company’s August 2007 acquisition of certain Metzeler Automotive Profile Systems sealing operations. Followingcapital stock, except for any class or series that ranks on a parity with the 2004 Acquisition and through December 31, 2007, five members7% preferred stock (“junior securities”). In the event of the BoardCompany’s liquidation, dissolution or winding up, holders of Directors7% preferred stock are entitled to priority in payments in an amount equal to the greater of (x) the stated value of the 7% preferred stock (currently one hundred dollars, subject to adjustments) (the “stated value”) plus accrued and certain membersunpaid cumulative preferred dividends and (y) the amount such share of senior management purchased $4,910 of common stock. The Company repurchased $3007% preferred stock would be entitled to receive if such share had been converted into shares of common stock during 2005 from one such member(i.e. on an “as-converted” basis).

Holders of senior management whose employment7% preferred stock are entitled to receive cumulative preferred cash dividends at the rate of 7% per annum on the stated value plus all accrued and unpaid dividends. Dividends are payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year. The Company may, at its option, pay preferred dividends “in-kind” with additional preferred shares; provided that all accrued dividends for all past dividend periods have been paid in full (whether in cash or in-kind). Holders of shares of 7% preferred stock are also entitled to participate on an “as-converted” basis in dividends and distributions paid or made on the Company terminatedcommon stock, other than those paid or made in 2005 and another $450shares of common stock during 2007(each, a “participating dividend”). The 7% preferred stock restricts dividends and distributions on, and the acquisition or redemption of, junior securities (including common stock), subject to certain exceptions.

Shares of 7% preferred stock are convertible from another such member of senior management whose employment with the Company terminated in 2006 and another $540time to time into shares of common stock during 2008 from anotherat the option of the holders. The conversion price of the 7% preferred stock is $23.30574 per share of common stock and is subject to customary “anti-dilution” adjustments.

The Company may cause the conversion of some or all of the 7% preferred stock at any time after May 27, 2013 if, among other things, (i) the closing sale price of the common stock exceeded 155% of the conversion price for a specified period and (ii) the common stock has been listed on the New York Stock Exchange or

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

NASDAQ. The Company may also cause the conversion of all shares of 7% preferred stock immediately prior to the consummation of an underwritten initial public offering of the common stock if (i) the holders of two-thirds of the then outstanding shares of 7% preferred stock approve the conversion and (ii) the common stock has been listed on the NYSE or NASDAQ.

In the event of certain transactions in which all of the common stock is converted into the right to receive cash (a “cash transaction”), the Company may, at its option, cause all of the shares of 7% preferred stock to be converted into cash in an amount determined as set forth in the certificate of designations relating to the 7% preferred stock. Upon the occurrence of certain events that constitute a change of control or involve a cash transaction, the holders of 7% preferred stock may require the Company to redeem all or a portion of their 7% preferred stock at a cash price per share determined as set forth in the certificate of designations.

From and after May 27, 2010, the Company may, at its option, redeem shares of 7% preferred stock at any time, in whole or in part, in cash in an amount determined as set forth in the certificate of designations. The Company’s right to optionally redeem the 7% preferred stock is subject to certain conditions, including that all dividends must have been paid for all past dividend periods.

Each share of 7% preferred stock carries one vote for each share of common stock into which such membershare may be converted and is entitled to vote on any matter upon which shares of senior management whose employmentthe common stock are entitled to vote, voting together with the Company terminated in 2007.

Effectivecommon stock and not as a separate class. In addition, the holders of two-thirds of the closingoutstanding 7% preferred stock are required to approve certain actions that could adversely affect the 7% preferred stock.

The following table summarizes the Company’s 7% preferred stock activity for the seven months ended December 30, 2010:

   Successor 
   Preferred
Shares
   Preferred
Stock
 

Preferred Stock at June 1, 2010

   1,000,000    $128,000  

Stock-based compensation

   41,664     920  

Preferred stock dividends

   10,780     1,419  
          

Preferred Stock at December 31, 2010

   1,052,444    $130,339  
          

On July 19, 2010, the Company paid a dividend to holders of its outstanding 7% preferred stock in the form of 10,780 additional shares of 7% preferred stock.

19. Stock-Based Compensation

The Company measures stock-based compensation expense at fair value in accordance with the provisions of GAAP and recognizes such expense over the vesting period of the 2004 Acquisition,stock-based employee awards.

Predecessor

Prior to the Effective Date, the Company established the 2004 Cooper-Standard Holdings Inc. Stock Incentive Plan (“Stock Incentive Plan”), which permitspermitted the granting of nonqualified and incentive stock options, stock appreciation rights, restricted stock and other stock-based awards to employees and directors. As ofIn addition, in December 31, 2007 and 2008,2006 the Company had 423,615 shares of common stock reserved for issuance underestablished the plan, including outstanding options granted to certain employees and directors to purchase 212,615 and 192,615 shares of common stock, respectively, at a price of $100 per share,Management Stock Purchase Plan, which was determined by the Company to be fair market value. In addition, there are also outstanding options granted to certain employees and directors to purchase 27,000 shares of common stock at a price of $120 per share. These options have a ten-year life. Of the options outstanding as of December 31, 2007 and 2008, options

provided

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

covering 183,128participants the opportunity to “purchase” Company stock units. On the Effective Date, outstanding awards under the Stock Incentive Plan and 165,239Management Stock Purchase Plan were cancelled in accordance with the terms of the Plan of Reorganization. Total compensation expense recognized under these plans amounted to $1,264, $1,361 and $244 for the years ended December 31, 2008 and 2009 and the five months ended May 31, 2010, respectively.

Successor

On the Effective Date, the Company adopted the 2010 Cooper-Standard Holdings Inc. Management Incentive Plan (the “Management Incentive Plan”) that was filed with the Bankruptcy Court on May 5, 2010 as part of the supplement to the Plan of Reorganization. The total number of shares authorized to be issued under the Management Incentive Plan as the Initial Grant Awards are as follows: (1) 4% of the common stock (or 757,896 shares of common stock, respectively, wereplus, subject to realized dilution on the warrants, an additional 104,075 shares of common stock) to be granted as restricted stock; (2) 4% of the 7% preferred stock (initially convertible into 178,771 shares of common stock) to be granted as restricted 7% preferred stock; and (3) 3% of the equity (or 702,509 shares of common stock, plus, subject to realized dilution on the warrants, an additional 78,057 shares of common stock) to be granted as stock options. On the day after the Effective Date, the Company issued to certain of its directors and Oak Hill Advisors L.P. or its affiliates, 26,448 shares of common stock as restricted stock and 58,386 options to purchase shares of common stock. The Company also reserved 780,566 shares of common stock for future issuance to the Company’s management.

The total number of shares which may be issued under the Management Incentive Plan as the Future Grant Awards, to be issued incrementally, are 3% of the equity (or 702,509 shares of common stock, plus, subject to realized dilution on the warrants, 78,057 shares of common stock). The issuance of shares or the payment of cash upon the closingexercise of an award or in consideration of the 2004 Acquisitioncancellation or intermination of an award will reduce the first year thereafter. During 2008, options covering 9,549total number of these shares were cancelled and 8,340 were forfeited. These options were issued prior toavailable under the effective date of SFAS No. 123(R) and therefore are accounted for in accordance with APB No. 25 and no stock compensation is required to be recognized. Of the 165,239 options outstanding at December 31, 2008, 110,537 options are vested with a weighted average remaining contractual term of 6 years. A summary of option transactions for the years ended 2006, 2007 and 2008 for options that were granted after the effective date of SFAS No. 123 (R) is shown below:

   2006  2007  2008
   Options  Wtd. Avg.
Ex. Price
  Options  Wtd. Avg.
Ex. Price
  Options  Wtd. Avg.
Ex. Price

Outstanding at Beginning of Year

   —    $—     4,025  $100.00   29,487  $100.00

Granted

   4,025  $100.00   25,462  $100.00   27,000  $120.00

Cancelled

   —    $—     —    $—     (655) $100.00

Forfeited

   —    $—     —    $—     (1,456) $100.00
                  

Outstanding at End of Year

   4,025  $100.00   29,487  $100.00   54,376  $109.93
                  

Exercisable at End of Year

   —    $—     4,264  $100.00   24,566  $108.01

Weighted Average Fair Value of Options Granted

  $46.22    $46.02    $42.39  

Weighted Average Remaining Contractual Life (years):

           

Outstanding at End of Year

   10     9.2     8.7  

Exercisable at End of Year

   —       9.2     8.6  

Stock compensation expense totaling $561 and $635 has been recognized in 2007 and 2008, respectively for these options.

One-half of the options granted to employees in the initial one-year period following the 2004 Acquisition vest on a time basis, 20% per year over five years; the remaining one-half vest on a performance basis at a rate of between 0% and 20% per year, depending on the extent toManagement Incentive Plan, as applicable. Shares which established performance targets are attained, with 85% attainment of performance targets being the threshold for any vesting. Performance-based options granted during this period are subject to certain acceleration provisionsawards which terminate or lapse without the payment of consideration may be granted again under the Management Incentive Plan.

The compensation expense related to stock options and regardless of the achievement of performance targets in any year, may vest in full in the event of a transaction in which the Company’s Sponsors realize an internal rate of return of at least 20% on their investment in the Company, or may vest in full 8 years following the date of grant if the Compensation Committee determines that certain accounting treatment would be required in the absence of such vesting. The same principles apply in the case of optionsrestricted stock granted after this initial period but before 2008, except that only the last three years of the five-year period applicable to options granted in the initial period are taken into account,key employees and vesting occurs in increments of 33% rather than 20%. With respect to options granted in 2008, two-thirds of the options vest on a time basis at a rate of 50% per year over two years and the remaining one-third were eligible for vesting based on the performancedirectors of the Company in 2008. Optionsconnection with the Company’s emergence from bankruptcy, which is qualified below, does not represent payments actually made to these employees. Rather, the amounts represent the non-cash compensation expense recognized by the Company in connection with these awards for financial reporting purposes. The actual value of these awards to the recipients will depend on the trading price of the Company’s stock when the awards vest.

Stock Options. On the Effective Date, 780,566 options to purchase common stock were issued, and on the day after the Effective Date, 58,386 options were granted, to employees covering 105,149 and 131,403 sharesall with an exercise price of $25.52. The weighted average grant-date fair value of these options is $11.42. All options were vestedoutstanding as of December 31, 20072010, and 2008, respectively. Allno options were cancelled, forfeited, exercised or vested. Stock option awards are granted at the fair market value of the Company’s stock price at the date of the grant and have a 10 year term. The stock option grants vest over three or four years from the date of grant. Total compensation expense recognized for stock options grantedamounted to directors vest on a time basis, 20% per year over five years in$1,493 for the case of options granted before 2008, and 50% per year over two years in the case of options granted in 2008. Options granted to directors covering an aggregate of 1,000 and 3,700 shares were vested asseven months ended December 31, 2010. As of December 31, 2007 and 2008, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)2010, unrecognized compensation expense for stock options amounted to $8,090.

(Dollar amounts in thousands except per share amounts)

The Company uses expected volatility of similar entities to develop the expected volatility. The expected option life was calculated using the simplified method as described in Staff Accounting Bulletin No. 107.method. The risk free rate is based on the U.S. Treasury zero-coupon issues with a term equal to the expected option life on the date the stock options were granted. Fair value for the shares that are accounted for under SFAS No. 123(R) was estimated at the date of the grant using the Black-Scholes option pricing model using the following weighted average assumptions:

   2007  2008 

Expected volatility

  40.00% 34.00%

Dividend yield

  0.00% 0.00%

Expected option life

  6.0 years  5.5 years 

Risk-free rate

  4.50% 2.40% - 2.65%

The Company also maintains a nonqualified Deferred Compensation Plan which allows eligible executives and directors to defer base pay, bonus payments and long-term incentive pay and have it allocated on a pre-tax basis to various investment alternatives and ultimately distributed to the executive at a designated time in the future. In December 2006, a new plan feature referred to as the “Management Stock Purchase Plan” was established which provides participants the opportunity to “purchase” Company stock units with income deferred under the deferred compensation plan at a price based on the fair value of Company common stock determined on a semi-annual basis by the Compensation Committee of the Company’s Board of Directors. Purchased stock units are matched by the Company at year-end on a one-for-one basis, subject to plan provisions which allow for an annual cap on the aggregate number of matching stock units, which the Compensation Committee may apply in its discretion. On December 31, 2008, approximately 40,597 Company stock units at $120 per unit were outstanding under this plan, subject to certain adjustments based on net actual incentive payments. Approximately 20,242 of these stock units are matching stock units that generally vest ratably over a three year period. No units were vested as of December 31, 2007. As of December 31, 2008, 6,479 units were vested. In accordance with SFAS No. 123(R), for units granted to retirement eligible employees, compensation expense must be recognized immediately, since employees meeting eligibility for retirement would be immediately vested in this plan upon leaving employment. Compensation expense related to Company stock units equaled $988 and $629 in 2007 and 2008, respectively.

18. Business Segments

Throughout 2008, the Company operated in three business segments: Body & Chassis Systems, Fluid Systems, and Asia Pacific. The Body & Chassis segment consisted mainly of body sealing products and components that protect vehicle interiors from weather, dust, and noise intrusion as well as systems and components that control and isolate noise vibration in a vehicle to improve ride and handling. The Fluid segment consisted primarily of subsystems and components that direct, control, measure, and transport fluids and vapors throughout a vehicle. The Asia Pacific segment consisted of both Body & Chassis and Fluid operations in that region with the exception of the Company’s interest in a joint venture in China which was acquired as part of the MAPS acquisition, and the MAP India joint venture. These joint ventures are included in the Body & Chassis segment which is in line with the internal management structure.

During 2007, the Company revised its segment disclosures from two reportable segments to the three reportable segments described above and has revised the prior period amounts to conform to the current period presentation. On March 26, 2009, the Company announced the implementation of a plan involving the discontinuation of its global Body & Chassis and Fluid Systems operating divisions and the establishment of a new operating structure organized on the basis of geographic regions. Under the plan, the Company’s reporting segments, as well as its operating structure, has changed, and the Company intends to revise its segment disclosures beginning with the second quarter of 2009 from the three segments described above to two reportable segments, North America and International (comprising all of the Company’s operations outside of North America).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

SFAS No. 131, “Disclosures aboutof the shares that are accounted for under ASC Topic 718 was estimated at the date of the grant using the Black-Scholes option pricing model and the following weighted average assumptions:

2010

Expected volatility

40.00

Dividend yield

0.00

Expected option life—years

6.25

Risk-free rate

3.40

Restricted Common Shares.On the Effective Date, 861,971 restricted shares of common stock were granted, and on the day after the Effective Date, 26,448 restricted shares were granted. All restricted shares of common stock were outstanding as of December 31, 2010 and no restricted shares of common stock were cancelled, forfeited or vested. The fair value of the restricted shares of common stock is determined based on the closing sales price of the common stock on the date of grant. The weighted average grant date fair value of these shares is $25.52. The restricted shares of common stock vest over three and four years. Total compensation expense recognized for restricted shares of common stock amounted to $3,938 for the seven months ended December 31, 2010. As of December 31, 2010, unrecognized compensation expense for restricted shares of common stock amounted to $18,734.

Restricted Preferred Stock. On the Effective Date, 41,664 restricted preferred stock shares were granted, and they vest over three or four years from the date of grant. On July 19, 2010, the Company paid a stock dividend of 435 restricted preferred shares on the 41,664 restricted preferred stock shares outstanding. The fair value of the restricted preferred stock is determined based on the fair market value of the 7% preferred stock on the date of grant. As of December 31, 2010, there were 42,099 restricted preferred stock shares outstanding, which are convertible into 180,637 shares of common stock. The weighted average grant date fair value of these shares is $127.77. No restricted preferred stock shares were cancelled, forfeited or converted during the seven months ended December 31, 2010. Total compensation expense recognized for restricted preferred stock totaled $920 for the seven months ended December 31, 2010. As of December 31, 2010, unrecognized compensation expense for restricted preferred stock amounted to $4,460.

20. Business Segments of an Enterprise and Related Information,

ASC Topic 280, “Segment Reporting, (SFAS 131) establishes the standards for reporting information about operating segments in financial statements. In applying the criteria set forth in SFAS 131,ASC 280, the Company has determined that it operates in threetwo segments. The Company’s principal product lines are body and chassis products and fluid handling products.

The accounting policies of the Company’s business segments are consistent with those described in Note 2. The Company evaluates segment performance based on segment profit before tax. The results of each segment include certain allocations for general, administrative, interest, and other shared costs. However, certain shared costs are not allocated to the segments and are included below in Eliminations and other. Intersegment sales are conducted at market prices. Segment assets are calculated based on a moving average over several quarters and exclude corporate assets, goodwill, intangible assets, deferred taxes, and certain other assets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

The following table details information on the Company’s business segments:

   Predecessor  Successor 
   For the Year Ended  Five Months  Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 
   2008  2009   

Sales to external customers

     

North America

  $1,244,423   $910,306   $508,738   $739,419  

International

   1,350,154    1,034,953    500,390    665,600  
                 

Consolidated

  $2,594,577   $1,945,259   $1,009,128   $1,405,019  
                 

Intersegment sales

     

North America

  $3,687   $4,377   $1,757   $2,640  

International

   11,585    5,467    3,206    4,488  

Eliminations and other

   (15,272  (9,844  (4,963  (7,128
                 

Consolidated

  $—     $—     $—     $—    
                 

Segment profit (loss)

     

North America

  $(36,662 $(246,015 $590,121   $58,004  

International

   (56,563  (165,859  86,428    (11,784
                 

Income (loss) before income taxes

  $(93,225 $(411,874 $676,549   $46,220  
                 

Depreciation and amortization expense

     

North America

  $77,135   $60,192   $17,701   $33,475  

International

   59,199    49,240    16,266    30,121  

Eliminations and other

   3,771    4,345    1,685    3,073  
                 

Consolidated

  $140,105   $113,777   $35,652   $66,669  
                 

Capital expenditures

     

North America

  $27,565   $14,194   $9,120   $21,197  

International

   54,783    30,076    11,542    29,366  

Eliminations and other

   9,777    1,843    2,273    3,878  
                 

Consolidated

  $92,125   $46,113   $22,935   $54,441  
                 

Segment assets

     

North America

   $694,442    $763,401  

International

    877,971     878,161  

Eliminations and other

    164,994     212,214  
           

Consolidated

   $1,737,407    $1,853,776  
           

Net interest expense included in segment profit for North America totaled $45,831, $31,013, $22,181and $12,593 for the years ended December 31, 2008 and 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively. Net interest expense included in segment profit for International totaled $47,063, $33,320, $22,324 and $12,424 for the years ended December 31, 2008 and 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively.

Restructuring costs included in segment profit for North America totaled $13,356, $8,624, $851 and $485 for the years ended December 31, 2008 and 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively. International restructuring costs totaled $24,944, $23,787, $5,042 and $3 for the years ended December 31, 2008 and 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

   For the Year Ended 
   2006  2007  2008 

Sales to external customers

    

Body & Chassis

  $1,100,390  $1,317,621  $1,523,314 

Fluid

   971,122   1,096,944   979,601 

Asia Pacific

   92,750   96,588   91,662 
             

Consolidated

  $2,164,262  $2,511,153  $2,594,577 
             

Intersegment sales

    

Body & Chassis

  $20,162  $21,867  $13,389 

Fluid

   3,149   4,142   2,702 

Asia Pacific

   1,396   7,768   9,117 

Eliminations and other

   (24,707)  (33,777)  (25,208)
             

Consolidated

  $—    $—    $—   
             

Segment profit

    

Body & Chassis

  $(26,108) $33,993  $(16,919)

Fluid

   19,173   (137,913)  (49,556)

Asia Pacific

   (8,729)  (14,127)  (25,681)
             

Income before income taxes

  $(15,664) $(118,047) $(92,156)
             

Depreciation and amortization expense

    

Body & Chassis

  $68,562  $62,176  $74,100 

Fluid

   60,611   64,500   57,033 

Asia Pacific

   4,741   5,729   5,201 

Eliminations and other

   4,519   3,644   3,771 
             

Consolidated

  $138,433  $136,049  $140,105 
             

Capital expenditures

    

Body & Chassis

  $36,506  $55,614  $54,691 

Fluid

   32,403   39,222   19,358 

Asia Pacific

   11,102   9,165   8,299 

Eliminations and other

   2,863   3,254   9,777 
             

Consolidated

  $82,874  $107,255  $92,125 
             

Segment assets

    

Body & Chassis

   $1,153,013  $978,953 

Fluid

    811,715   668,272 

Asia Pacific

    89,568   83,253 

Eliminations and other

    107,959   87,773 
          

Consolidated

   $2,162,255  $1,818,251 
          

Net interest expense included in segment profit for Body & Chassis totaled $43,503, $43,831 and $58,187 for the years ended December 31, 2006, 2007 and 2008, respectively, Fluid totaled $40,447, $41,971 and $28,662 for the years ended December 31, 2006, 2007 and 2008, respectively, Asia Pacific totaled $3,197, $3,775 and $6,045 for the years ended December 31, 2006, 2007 and 2008, respectively.

Restructuring costs included in segment profit for Body & Chassis totaled $19,454, $17,553 and $12,502 for the years ended December 31, 2006, 2007 and 2008, respectively, Fluid totaled $4,450, $8,771 and $19,321 for the years ended December 31, 2006, 2007 and 2008, respectively, Asia Pacific totaled $1, $62, and $6,031 for the years ended December 31, 2006, 2007 and 2008, respectively, Eliminations and other totaled $0, $0, and $446 for the years ended December 31, 2006, 2007 and 2008, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

 

Geographic information for revenues, based on country of origin, and long-lived assets is as follows:

 

  Predecessor  Successor 
  For the Year Ended   Five Months  Ended
May 31, 2010
  Seven Months  Ended
December 31, 2010
 
  2006  2007  2008  2008   2009    

Revenues

             

United States

  $806,630  $857,051  $668,500  $668,500    $516,411    $277,109   $382,089  

Canada

   392,329   380,793   304,652   304,652     175,670     102,863    141,988  

Mexico

   258,117   288,614   271,271   271,271     218,225     128,766    215,342  

Germany

   210,796   324,305   440,393   440,393     277,859     118,314    149,404  

Other

   496,390   660,390   909,761   909,761     757,094     382,076    516,196  
                        

Consolidated

  $2,164,262  $2,511,153  $2,594,577  $2,594,577    $1,945,259    $1,009,128   $1,405,019  
                        

Tangible long-lived assets

             

United States

    $178,797  $167,287    $138,098     $122,866  

Canada

     80,056   50,773     48,450      50,487  

Mexico

     60,330   55,295     54,363      51,141  

Germany

     125,766   108,608     102,796      121,328  

Other

     277,424   242,024     242,472      243,682  
                   

Consolidated

    $722,373  $623,987    $586,179     $589,504  
                   

Net salesSales to customers of the Company which contributed ten percent or more of its total consolidated net sales and the related percentage of consolidated Company sales for 2006, 2007,2008, 2009 and 20082010 are as follows:

 

  2006
Percentage of
Combined
Net Sales
 2007
Percentage of
Combined
Net Sales
 2008
Percentage of
Combined
Net Sales
   2008
Percentage  of
Combined
Net Sales
 2009
Percentage  of
Combined
Net Sales
 2010
Percentage  of
Combined
Net Sales
 

Customer

        

Ford

  29% 27% 25%   25  31  28

General Motors

  25% 20% 16%   16  14  16

DaimlerChrysler

  10% —    —   

19.21. Fair Value of Financial Instruments

Fair values of the SeniorPredecessor’s prepetition senior notes and Senior Subordinated Notesprepetition senior subordinated notes approximated $443,400 and $146,900$256,106 at December 31, 2007 and 2008,2009, based on quoted market prices, compared to the recorded values totaling $530,500 and $523,500, respectively.$505,300. Fair values of the Term LoansPredecessor’s term loans approximated $247,600$512,828 at December 31, 2008,2009, based on quoted market prices, compared to the recorded values totaling $530,000.$520,637. As a result of the adoption of fresh-start accounting, all remaining amounts recorded related to the Predecessor’s prepetition senior notes, prepetition senior subordinated notes, and term loans were eliminated. See Note 4. “Fresh-Start Accounting.”

Fair values of the Debtors’ DIP Credit Agreement borrowings approximated $177,188 at December 31, 2009, based on quoted market prices, compared to the recorded value totaling $175,000. Upon the Company’s emergence from bankruptcy, the borrowings under the DIP Credit Agreement were repaid.

Fair values of the Senior Notes approximated $477,563 at December 31, 2010, based on quoted market prices, compared to the recorded value of $450,000.

The Company uses derivative financial instruments, including forwardsforward and swap contracts to manage its exposures to fluctuations in foreign exchange, interest rates and commodity prices. For a fair value hedge, both the effective and ineffective, if significant, portions are recorded in earnings and reflected in the consolidated statement of operations. For a cash flow hedge, the effective portion of the change in the fair value of the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

derivative is recorded in accumulated other comprehensive income (loss) in the consolidated balance sheet. The ineffective portion, if significant, is recorded in other income or expense. Historically, the ineffective portion has been nominal. When the underlying hedged transaction is realized or the hedged transaction is no longer probable, the gain or loss included in accumulated other comprehensive income (loss) is recorded in earnings and reflected in the consolidated statement of operations on the same line as the gain or loss on the hedged item attributable to the hedged risk.

The Company formally documents its hedge relationships, including the identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the cash flow hedges. The Company also formally assesses whether a cash flow hedge is highly effective in offsetting changes in the cash flows of the hedged item. Derivatives are recorded at fair value in other current and long-term assets, accrued liabilities and other current and long-term liabilities.

For a net investment hedgeDerivative Instruments and Hedging Activities

The Predecessor’s failure to make the fair valuescheduled interest payments on its prepetition senior notes and prepetition senior subordinated notes and the expiration of the applicable 30-day grace period on July 16, 2009 constituted a “cross-default” under the Company’s ISDA Agreements in the names of CSA U.S., CSA Canada and Cooper-Standard Automotive International Holdings B.V., with its various senior lenders as counterparties. As a result, the counterparties to certain outstanding derivative contracts under these ISDA Agreements elected to exercise their option of early termination under such contracts. Certain interest rate, foreign exchange and commodity swap derivatives that were designated under ASC 815 as cash flow hedges were terminated for the purposes of ASC 815 as a result of the failure to make the interest payment and in anticipation of the termination events. The values of these terminated derivatives, totaling $18,081, were classified as liabilities subject to compromise and were repaid upon emergence from bankruptcy.

Cash Flow Hedges

Forward foreign exchange contracts – The Company enters into forward foreign exchange contracts to hedge currency risk. The forward contracts are used to mitigate the potential volatility to earnings and cash flow arising from changes in currency exchange rates that impact the Company’s foreign currency transactions. The gain or loss on the forward contracts is recorded in cumulative translation adjustment, which isreported as a component of other comprehensive income (loss) (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The amounts reclassified from accumulated other comprehensive income (loss) in(“AOCI”) into cost of products sold were $126 and $123 for the consolidated balance sheet. During 2008, gains of $2,791five months ended May 31, 2010 and seven months ended December 31, 2010, respectively. At December 31, 2010 all forward foreign exchange contracts were recorded in accumulated other comprehensive income (loss).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)settled.

(Dollar amounts in thousands except per share amounts)

Interest Rate Swapsrate swapsThe Company has entered intoan interest rate swap contractscontract to manage cash flow fluctuations of variable rate debt due to changes in market interest rates. Interest rate swap contractsThis contract which fixfixes the interest paymentspayment of a certain variable rate debt instruments or fix the market rate component of anticipated fixed rate debt instruments areinstrument is accounted for as a cash flow hedges.

hedge. As of December 31, 2008,2010, the USD notional amount of this contract was $6,611. At December 31, 2010, the fair value before taxes of the Company’s interest rate swap contracts representing $309,105 of notional amount were outstanding with maturity dates of December, 2010 through September, 2013. The above amount includes $161,649 of notional amount pertaining to the swap of USD denominated debt fixed at 5.764%contract was $(300) and $59,850 of notional fixed at 3.19%, $14,677 pertaining to the Canadian dollar denominated debt fixed at 4.91% and $11,601 of notional amount pertaining to EURO denominated debt fixed at 4.14%. The above notional amount also includes $61,329 of a USD denominated swap with a counterparty that no longer qualifies for cash flow hedge accounting due to the counterparty filing for bankruptcy protection. These contracts modify the variable rate characteristics of the Company’s variable rate debt instruments, which are generally set at three-month USD LIBOR rates, Canadian Dollar Bankers Acceptance Rates or six-month Euribor rates. The remaining $61,329 of notional amount is a pay float, receive 3.67% fixed swap to offset the effects of the swap that no longer qualifies for cash flow hedge accounting.

On September 15, 2008, a counterparty on one of the Company’s USD swaps filed for bankruptcy protection. The swap was de-designated as a cash flow hedge for accounting purposes. The de-designation of this hedge relationship resulted in the following actions:

As the underlying cash flow risk this swap was designed to hedge remains highly probable of occurring, the amount of net losses of $(4,350) that were recorded in accumulated other comprehensive income (loss) (“OCI”) pertaining to this swap will be amortized to interest expense over the remaining life of the anticipated hedge relationship which would have normally terminated in December 2011.

Recognizing the change in fair market value of the swap from the last date the hedge was effective to September 30, 2008. This change in market value was a decrease in swap liability from $(4,350) to $(3,852) or a gain of $498.

On September 30, 2008 the Company executed a new off-setting swap to neutralize the future impact of changes in market value of the de-designated swap. The off-setting swap covers an identical notional amount of $61,329, uses the same 3-month LIBOR, and pays a fixed coupon of 3.67% until its maturity in December 2011. This swap will not be designated as a cash flow hedge under SFAS No. 133, “Accounting for Derivative instruments and Hedging Activities”, and as a result will be marked to market. This will serve to offset the earnings impact of the future changes in market value of the de-designated swap.

On November 12, 2008, the Company executed a new interest rate swap. This swap is designed to modify the variable rate characteristics of the debt instruments and is designated as a cash flow hedge for accounting purposes. This new swap with a pay fixed at 3.19% was put in place to cover the lost interest-rate-fluctuation shield caused by the de-designation discussed above.

On December 24, 2008, the Company unwound one of the interest rate swaps which resulted in cash settlements on January 2, 2009 of $9,850 including accrued interest of $383 to the counterparty that required, per the ISDA that covered the swap contract, to terminate the swap upon the Company’s credit rating falling below B3.

Upon termination the swap was de-designated as a cash flow hedge for accounting purposes. The de-designation of this hedge relationship resulted in the following actions:

As the underlying cash flow risk this swap was designed to hedge remains highly probable of occurring, the amount of net losses of $(9,467) million that were recorded in accumulated other

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

comprehensive income (loss) pertaining to this will be amortized to interest expense over the remaining life of the anticipated hedge relationship which was to have terminated in December 2011.

As of December 31, 2008, the $(21,023) fair market value of the swaps was recorded in accrued liabilities $(15,436), and other long-term liabilities $(5,587). An amount $(20,301),in the Company’s consolidated balance sheet with the offset AOCI, net of taxes, was recorded as net losses in the accumulated other comprehensive income (loss). This amount includes $(13,252)deferred taxes. The amounts reclassified from AOCI into interest expense for this swap were $102 and $132 for the de-designated/terminated swaps as the balance remaining on the OCI pertaining to these swaps is to be amortized over the remaining life of the underlying debt until December 2011. The fair market value of all outstanding interest rate swap contracts is subject to change in value due to change in interest rates. During 2008 losses of $5,496 were reclassified from accumulated other comprehensive income (loss) into earnings. The Company expects approximately $10,568 of net losses to be reclassified in 2009.

Forward foreign exchange contracts – The Company uses forward foreign exchange contracts to reduce the effect of fluctuations in foreign exchange rates on Term Loan B, a U.S. dollar denominated obligation of our Canadian subsidiary, a portion of our Euro Term Loan E,five months ended May 31, 2010 and short-term foreign currency denominated intercompany transactions. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transactions in an effort to reduce the earnings volatility resulting from fluctuations in foreign exchange rates. The currencies hedged by these arrangements are the Canadian Dollar, Euro and Brazilian Real. Gains of $12,855 related to these contracts were recorded in other income (expense) during the yearseven months ended December 31, 2008. As of December 31, 2008 the fair market value of these contracts was approximately $7,968.

The Company also uses forward foreign exchange contracts to hedge the Mexican peso to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted operating expenses of our Mexican facilities. These contracts are designated as cash flow hedges. As of December 31, 2008, forward foreign exchange contracts representing $45,650 of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $(7,023). A 10% strengthening of the U.S. dollar relative to the Mexican peso would result in a decrease of $2,833 in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Mexican peso would result in an increase of $3,598 in the fair market value of these contracts.

The Company also uses forward foreign exchange contracts to hedge the U.S. dollar to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted material purchases of our Canadian facilities. As of December 31, 2008, forward foreign exchange contracts representing $26,800 of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $3,390. A 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in an increase of $2,625 million in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Canadian dollar would result in a decrease of $2,625 million in the fair market value of these contracts.

The Company also uses forward foreign exchange to hedge the U.S. dollar to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted material purchases of our European facilities. As of December 31, 2008, forward foreign exchange contracts representing $14,688 of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $295. A 10% strengthening of the U.S. dollar relative to the Euro would result in an increase of $1,605 million in the fair market value of these contracts. A 10% weakening of the U.S. dollar relative to the Euro would result in a decrease of $1,313 million in the fair market value of these contracts.

The Company also uses forward foreign exchange to hedge the Czech Koruna (CZK) to reduce the effect of fluctuations in foreign exchange rates on a portion of the forecasted operating expenses of our European facilities. As of December 31, 2008, forward foreign exchange contracts representing $14,820 of notional amount were outstanding with maturities of less than twelve months. The fair market value of these contracts was approximately $(1,027). A 10% strengthening of the Euro relative to the CZK would result in a decrease of $1,235 million in the fair market value of these contracts. A 10% weakening of the Euro relative to the CZK would result in an increase of $1,509 million in the fair market value of these contracts.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share amounts)

During 2008 gains of $2,185 related to the forward foreign exchange contracts were reclassified from accumulated other comprehensive income (loss) into earnings.2010, respectively. The amount to be reclassified in 2009the next twelve months is expected to be approximately $(4,365).$144. The maturity date of this interest rate swap contract is September 2013.

Commodity price hedges – The Company has exposure to the prices of commodities in the procurement of certain raw materials. The primary purpose of the Company’s commodity price hedging activities is to manage the volatility associated with these forecasted purchases. The Company primarily utilizes forward contracts with maturities of less than 24 months, which are accounted for as cash flow hedges. These instruments are intended to offset the effect of changes in commodity prices on forecasted inventory purchases. As of December 31, 2008, commodity contracts for carbon black and natural gas representing $11,728 of notional amount were outstanding with a fair market value of approximately $(4,950). A 10% change in the underlying commodity prices would result in a $489 change in the fair market values of these contracts. During 2008 losses of $1,448 were reclassified from accumulated other comprehensive income (loss) into earnings. The Company expects approximately $4,950 of losses to be reclassified in 2009.Fair Value Measurements

SFAS No. 157ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. FairAs such, fair value measurements areis a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

market-based measurement that should be determined based on one or more of the following three techniques notedupon assumptions that market participants would use in SFAS No. 157:

Market: This approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income: This approach uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.

Cost: This approach is based on the amount that would be required to replace the service capacity ofpricing an asset (replacement cost).

SFAS No. 157or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1:

Observable inputs such as quoted prices in active markets;

Level 2:

Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. The Company also considers the risk of non-performance in the estimation of fair value and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. In certain instances where market data is not available, the Company uses management judgment to develop assumptions that are used to determine fair value. Fair value measurements and the fair value hierarchy level for the Company’s liabilities measured or disclosed at fair value on a recurring basis subject to the disclosure requirements of SFAS No. 157 as of December 31, 2008 were as follows:2009 and 2010, are shown below:

 

   Liability  Level 1  Level 2  Level 3

Derivative financial instruments

  $22,370  $—    $—    $22,370
   Predecessor—2009 

Contract

  Asset
(Liability)
  Level 1   Level 2   Level 3 

Interest rate swap

  $(406 $—      $—      $(406
                   

Total

  $(406 $—      $—      $(406
                   
   Successor—2010 

Contract

  Asset
(Liability)
  Level 1   Level 2   Level 3 

Interest rate swap

  $(300 $—      $—      $(300
                   

Total

  $(300 $—      $—      $(300
                   

A reconciliation of changes in assets and liabilities related to derivative instruments measured at fair value using the market and income approach adjusted for our and our counterparty’s credit risks for the year ended December 31, 2008,2010, is shown below:

 

Balance as of January 1, 2008

  $—  

Transfers into Level 3

   22,370
    

Balance as of December 31, 2008

  $22,370
    
   Net Derivative
Liabilities
 

Beginning Balance as of January 1, 2010—Predecessor

  $406  

Total losses (realized or unrealized) included in earnings (or changes in net liabilities)

   228  

Included in other comprehensive income

   87  

Purchases, issuances and settlements

   (228
     

Balance as of May 31, 2010

  $493  

Total losses (realized or unrealized) included in earnings (or changes in net liabilities)

   161  

Included in other comprehensive income

   (99

Purchases, issuances and settlements

   (255
     

Ending Balance as of December 31, 2010—Successor

  $300  
     

The amount of total (gains) or losses for the period included in earnings (or changes in net liabilities) attributable to the change in unrealized (gains) or losses relating to assets still held at the reporting date

  $—    
     

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

(Gains) and losses (realized and unrealized) included in earnings (or changes in net liabilities) for the period (above) are reported in cost of products sold and other income (expense):

   Predecessor  Successor 
   Five Months Ended
May 31, 2010
  Seven Months Ended
December 31, 2010
 

Total losses included in earnings (or changes in net liabilities) for the period (above)

  $228   $161  

Change in unrealized losses relating to assets still held at the reporting date

   —      —    

Items measured at fair value on a non-recurring basis

In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. For further information on assets and liabilities measured at fair value on a non-recurring basis see Note 2. “Significant Accounting Policies,” Note 4. “Fresh-Start Accounting,” Note 5. “Restructuring,” Note 6. “Property, Plant and Equipment,” and Note 7. “Goodwill and Intangibles.”

22. Selected Quarterly Information (Unaudited)

   Predecessor     
   First
Quarter
  Second
Quarter
  Third
Quarter
   Fourth
Quarter
     

2009

        

Sales

  $401,768   $448,046   $517,842    $577,603    

Gross profit

   37,832    55,287    82,067     91,120    

Consolidated net income (loss)

   (55,277  (349,344  10,666     37,767    

Net income (loss) attributable to Cooper-Standard Holdings Inc.

   (54,966  (349,340  10,847     37,397    
        
   Predecessor  Successor 
   First
Quarter
  Two Months Ended
May 31, 2010
  One Month Ended
June 30, 2010
   Third
Quarter
   Fourth
Quarter
 

2010

        

Sales

  $596,324    $412,804   $215,642    $585,650    $603,727  

Gross profit

   104,504    72,423    33,767     102,091     96,811  

Consolidated net income

   3,668    632,941    4,940     21,009     15,176  

Net income attributable to Cooper-Standard Holdings Inc.

   3,409    632,878    4,930     20,833     14,813  

Net income available to Cooper-Standard Holdings Inc. common stockholders

    $3,218    $15,116    $10,395  

Basic net income per share attributable to Cooper-Standard Holdings Inc.

    $0.18    $0.86    $0.59  

Diluted net income per share attributable to Cooper-Standard Holdings Inc.

    $0.18    $0.83    $0.55  

Selected quarterly information for the reporting entity subsequent to emergence from Chapter 11 bankruptcy proceedings are not comparable to the consolidated financial statements for the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

 

Fair value measurements for non-financial assets such as goodwill, intangibles, property, plant and equipment and equity investment impairment assessments are not reflected in the disclosures above due to FASB Staff Position 157-2, which deferred the effective date of SFAS No. 157 for non-financial assets and liabilities.

20. Selected Quarterly Information (Unaudited)

   First
Quarter
  Second
Quarter
  Third
Quarter
  Fourth
Quarter
 

2007

       

Sales

  $576,261  $623,998  $602,570  $708,324 

Gross profit

   93,477   106,808   83,459   113,370 

Net income (loss)

   4,674   9,686   (12,790)  (152,563)
   First
Quarter
  Second
Quarter
  Third
Quarter
  Fourth
Quarter
 

2008

       

Sales

  $756,021  $765,639  $599,656  $473,261 

Gross profit

   119,119   117,989   62,484   34,922 

Net income (loss)

   15,672   11,587   (32,595)  (116,115)

21.23. Sale Leaseback Transaction

During the year ended December 31, 2007, the Company sold a manufacturing facility to an independent third party. Gross proceeds from this sale were $4,806. Concurrent with this sale, the Company entered into an agreement to lease the facility back from the purchaser over a lease term of 10 years. This lease is accounted for as an operating lease. A gain of $723 was deferred and is being amortized over the lease term.

During the year ended December 31, 2008, the Company sold a manufacturing facility to an independent third party and simultaneously agreed to lease the facility from that party for a period of 15 years. Gross proceeds from this sale were $8,556. The transaction is structured as an operating lease.

22.24. Guarantor and Non-Guarantor Subsidiaries

In connection with the December 2004 acquisition by the CompanyMay 27, 2010 Reorganization of the automotive segment of Cooper Tire & Rubber Company, Cooper-Standard Automotive Inc. (the “Issuer”), a wholly-owned subsidiary, issued the Senior Notes and Senior Subordinated Notes with a total principal amount of $550,000.$450,000. Cooper-Standard Holdings Inc. (the “Parent”) and all wholly-owned domestic subsidiaries of Cooper-Standard Automotive Inc. (the “Guarantors”) unconditionally guarantee the notes. The following condensed consolidated financial data provides information regarding the financial position, results of operations, and cash flows of the Guarantors. Separate financial statements of the Guarantors are not presented because management has determined that those would not be material to the holders of the notes.Senior Notes. The Guarantors account for their investments in the non-guarantor subsidiaries on the equity method. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions (dollars in millions).transactions.

CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2006

(in millions)

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

Sales

  $—    $471.3  $586.0  $1,209.7  $(102.7) $2,164.3 

Cost of products sold

   —     427.5   487.6   1,019.7   (102.7)  1,832.1 

Selling, administration, & engineering expenses

   —     106.2   44.3   49.3   —     199.8 

Amortization of intangibles

   —     21.6   2.5   6.9   —     31.0 

Impairment charges

   —     13.2   —     —     —     13.2 

Restructuring

   —     7.0   0.8   16.1   —     23.9 
                         

Operating profit (loss)

   —     (104.2)  50.8   117.7   —     64.3 

Interest expense, net of interest income

   —     (74.3)  —     (12.9)  —     (87.2)

Equity earnings

   —     (0.1)  0.3   —     —     0.2 

Other income (expense)

   —     47.2   1.8   (42.0)  —     7.0 
                         

Income (loss) before income taxes

   —     (131.4)  52.9   62.8   —     (15.7)

Provision for income tax expense (benefit)

   —     (50.3)  20.2   22.8   —     (7.3)
                         

Income (loss) before equity in income (loss) of subsidiaries

   —     (81.1)  32.7   40.0   —     (8.4)

Equity in net income (loss) of subsidiaries

   (8.4)  72.7   —     —     (64.3)  —   
                         

NET INCOME (LOSS)

  $(8.4) $(8.4) $32.7  $40.0  $(64.3) $(8.4)
                         

CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2007

(in millions)

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

Sales

  $—    $456.8  $713.9  $1,464.3  $(123.8) $2,511.2 

Cost of products sold

   —     411.9   571.8   1,254.2   (123.8)  2,114.1 

Selling, administration, & engineering expenses

   —     103.0   51.8   67.3   —     222.1 

Amortization of intangibles

   —     21.5   2.8   7.6   —     31.9 

Impairment charges

   —     143.0   3.4   —     —     146.4 

Restructuring

   —     6.3   1.1   19.0   —     26.4 
                         

Operating profit (loss)

   —     (228.9)  83.0   116.2   —     (29.7)

Interest expense, net of interest income

   —     (76.2)  —     (13.3)  —     (89.5)

Equity earnings

   —     (0.3)  2.3   0.2   —     2.2 

Other income (expense)

   —     41.5   0.2   (42.8)  —     (1.1)
                         

Income (loss) before income taxes

   —     (263.9)  85.5   60.3   —     (118.1)

Provision for income tax expense (benefit)

   —     20.3   (15.3)  27.9    32.9 
                         

Income (loss) before equity in income (loss) of subsidiaries

   —     (284.2)  100.8   32.4   —     (151.0)

Equity in net income (loss) of subsidiaries

   (151.0)  133.2   —     —     17.8   —   
                         

NET INCOME (LOSS)

  $(151.0) $(151.0) $100.8  $32.4  $17.8  $(151.0)
                         

CONSOLIDATING STATEMENT OF OPERATIONS

For the Year Ended December 31, 2008

(in millions)Predecessor

 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

Sales

  $—    $381.0  $553.7  $1,759.1  $(99.2) $2,594.6 

Cost of products sold

   —     347.7   465.4   1,546.2   (99.2)  2,260.1 

Selling, administration, & engineering expenses

   —     87.8   40.7   103.2   —     231.7 

Amortization of intangibles

   —     20.5   2.3   8.2   —     31.0 

Impairment charges

   —     24.7   2.3   6.4   —     33.4 

Restructuring

   —     5.4   4.2   28.7   —     38.3 
                         

Operating profit (loss)

   —     (105.1)  38.8   66.4   —     0.1 

Interest expense, net of interest income

   —     (77.8)  —     (15.1)  —     (92.9)

Equity earnings

   —     (4.4)  3.4   1.9   —     0.9 

Other income (expense)

   —     27.2   (0.9)  (26.6)  —     (0.3)
                         

Income (loss) before income taxes

   —     (160.1)  41.3   26.6   —     (92.2)

Provision for income tax expense (benefit)

   —     4.1   (1.1)  26.3    29.3 
                         

Income (loss) before equity in income (loss) of subsidiaries

   —     (164.2)  42.4   0.3   —     (121.5)

Equity in net income (loss) of subsidiaries

   (121.5)  42.7   —     —     78.8   —   
                         

NET INCOME (LOSS)

  $(121.5) $(121.5) $42.4  $0.3  $78.8  $(121.5)
                         

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

Sales

  $—     $381.0   $553.7   $1,759.1   $(99.2 $2,594.6  

Cost of products sold

   —      347.7    465.4    1,546.2    (99.2  2,260.1  

Selling, administration, & engineering expenses

   —      87.8    40.7    103.2    —      231.7  

Amortization of intangibles

   —      20.5    2.3    8.2    —      31.0  

Impairment charges

   —      24.7    2.3    6.4    —      33.4  

Restructuring

   —      5.4    4.2    28.7    —      38.3  
                         

Operating profit (loss)

   —      (105.1  38.8    66.4    —      0.1  

Interest expense, net of interest income

   —      (77.8  —      (15.1  —      (92.9

Equity earnings

   —      (4.4  3.4    1.9    —      0.9  

Other income (expense)

   —      27.2    (0.9  (27.7  —      (1.4
                         

Income (loss) before income taxes

   —      (160.1  41.3    25.5    —      (93.3

Provision for income tax expense (benefit)

   —      4.1    (1.1  26.3     29.3  
                         

Income (loss) before equity in income (loss) of subsidiaries

   —      (164.2  42.4    (0.8  —      (122.6

Equity in net income (loss) of subsidiaries

   (122.6  41.6    —      —      81.0    —    
                         

Consolidated net income (loss)

   (122.6  (122.6  42.4    (0.8  81.0    (122.6

Less: Net (income) loss attributable to noncontrolling interest

   —      —      —      1.1    —      1.1  
                         

Net Income (loss) attributable to Cooper-Standard Holdings Inc.

  $(122.6 $(122.6 $42.4   $0.3   $81.0   $(121.5
                         

CONSOLIDATING BALANCE SHEETNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2007

(Dollar amounts in millions)thousands except per share and share amounts)

 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals

ASSETS

         

Current assets:

         

Cash and cash equivalents

  $—    $42.6  $—    $(1.7) $—    $40.9

Accounts receivable, net

   —     52.3   105.6   388.9   —     546.8

Inventories

   —     24.4   28.9   102.0   —     155.3

Prepaid Expenses

   —     (2.3)  1.0   20.9   —     19.6

Other

   —     9.8   —     0.1   —     9.9
                        

Total current assets

   —     126.8   135.5   510.2   —     772.5

Investments in affiliates and intercompany accounts, net

   268.5   360.4   490.4   177.5   (1,260.1)  36.7

Property, plant, and equipment, net

   —     76.7   129.2   516.5   —     722.4

Goodwill

   —     248.7   17.3   24.6   —     290.6

Other assets

   —     199.6   35.0   105.5   —     340.1
                        
  $268.5  $1,012.2  $807.4  $1,334.3  $(1,260.1) $2,162.3
                        

LIABILITIES & STOCKHOLDERS’ EQUITY

         

Current liabilities:

         

Debt payable within one year

  $—    $7.6  $—    $44.4  $—    $52.0

Accounts payable

   —     60.1   33.3   202.2   —     295.6

Accrued liabilities

   —     59.1   8.1   119.1   —     186.3
                        

Total current liabilities

   —     126.8   41.4   365.7   —     533.9

Long-term debt

   —     970.8   —     117.4   —     1,088.2

Other long-term liabilities

   —     134.1   6.9   130.7   —     271.7
                        
   —     1,231.7   48.3   613.8   —     1,893.8

Total stockholders’ equity

   268.5   (219.5)  759.1   720.5   (1,260.1)  268.5
                        
  $268.5  $1,012.2  $807.4  $1,334.3  $(1,260.1) $2,162.3
                        

CONSOLIDATING BALANCE SHEET

December 31, 2008

(in millions)

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals

ASSETS

          

Current assets:

          

Cash and cash equivalents

  $—    $40.0  $—    $71.5  $—    $111.5

Accounts receivable, net

   —     53.1   65.7   233.2   —     352.0

Inventories

   —     17.1   21.2   78.7   —     117.0

Prepaid Expenses

   —     (1.1)  0.6   19.7   —     19.2

Other

   —     23.9   —     —     —     23.9
                        

Total current assets

   —     133.0   87.5   403.1   —     623.6

Investments in affiliates and intercompany accounts, net

   15.2   315.4   599.5   161.4   (1,058.1)  33.4

Property, plant, and equipment, net

   —     70.3   118.5   435.2   —     624.0

Goodwill

   —     194.1   17.3   33.6   —     245.0

Other assets

   —     149.4   17.1   125.8   —     292.3
                        
  $15.2  $862.2  $839.9  $1,159.1  $(1,058.1) $1,818.3
                        

LIABILITIES & STOCKHOLDERS’ EQUITY

          

Current liabilities:

          

Debt payable within one year

  $—    $43.5  $—    $50.6  $—    $94.1

Accounts payable

   —     36.4   25.0   131.6   —     193.0

Accrued liabilities

   —     65.6   6.7   92.3   —     164.6
                        

Total current liabilities

   —     145.5   31.7   274.5   —     451.7

Long-term debt

   —     957.5   —     92.5   —     1,050.0

Other long-term liabilities

   —     165.0   6.7   129.7   —     301.4
                        
   —     1,268.0   38.4   496.7   —     1,803.1

Total stockholders’ equity

   15.2   (405.8)  801.5   662.4   (1,058.1)  15.2
                        
  $15.2  $862.2  $839.9  $1,159.1  $(1,058.1) $1,818.3
                        

CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS

For the Year Ended December 31, 20062009

(in millions)Predecessor

 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

OPERATING ACTIVITIES

        

Net cash provided by (used in) operating activities

  $—    $37.6  $26.9  $71.4  $—    $135.9 

INVESTING ACTIVITIES

        

Property, plant, and equipment

   —     (12.5)  (26.5)  (43.9)  —     (82.9)

Acquisition of FHS, net of cash acquired

   —     (201.6)  —     —     —     (201.6)

Return on equity investment

   —     7.7   —     —     —     7.7 

Cost of equity investments

   —     (0.4)  —     (3.7)  —     (4.1)

Other

   —     (1.0)  —     0.1   —     (0.9)
                         

Net cash used in investing activities

   —     (207.8)  (26.5)  (47.5)  —     (281.8)

FINANCING ACTIVITIES

        

Proceeds from issuance of long-term debt

   —     214.8   —     —     —     214.8 

Repurchase of bonds

   —     (14.9)  —     —     —     (14.9)

Principal payments on long-term debt

   —     (9.2)  —     (37.6)  —     (46.8)

Proceeds from issuance of stock

   0.3   —     —     —     —     0.3 

Net change in intercompany advances

   (0.3)  0.3   —     —     —     —   

Other

   —     (4.3)  —     (1.5)  —     (5.8)
                         

Net cash provided by (used in) financing activities

   —     186.7   —     (39.1)  —     147.6 

Effects of exchange rate changes on cash

   —     —     —     (7.6)  —     (7.6)

Changes in cash and cash equivalents

   —     16.5   0.4   (22.8)  —     (5.9)

Cash and cash equivalents at beginning of period

   —     5.4   0.0   56.8   —     62.2 
                         

Cash and cash equivalents at end of period

  $—    $21.9  $0.4  $34.0  $—    $56.3 
                         

Depreciation and amortization

  $—    $48.9  $31.8  $57.7  $—    $138.4 
   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

Sales

  $—     $333.9   $404.6   $1,286.1   $(79.3 $1,945.3  

Cost of products sold

   —      288.1    326.9    1,143.3    (79.3  1,679.0  

Selling, administration, & engineering expenses

   —      77.4    30.4    91.7    —      199.5  

Amortization of intangibles

   —      10.2    0.9    3.9    —      15.0  

Impairment charges

   —      240.7    31.6    91.2    —      363.5  

Restructuring

   —      4.3    1.0    27.1    —      32.4  
                         

Operating profit (loss)

   —      (286.8  13.8    (71.1  —      (344.1

Interest expense, net of interest income

   —      (51.8  —      (12.5  —      (64.3

Equity earnings

   —      0.1    1.5    2.4    —      4.0  

Reorganization items, net

   —      (17.4  —      —      —      (17.4

Other income (expense), net

   —      23.4    (1.4  (12.1  —      9.9  
                         

Income (loss) before income taxes

   —      (332.5  13.9    (93.3  —      (411.9

Provision for income tax expense (benefit)

   —      65.0    (2.7  (118.0  —      (55.7
                         

Income (loss) before equity in income (loss) of subsidiaries

   —      (397.5  16.6    24.7    —      (356.2

Equity in net income (loss) of subsidiaries

   (356.2  41.3    —      —      314.9    —    
                         

Consolidated net income (loss)

   (356.2  (356.2  16.6    24.7    314.9    (356.2

Less: Net (income) loss attributable to noncontrolling interest

   —      —      —      0.1    —      0.1  
                         

Net Income (loss) attributable to Cooper-Standard Holdings Inc.

  $(356.2 $(356.2 $16.6   $24.8   $314.9   $(356.1
                         

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS

For the YearFive Months Ended May 31, 2010

Predecessor

   Parent   Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

Sales

  $—      $179.5   $223.1   $650.8   $(44.3 $1,009.1  

Cost of products sold

   —       154.2    181.7    540.6    (44.3  832.2  

Selling, administration, & engineering expenses

   —       41.9    —      50.2    —      92.1  

Amortization of intangibles

   —       0.2    —      0.1    —      0.3  

Restructuring

   —       0.1    0.1    5.7    —      5.9  
                          

Operating profit (loss)

   —       (16.9  41.3    54.2    —      78.6  

Interest expense, net of interest income

   —       (32.7  —      (11.8  —      (44.5

Equity earnings (loss)

   —       —      2.6    1.0    —      3.6  

Reorganization items, net

   —       516.6    (2.7  146.1    —      660.0  

Other income (expense)

   —       4.2    0.4    (25.8  —      (21.2
                          

Income (loss) before income taxes

   —       471.2    41.6    163.7    —      676.5  

Provision for income tax expense (benefit)

   —       39.5    (35.2  35.6    —      39.9  
                          

Income (loss) before equity in income

        

(loss) of subsidiaries

   —       431.7    76.8    128.1    —      636.6  

Equity in net income (loss) of subsidiaries

   636.6     204.9    —      —      (841.5  —    
                          

Consolidated net income (loss)

   636.6     636.6    76.8    128.1    (841.5  636.6  

Less: Net (income) loss attributable to noncontrolling interest

   —       —      —      (0.3  —      (0.3
                          

Net Income (loss) attributable to Cooper-Standard Holdings Inc.

  $636.6    $636.6   $76.8   $127.8   $(841.5 $636.3  
                          

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF OPERATIONS

For the Seven Months Ended December 31, 20072010

(in millions)Successor

 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

OPERATING ACTIVITIES

         

Net cash provided by operating activities

  $—    $(56.4) $28.2  $213.6  $—    $185.4 

INVESTING ACTIVITIES

         

Property, plant, and equipment

   —     (12.6)  (18.6)  (76.1)  —     (107.3)

Acquisition of businesses, net of cash acquired

   —     —     (10.0)  (148.7)  —     (158.7)

Gross proceeds from sale-leaseback transaction

   —     —     —     4.8   —     4.8 

Other

   —     0.1   —     1.1   —     1.2 
                         

Net cash used in investing activities

   —     (12.5)  (28.6)  (218.9)  —     (260.0)

FINANCING ACTIVITIES

         

Proceeds from issuance of long-term debt

 �� —     60.0   —     —     —     60.0 

Increase/(decrease) in short term debt

   —     1.4   —     4.8   —     6.2 

Principal payments on long-term debt

   —     (2.7)  —     (34.9)  —     (37.6)

Debt issuance costs

   —     (2.9)  —     (0.2)  —     (3.1)

Equity Contributions

   —     30.0   —     —     —     30.0 

Other

   —     (0.5)  —     —     —     (0.5)
                         

Net cash provided by (used in) financing activities

   —     85.3   —     (30.3)  —     55.0 

Effects of exchange rate changes on cash

   —     4.3   —     (0.1)  —     4.2 

Changes in cash and cash equivalents

   —     20.7   (0.4)  (35.7)  —     (15.4)

Cash and cash equivalents at beginning of period

   —     21.9   0.4   34.0   —     56.3 
                         

Cash and cash equivalents at end of period

  $—    $42.6  $(0.0) $(1.7) $—     40.9 
                         

Depreciation and amortization

  $—    $40.8  $30.8  $64.4  $—    $136.0 
   Parent   Issuer  Guarantors   Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

Sales

  $—      $248.7   $333.2    $883.9   $(60.8 $1,405.0  

Cost of products sold

   —       212.5    269.8     750.9    (60.8  1,172.4  

Selling, administration, & engineering expenses

   —       79.7    9.4     70.4    —      159.5  

Amortization of intangibles

   —       6.5    —       2.5    —      9.0  

Restructuring

   —       0.2    0.2     0.1    —      0.5  
                           

Operating profit (loss)

   —       (50.2  53.8     60.0    —      63.6  

Interest expense, net of interest income

   —       (21.2  —       (3.8  —      (25.0

Equity earnings

   —       0.2    1.9     1.3    —      3.4  

Reorganization items, net

   —       —      —       —      —      —    

Other income (expense), net

   —       33.2    0.4     (29.4  —      4.2  
                           

Income (loss) before income taxes

   —       (38.0  56.1     28.1    —      46.2  

Provision for income tax expense (benefit)

   —       (5.0  7.3     2.8    —      5.1  
                           

Income (loss) before equity in income

         

(loss) of subsidiaries

   —       (33.0  48.8     25.3    —      41.1  

Equity in net income (loss) of subsidiaries

   41.1     74.1    —       —      (115.2  —    
                           

Consolidated net income (loss)

   41.1     41.1    48.8     25.3    (115.2  41.1  

Less: Net (income) loss attributable to noncontrolling interest

   —       —      —       (0.5  —      (0.5
                           

Net Income (loss) attributable to Cooper-Standard Holdings Inc.

  $41.1    $41.1   $48.8    $24.8   $(115.2 $40.6  
                           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING BALANCE SHEET

December 31, 2009

Predecessor

   Parent  Issuer  Guarantors   Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

ASSETS

        

Current assets:

        

Cash and cash equivalents

  $—     $91.5   $0.7    $288.1   $—     $380.3  

Accounts receivable, net

   —      54.3    61.0     240.2    —      355.5  

Inventories

   —      16.4    22.9     72.3    —      111.6  

Prepaid Expenses

   —      3.4    0.4     18.4    —      22.2  

Other

   —      42.8    0.5     33.1    —      76.4  
                          

Total current assets

   —      208.4    85.5     652.1    —      946.0  

Investments in affiliates and intercompany accounts, net

   (311.0  580.2    660.4     (197.6  (696.0  36.0  

Property, plant, and equipment, net

   —      65.5    94.1     426.6    —      586.2  

Goodwill

   —      87.7    —       —      —      87.7  

Other assets

   —      11.2    3.7     66.6    —      81.5  
                          
  $(311.0 $953.0   $843.7    $947.7   $(696.0 $1,737.4  
                          

LIABILITIES & EQUITY (DEFICIT)

        

Current liabilities:

        

Debt payable within one year

  $—     $75.0   $—      $118.2   $—     $193.2  

Accounts payable

   —      37.4    14.2     114.7    —      166.3  

Accrued liabilities

   —      41.4    5.9     111.3    —      158.6  
                          

Total current liabilities

   —      153.8    20.1     344.2    —      518.1  

Liabiilities subject to compromise

   69.1    1,077.9    2.8     112.1    —      1,261.9  

Long-term debt

   —      —      —       11.1    —      11.1  

Other long-term liabilities

   —      141.3    6.4     105.1    —      252.8  
                          
   69.1    1,373.0    29.3     572.5    —      2,043.9  

Total Cooper-Standard Holdings Inc. stockholders’ equity (deficit)

   (380.1  (420.0  814.4     370.7    (696.0  (311.0

Noncontrolling interest

   —      —      —       4.5    —      4.5  
                          

Total equity (deficit)

   (380.1  (420.0  814.4     375.2    (696.0  (306.5
                          

Total liabilities and equity (deficit)

  $(311.0 $953.0   $843.7    $947.7   $(696.0 $1,737.4  
                          

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING BALANCE SHEET

December 31, 2010

Successor

   Parent   Issuer   Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 
   (dollars in millions) 

ASSETS

         

Current assets:

         

Cash and cash equivalents

  $—      $163.0    $—     $131.5   $—     $294.5  

Accounts receivable, net

   —       54.3     72.6    254.0    —      380.9  

Inventories

   —       17.4     28.3    76.3    —      122.0  

Prepaid Expenses

   —       4.3     0.6    15.2    —      20.1  

Other

   —       16.4     (5.2  29.6    —      40.8  
                           

Total current assets

   —       255.4     96.3    506.6    —      858.3  

Investments in affiliates and intercompany accounts, net

   560.5     384.5     934.5    (206.6  (1,623.8  49.1  

Property, plant, and equipment, net

   —       68.1     71.5    449.9    —      589.5  

Goodwill

   —       111.1     —      25.9    —      137.0  

Other assets

   —       105.7     (8.5  122.7    —      219.9  
                           
  $560.5    $924.8    $1,093.8   $898.5   $(1,623.8 $1,853.8  
                           

LIABILITIES & EQUITY (DEFICIT)

         

Current liabilities:

         

Debt payable within one year

  $—      $—      $—     $19.9   $—     $19.9  

Accounts payable

   —       34.2     25.5    116.3    —      176.0  

Accrued liabilities

   —       79.8     11.2    121.6    —      212.6  
                           

Total current liabilities

   —       114.0     36.7    257.8    —      408.5  

Long-term debt

   —       450.0     —      6.8    —      456.8  

Other long-term liabilities

   —       153.7     5.9    135.5    —      295.1  
                           
   —       717.7     42.6    400.1    —      1,160.4  

Preferred Stock

   —       130.3     —      —      —      130.3  

Total Cooper-Standard Holdings Inc. stockholders’ equity (deficit)

   560.5     76.8     1,051.2    495.8    (1,623.8  560.5  

Noncontrolling interest

   —       —       —      2.6    —      2.6  
                           

Total equity (deficit)

   560.5     76.8     1,051.2    498.4    (1,623.8  563.1  
                           

Total liabilities and equity (deficit)

  $560.5    $924.8    $1,093.8   $898.5   $(1,623.8 $1,853.8  
                           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2008

(in millions)Predecessor

 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations  Consolidated
Totals
 

OPERATING ACTIVITIES

        

Net cash provided by operating activities

  $0.5  $(24.0) $12.2  $147.8  $—    $136.5 

INVESTING ACTIVITIES

        

Property, plant, and equipment

   —     (9.1)  (12.5)  (70.6)  —     (92.2)

Gross proceeds from sale-leaseback transaction

   —     —     —     8.6   —     8.6 

Other

   —     4.1   0.3   5.3   —     9.7 
                         

Net cash used in investing activities

   —     (5.0)  (12.2)  (56.7)  —     (73.9)

FINANCING ACTIVITIES

        

Increase/(decrease) in short term debt

   —     35.8   —     1.2   —     37.0 

Principal payments on long-term debt

   —     (2.9)  —     (13.6)  —     (16.5)

Repurchase of bonds

   —     (5.3)  —     —     —     (5.3)

Other

   (0.5)  (0.5)  —     (0.1)  —     (1.1)
                         

Net cash provided by (used in) financing activities

   (0.5)  27.1   —     (12.5)  —     14.1 

Effects of exchange rate changes on cash

   —     (0.7)  —     (5.4)  —     (6.1)

Changes in cash and cash equivalents

   —     (2.6)  —     73.2   —     70.6 

Cash and cash equivalents at beginning of period

   —     42.6   —     (1.7)  —     40.9 
                         

Cash and cash equivalents at end of period

  $—    $40.0  $—    $71.5  $—    $111.5 
                         

Depreciation and amortization

  $—    $37.7  $24.8  $77.6  $—    $140.1 

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations   Consolidated
Totals
 
   (dollars in millions) 

OPERATING ACTIVITIES

        

Net cash provided by operating activities

  $0.5   $(24.0 $12.2   $147.8   $—      $136.5  

INVESTING ACTIVITIES

        

Property, plant, and equipment

   —      (9.1  (12.5  (70.6  —       (92.2

Gross proceeds from sale-leaseback transaction

   —      —      —      8.6    —       8.6  

Other

   —      4.1    0.3    5.3    —       9.7  
                          

Net cash used in investing activities

   —      (5.0  (12.2  (56.7  —       (73.9

FINANCING ACTIVITIES

        

Increase/(decrease) in short term debt

   —      35.8    —      1.2    —       37.0 ��

Principal payments on long-term debt

   —      (2.9  —      (13.6  —       (16.5

Repurchase of bonds

   —      (5.3  —      —      —       (5.3

Other

   (0.5  (0.5  —      (0.1  —       (1.1
                          

Net cash provided by (used in) financing activities

   (0.5  27.1    —      (12.5  —       14.1  

Effects of exchange rate changes on cash

   —      (0.7  —      (5.4  —       (6.1

Changes in cash and cash equivalents

   —      (2.6  —      73.2    —       70.6  

Cash and cash equivalents at beginning of period

   —      42.6    —      (1.7  —       40.9  
                          

Cash and cash equivalents at end of period

  $—     $40.0   $—     $71.5   $—      $111.5  
                          

Depreciation and amortization

  $—     $37.7   $24.8   $77.6   $—      $140.1  

23.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Year Ended December 31, 2009

Predecessor

   Parent   Issuer  Guarantors  Non-Guarantors  Eliminations   Consolidated
Totals
 
   (dollars in millions) 

OPERATING ACTIVITIES

         

Net cash provided by (used in) operating activities

  $—      $(32.3 $9.1   $153.1   $—      $129.9  

INVESTING ACTIVITIES

         

Property, plant, and equipment

   —       (4.3  (7.0  (34.8  —       (46.1

Fixed asset proceeds

   —       —      0.2    0.4    —       0.6  
                           

Net cash used in investing activities

   —       (4.3  (6.8  (34.4  —       (45.5

FINANCING ACTIVITIES

         

Increase/(decrease) in short term debt

   —       81.7    —      96.5    —       178.2  

Principal payments on long-term debt

   —       (2.3  —      (9.3  —       (11.6

Repurchase of bonds

   —       (0.7  —      —      —       (0.7

Other

   —       10.5    (1.7  (8.6  —       0.2  
                           

Net cash provided by (used in) financing activities

   —       89.2    (1.7  78.6    —       166.1  

Effects of exchange rate changes on cash

   —       (1.1  0.1    19.3    —       18.3  

Changes in cash and cash equivalents

   —       51.5    0.7    216.6    —       268.8  

Cash and cash equivalents at beginning of period

   —       40.0    —      71.5    —       111.5  
                           

Cash and cash equivalents at end of period

  $—      $91.5   $0.7   $288.1   $—      $380.3  
                           

Depreciation and amortization

  $—      $26.8   $22.3   $64.7   $—      $113.8  

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Five Months Ended May 31, 2010

Predecessor

   Parent   Issuer  Guarantors  Non-Guarantors  Eliminations   Consolidated
Totals
 
   (dollars in millions) 

OPERATING ACTIVITIES

         

Net cash used in operating activities

  $—      $(122.8 $(0.3 $47.7   $—      $(75.4

INVESTING ACTIVITIES

         

Property, plant, and equipment

   —       (3.0  (4.0  (15.9  —       (22.9

Fixed asset proceeds

   —       —      3.6    0.2    —       3.8  
                           

Net cash provided by (used in) investing activities

   —       (3.0  (0.4  (15.7  —       (19.1

FINANCING ACTIVITIES

         

Increase/(decrease) in short term debt

   —       (75.0  —      (102.1  —       (177.1

Principal payments on long-term debt

   —       (595.5  —      (114.0  —       (709.5

Proceeds from issuance of stock

   —       355.0    —      —      —       355.0  

Debt issuance costs

   —       (30.9  —      (0.1  —       (31.0

Proceeds from issuance of long-term debt

   —       450.0    —      —      —       450.0  
                           

Net cash provided by (used in) financing activities

   —       103.6    —      (216.2  —       (112.6

Effects of exchange rate changes on cash

   —       (0.3  —      5.8    —       5.5  

Changes in cash and cash equivalents

   —       (22.5  (0.7  (178.4  —       (201.6

Cash and cash equivalents at beginning of period

   —       91.5    0.7    288.1    —       380.3  
                           

Cash and cash equivalents at end of period

  $—      $69.0   $—     $109.7   $—      $178.7  
                           

Depreciation and amortization

  $—      $6.5   $6.6   $22.6   $—      $35.7  

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Seven Months Ended December 31, 2010

Successor

   Parent  Issuer  Guarantors  Non-Guarantors  Eliminations   Consolidated
Totals
 
   (dollars in millions) 

OPERATING ACTIVITIES

        

Net cash used in operating activities

  $3.2   $65.0   $6.3   $96.1   $—      $170.6  

INVESTING ACTIVITIES

        

Property, plant, and equipment

   —      (10.2  (6.3  (37.9  —       (54.4

Fixed asset proceeds

   —      2.3    —      0.3    —       2.6  
                          

Net cash provided by (used in) investing activities

   —      (7.9  (6.3  (37.6  —       (51.8

FINANCING ACTIVITIES

        

Increase/(decrease) in short term debt

   —      —      —      3.9    —       3.9  

Principal payments on long-term debt

   —      (0.1  —      (2.0  —       (2.1

Other

   (3.2  37.0    —      (37.0  —       (3.2
                          

Net cash provided by (used in) financing activities

   (3.2  36.9    —      (35.1  —       (1.4

Effects of exchange rate changes on cash

   —      —      —      (1.6  —       (1.6

Changes in cash and cash equivalents

   —      94.0    —      21.8    —       115.8  

Cash and cash equivalents at beginning of period

   —      69.0    —      109.7    —       178.7  
                          

Cash and cash equivalents at end of period

  $—     $163.0   $—     $131.5   $—      $294.5  
                          

Depreciation and amortization

  $—     $17.1   $10.3   $39.3   $—      $66.7  

25. Accounts Receivable Factoring

As a part of its working capital management, the Company sells certain receivables through third party financial institutions without recourse. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company.

At December 31, 2008,2009 and 2010, the Company had $43,544$39,703 and $38,347, respectively, of receivables outstanding under receivable transfer agreements entered into by various locations. For the year ended December 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2010, total accounts receivables factored was $115,468, $40,592 and $70,297, respectively. The Company incurred a loss on the sale of receivables of $950, $377 and $715 for the year ended 2009, the five months ended May 31, 2010 and the seven months ended December 31, 2008 of $2,219; this amount is2010, respectively; these amounts are recorded in other income (expense) in the Consolidated Statementsconsolidated statements of Operations.operations. The Company continues to service the receivables for one of the locations. These are permitted transactions under the Company’s credit agreement.agreement and Senior Notes indenture. The Company is also pursuing similar arrangements in various locations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands except per share and share amounts)

In addition, during the second quarter of 2009, the Company elected to participate in the Auto Supplier Support Program sponsored by the U.S. Treasury Department. The Auto Supplier Support Program is designed to provide eligible suppliers with access to government-backed protection on those Chrysler and GM U.S. dollar receivables that are accepted into the program. In applying for the program, the Company selected the program option that provides government-backed protection on collection of the receivables and expedited payment terms, for which a charge of 3% of the accepted receivables is applicable. The Company was designated by both Chrysler and GM as an eligible supplier. During the year ended December 31, 2009, the Company received payments of $8,936 and incurred charges of $268 which is recorded in other income (expense) in the consolidated statements of operations.

26. Subsequent Events

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

ScheduleSCHEDULE II

Valuation and Qualifying Accounts

(dollars in millions)

 

Description

  Balance at
beginning
of period
  Acquisition (b)  Charged to
Expenses
  Charged
(credited)
to other
accounts (a)
  Deductions  Balance at
end of
period

Allowance for doubtful accounts deducted from accounts receivable

         

Year ended December 31, 2006

  $5.4  5.8  5.5  0.7  (7.3) $10.1

Year ended December 31, 2007

  $10.1  0.9  0.1  0.8  (1.7) $10.2

Year ended December 31, 2008

  $10.2  —    (1.4) (2.1) (2.7) $4.0

Inventory reserve account deducted from inventories

         

Year ended December 31, 2006

  $6.3  2.0  3.8  0.6  (1.7) $11.0

Year ended December 31, 2007

  $11.0  2.1  4.0  1.0  (3.3) $14.8

Year ended December 31, 2008

  $14.8  —    0.9  (1.1) (3.8) $10.8

Description

 

Balance at
beginning
of period

  

Other
Changes

  

Charged to
Expenses

  

Charged
(credited)
to other
accounts(a)

  

Deductions

  

Balance at
end of
period

 

Allowance for doubtful accounts deducted from accounts receivable

      

Year ended December 31, 2008—Predecessor

 $10.2    —      (1.4  (2.1  (2.7 $4.0  

Year ended December 31, 2009—Predecessor

 $4.0    —      0.9    2.5    (1.6 $5.8  

Five months ended May 31, 2010—Predecessor

 $5.8    (3.7)(b)   (0.2  (1.0  (0.9 $—    

Seven months ended December 31, 2010—Successor

 $—      —      0.9    0.1    —     $1.0  

Inventory reserve account deducted from inventories

      

Year ended December 31, 2008—Predecessor

 $14.0    —      5.9    (1.6  (4.1 $14.2  

Year ended December 31, 2009—Predecessor

 $14.2    —      10.9    1.1    (9.0 $17.2  

Five months ended May 31, 2010—Predecessor

 $17.2    (17.6)(c)   2.9    (1.3  (1.2 $—    

Seven months ended December 31, 2010—Successor

 $—      —      1.9    0.6    —     $2.5  

 

(a)Primarily foreign currency translation.
(b)2006 relates to FHS acquisition.“Other Changes” includes fresh-start accounting adjustments of $3.7 million
(c)“Other Changes” includes fresh-start accounting adjustments of $17.6 million

2007 relates to MAPS acquisition.

   Balance at
beginning
of period
  Additions  Deductions (a)  Balance at
end of
period

Description

    Charged to
Income
  Charged to
Equity
   

Tax valuation allowance

        

Year ended December 31, 2006

  $71.0  12.8  —    (3.0) 80.8

Year ended December 31, 2007

  $80.8  56.4  (3.3) (5.1) 128.8

Year ended December 31, 2008

  $128.8  45.2  21.4  (20.2) 175.2

Description

  

Balance at
beginning
of period

   Additions  

Deductions(a)

  

Balance at
end of
period

 
    

Charged to
Income

  

Charged to
Equity

   

Tax valuation allowance

       

Year ended December 31, 2008—Predecessor

  $128.8     45.2    21.4    (20.2 $175.2  

Year ended December 31, 2009—Predecessor

  $175.2     39.9    (4.5  —     $210.6  

Five months ended May 31, 2010—Predecessor

  $210.6     (38.9  (9.9  —     $161.8  

Seven months ended December 31, 2010—Successor

  $161.8     (3.5  (2.9  —     $155.4  

 

(a)Net reduction in tax valuation allowance is a result of the reversal of valuation allowances set up through purchase accounting and reversed through goodwill as a result of utilization of tax loss carryforwards and other cumulative book/tax difference.

 

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A(T).9A.Controls and Procedures.

The Company has evaluated, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Report. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. However, basedDecember 31, 2010. Based on that evaluation, the Company’s Chief Executive Officer along with theand Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Report.December 31, 2010.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under the framework in Internal Control – Control—Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2008.2010.

This annual report does not include anThe attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestationreporting is set forth in item 8. “Consolidated Financial Statements and Supplementary Date,” under the caption “Report of Independent Registered Public Accounting Firm on Internal control over Financial Reporting” and incorporated herein by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.reference.

There was no change in the Company’s internal control over financial reporting that occurred during the fourth quarter ended December 31, 2008,2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Item 9B.Other Information.

None.

PART III

 

Item 10.Directors, and Executive Officers and Corporate Governance

The following table sets forth information about our currentInformation concerning the Company’s directors, corporate governance guidelines, Compensation Committee and Governance Committee appears in the Company’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders under the headings “The Board’s Committees and Their Functions” and “Corporate Governance” and is incorporated herein by reference. Information concerning the Company’s executive officers and other named officers.is contained at the end of Part I of this Annual Report on Form 10-K under the heading “Executive Officers.”

Name

Age

Position

James S. McElya

61Chairman, Director, and Chief Executive Officer

Edward A. Hasler

59Vice Chairman, Director, and President, North America

Allen J. Campbell

51Chief Financial Officer

Keith D. Stephenson

48President, International

Gerald J. Cardinale

41Director

Gary L. Convis

66Director

Jack Daly

42Director

S.A. (Tony) Johnson

68Director

Leo F. Mullin

66Director

James A. Stern

58Director

Stephen A. Van Oss

54Director

Kenneth L. Way

69Director

James S. McElya is our Chairman of the Board of Directors and Chief Executive Officer, a position he has held since March 2009 and previously held from September 2006 to July 2008. He served as executive Chairman from July 2008 to March 2009. Mr. McElya served as President and Chief Executive Officer from the date of the 2004 Acquisition to September 2006. He has been a director of the Company since the 2004 Acquisition. He was President, Cooper-Standard Automotive and a corporate Vice President of Cooper Tire & Rubber Company from June 2000 until the 2004 Acquisition. Mr. McElya has over 33 years of automotive experience. He was previously President of Siebe Automotive Worldwide, a division of Invensys, PLC and spent 22 years with Handy & Harman in various executive management positions, including President, Handy & Harman Automotive, and Corporate Vice President of the parent company. Mr. McElya is the current Chairman of the Board of Directors of the Motor & Equipment Manufacturers Association and is a past Chairman and current member of the Board of Directors of the Original Equipment Supplier Association. He is a member of the Board of Directors of the National Alliance for Accessible Golf.Audit Committee

Edward A. Hasler is our Vice Chairman and President, North America, a position he has held since March 2009. He has been a director ofInformation regarding the Company since March 2009. Mr. Hasler served as President and Chief Executive Officer from July 2008 to March 2009. He served as President and Chief Operating Officer from September 2006 to July 2008. Mr. Hasler was President, Global Sealing Systems fromAudit Committee, including the date of the 2004 Acquisition to September 2006. He was the President of the Global Sealing Systems Division and a corporate Vice President of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition. Mr. Hasler was employed from 2000 to 2001 in Germany as Managing Director, Europe for GDX Corporation. Prior to joining GDX, Mr. Hasler had been with Cooper Tire for nearly 15 years. At Cooper Tire, Mr. Hasler held several senior posts including Vice President, Operations; and Vice President, Controller. He has both an MBA and a BS in Business Administration.

Allen J. Campbell is our Chief Financial Officer, a position he has held since the 2004 Acquisition. He was Vice President, Asian Operations of the Cooper-Standard Automotive division of Cooper Tire & Rubber Company from 2003 until the 2004 Acquisition and served as Vice President, Finance of the division from 1999 to 2003. Prior to joining Cooper Tire, Mr. Campbell was with The Dow Chemical Company for 18 years and held executive finance positions for both U.S. and Canadian operations. Mr. Campbell is a certified public accountant and received his MBA in Finance from Xavier University.

Keith D. Stephenson is our President, International, a position he has held since March 2009. He served as President, Global Body & Chassis Systems from June 2007 to March 2009. Mr. Stephenson was Chief

Development Officer at Boler Company from January 2004 until October 2006. From 1985 to January 2004, he held various senior positions at Hendrickson, a division of Boler Company, including President of International Operations, Senior Vice President of Global Business Operations and President of the Truck Systems Group.

Gerald J. Cardinale has been a director of the Company since the 2004 Acquisition in December 2004. Mr. Cardinale is a Managing Director in the Principal Investment Area at Goldman Sachs & Co. He joined Goldman Sachs in 1992 and became a Managing Director in 2002. He serves on the Boards of Directors of Alliance Films Holdings, Inc., Sensus Metering Systems Inc., Clearwire Holdings, Inc., Cequel Communications, LLC, CSI Entertainment, CW Media Holdings, Inc., Griffon Corporation, Guthy-Renker Holdings, LLC, Legends Hospitality Holding Company, LLC and Yankees Entertainment & Sports Networks, LLC. Mr. Cardinale received an Honors B.A. from Harvard University and an M.Phil in Politics from Oxford University where he was a Rhodes Scholar.

Gary L. Convis has been a director of the Company since July 2007. Mr. Convis is Vice Chairman of Dana Holding Company, a position he has held since January 2009. He served as Dana’s Chief Executive Officer from April 2008 to January 2009. Mr. Convis retired in July 2007 as Chairman of Toyota Motor Manufacturing, Kentucky (TMMK), a position he held since 2006. Mr. Convis had previously served as President of TMMK since 2001. He also was a Managing Officer of Toyota Motor Corporation and Executive Vice President of Toyota Engineering and Manufacturing North America (TEMA), from 2003 until his retirement in 2007. Prior to serving in these roles, Mr. Convis spent 16 years at New United Motor Manufacturing, Inc., a joint venture between General Motors Corporation and Toyota. Mr. Convis also spent more than 20 years in various roles with General Motors and Ford Motor Company. Mr. Convis serves on the Boards of Directors of Dana Holding Corporation, Compass Automotive Group, Inc., and Achates Power LLC.

Jack Daly has been a director of the Company since the 2004 Acquisition in December 2004. Mr. Daly is a Managing Director in the Principal Investment Area of Goldman Sachs, where he has worked since 2000. From 1998 to 2000, he was a member of the Investment Banking Division of Goldman Sachs. From 1991 to 1997, Mr. Daly was a Senior Instructor of Mechanical & Aerospace Engineering at Case Western Reserve University. Mr. Daly currently serves as a director of Clearwire Holdings, Inc., Hawker Beechcraft Corporation, Euramax Corporation and McJunkin Redman Corporation. He earned a B.S. and M.S. in Engineering from Case Western Reserve University and an M.B.A. from the Wharton School of Business.

S.A. (Tony) Johnson has been a director of the Company since the 2004 Acquisition in December 2004. He served as the Lead Director for our Board of Directors from September 2006 to August 2008 and as our Non-Executive Chairman from the date of the 2004 Acquisition in December 2004 to September 2006. Mr. Johnson is Managing Partner of OG Partners, a private industrial management company, a position he has held since 2004. Mr. Johnson served as the Chairman of Hidden Creek Industries from May 2001 to May 2004 and was its Chief Executive Officer and President from 1989 to May 2001. Prior to forming Hidden Creek, Mr. Johnson served from 1986 to 1989 as President and Chief Operating Officer of Pentair, Inc. Mr. Johnson currently serves as director of Commercial Vehicles Group Inc. He served as a director of Dura Automotive Systems, Inc. from 1990 to 2004, serving as its Chairman from 1990 to 2003; and also served as Chairman and a director of Automotive Industries Holding, Inc. from May 1990 until its sale to Lear Corporation in August 1995.

Leo F. Mullin has been a director of the Company since May 2005. Since September 2004, he has been a Senior Advisor on a part-time basis to Goldman Sachs Capital Partners. Mr. Mullin served as President and Chief Executive Officer of Delta Air Lines from 1997 to 1999, as Chairman and Chief Executive Officer from 1999 to December 31, 2003 and as Chairman until his retirement on April 30, 2004. Previously, he served as Vice Chairman of Unicom Corporation and its principal subsidiary, Commonwealth Edison Company, from 1995 to 1997. He was an executive at First Chicago Corporation from 1981 to 1995, serving as that company’s President and Chief Operating Officer from 1993 to 1995. Mr. Mullin is a director of Johnson & Johnson Corporation, Ace Limited and the privately held companies, Euramax Corporation, Educational Management Corporation and Hawker Beechcraft Corporation.

James A. Stern has been a director of the Company since May 2007. Mr. Stern is the Chairman of The Cypress Group L.L.C., a position he has held since 1994. Mr. Stern headed Lehman Brothers’ Merchant Banking Group before leaving that firm to found Cypress. During his 20-year tenure with Lehman, he held senior management positions where he was responsible for the high yield and primary capital markets groups. He also served as co-head of investment banking and was a member of Lehman’s operating committee. Mr. Stern received his degree in Civil Engineering from Tufts University and a MBA from Harvard. Mr. Stern currently serves on the Boards of Directors of Lear Corporation and Affinia Group Inc., and is the Chairman of the Board of Trustees of Tufts University.

Stephen A. Van Osshas been a director of the Company since August 2008. Mr. Van Oss also serves as chairmanidentification of the Audit Committee of our Board of Directors. Mr. Van Oss is Senior Vice Presidentmembers and Chief Financial and Administrative officer for WESCO Distribution, Inc., a position he has held since July 2004. From 2000 to 2004, Mr. Van Oss served as Vice President and Chief Financial Officer of WESCO. He served as WESCO’s Director, Information Technology from 1997 to 2007 and as its Director, Acquisition Management in 1997. From 1995 to 1996, Mr. Van Oss served as Chief Operating Officer and Chief Financial Officer of Paper Back Recycling of America, Inc. He also held various management positions with Reliance Electric Corporation. Mr. Van Oss is a director of WESCO Distribution, Inc. and is a trustee of Robert Morris University.

Kenneth L. Way has been a director of the Company since the 2004 Acquisition in December 2004. Mr. Way also serves as chairman of the Compensation Committee of our Board of Directors. Mr. Way is the former Chairman and CEO of Lear Corporation. Mr. Way had been affiliated with Lear Corporation and its predecessor companies for 37 years in various engineering, manufacturing and general management capacities. Mr. Way is also a director of WESCO International, Inc., Comerica, Inc. and CMS Energy Corporation.

Committees of the Board of Directors

Our Board of Directors currently has an executive committee, an audit committee, and a compensation committee.

Executive Committee

Our executive committee currently consists of Messrs. McElya, Daly and Stern. Mr. McElya serves as the chairman of the Executive Committee. The Executive Committee has the authority to discharge all functions of the Board of Directors in the management of our business during the interim between meetings of the Board of Directors.

Audit Committee

Our audit committee currently consists of Messrs. Van Oss, Way, and Daly. Mr. Van Oss serves as the chairman of the audit committee. The Board of Directors has determined that the Company has at least two “audit committee financial experts” (as defined in Item 401(d)(5) of Regulation S-K), Messrs. Van Oss and Way, serving on the Audit Committee. Messrs. Van Oss and Way are “independent” as definedexpert,” appears in the listing standardsCompany’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders under the headings “The Board’s Committees and Their Functions” and “Corporate Governance” and is incorporated herein by reference.

Compliance with Section 16(a) of The Exchange Act

Information regarding compliance with Section 16(a) of the NASDAQ Stock Market. The audit committeeExchange Act appears in the Company’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders under the headings “Section 16(a) Beneficial Ownership Reporting Compliance” and is responsible for (i) reviewing and discussing with management and our independent auditors our annual audited financial statements and quarterly financial statements and any audit issues and management’s response; (ii) reviewing and discussing with management and our independent auditors our financial reporting and accounting standards and principles and significant changes in such standards and principles or their application; (iii) reviewing and discussing with management and our independent auditors our internal system of financial controls and disclosure controls and our risk assessment and management policies and activities; (iv) reviewing and evaluating the independence, qualifications, and performance of our independent auditors; (v) reviewing our legal compliance and ethics programs and investigating matters relating to management’s integrity, including adherence to standards of business conduct established in our policies; and (vi) taking such actions as may be required or permitted under applicable law to be takenincorporated herein by an audit committee on behalf of us and our Board of Directors.

Compensation Committee

Our compensation committee currently consists of Messrs. Way, Daly and Stern. Mr. Way serves as the chairman of the compensation committee. The compensation committee is responsible for (i) the review and approval of corporate goals, objectives and other criteria relevant to the compensation of the Chief Executive Officer and other executive officers; (ii) the evaluation of the performance of the Chief Executive Officer and other executive officers and the determination and approval of their compensation; (iii) the review and approval of executive compensation programs; (iv) the review of director compensation and director and officer indemnification and insurance matters; (v) the review and approval of contracts and transactions with executive officers; (vi) the review and approval of equity-based compensation plans and awards made pursuant to such plans; (vii) the approval, review and oversight of employee benefit plans of the Company, including the delegation of responsibility for such programs to the executive officers of the Company; and (viii) taking such actions as may be required or permitted under applicable law to be taken by a compensation committee on behalf of us and our Board of Directors.

Other Matters Concerning Directors

Securities and Exchange Commission regulations require the Company to describe certain legal proceedings, including bankruptcy and insolvency filings involving directors of the Company or companies of which a director was an executive officer. Mr. Mullin served as the Chief Executive Officer of Delta Air Lines, Inc. from 1997 through December 2003 and as its Chairman of the Board from 1999 through April 2004. Delta Air Lines filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2005.reference.

Code of Business Conduct and Ethics

We have adopted aThe Company’s Code of Business ConductEthics and Ethics Policy thatConduct applies to all of the Company’s officers, directors officers, and employees of the Company and its subsidiaries, including our chief executive officer, our chief financial officer and our controller. The Code of Business Conduct and Ethics Policy is available on ourthe Company’s website at www.cooperstandard.com. We will also posthttp://www.cooperstandard.com. To access this information, first click on our website any amendment to, or waiver from, a provision“Investors” and then click on “Code of our policies that applies to our chief executive officer, chief financial officer, or controller, and that relates to anyConduct” of the following elements of these policies: honest and ethical conduct; disclosure in reports or documents filed by the Company with the SEC and in other public communications; compliance with applicable laws, rules and regulations; prompt internal reporting of code violations; and accountability for adherence to the policies.

Company’s website.

Item 11.Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation DiscussionInformation regarding executive and Analysis describes the key principles and material elements of the Company’sdirector compensation, policies for the “Named Executive Officers” of the Company identified in the “Executive Compensation” section which begins on page 117. Much of what is discussed below, however, applies generally to the Company’s executives and is not limited to the Named Executive Officers.

The Compensation Committee with the assistance of independent executive compensation consultants, regularly reviews the various elements of the Company’s executive compensation program. In reviewing elements of compensation, the Company places considerable emphasis on performance-based compensation to ensure executives are compensated for annualInterlocks and long-term Company results. Performance-based components of compensation normally include annual bonuses tied to annual adjusted EBITDA results, long-term incentive plan awards pertaining to three year performance periods, a stock incentive planInsider Participation, and a management stock purchase plan.

In the latter part of 2008 and continuing into 2009, the Company implemented a number of cost-reduction measures in response to the general economic downturn and, in particular, the substantial decline in worldwide automotive production and sales levels. These measures included reductions in base pay, bonus opportunities and benefits applicable to salaried employees of the Company, including the Named Executive Officers, which are described under “Compensation Determinations”.

The Compensation Committee intends to review the special measures described above as economic and industry conditions develop through 2009. The Committee has engaged Hewitt Associates to assist the Company in reviewing its entire executive compensation program in 2009 to ensure that it is appropriate in light of the Company’s compensation philosophy and objectives, as well as the economic and industry environment.

Compensation Philosophy and Objectives

The objective of our current compensation program is to link executive compensation to Company performance in a manner that accomplishes the following:

enables us to attract and retain a highly qualified executive leadership team;

aligns the interests of executives with those of stockholders; and

motivates our leadership team to implement the Company’s long-term growth strategy while delivering consistently strong financial results.

The program rewards sustained enterprise value growth through incentives that are based on the achievement of performance objectives over varying time periods. As detailed below, the Company’s incentive programs emphasize specific Company or group-wide objectives over subjective, individual goals. Discretionary features of these programs allow for the recognition of achievements which the objective performance criteria do not fully measure but which further the Company’s key strategies. Base salary is designed, in general, to be near the median of the range applicable to companies deemed comparable to the Company and performance-based compensation is designed to provide opportunities above median levels in the industries in which the Company competes for executives.

Processes Relating to Executive Compensation

In May 2006, our Board of Directors established the Compensation Committee (the “Committee”) to assist in discharging the Board’s responsibilities relating to the compensation of the Company’s directors and executive officers and the oversight of compensation plans, policies and benefit programs. The Company’s human resources executives and professionals support the Committee in its work. In evaluating and determining the salary and incentive compensation of our senior leadership team, the Committee receives information from our Global Vice President,

Human Resources and recommendations from the CEO. The Committee as a whole, following discussions with the CEO, meets privately and determines the salary and incentive compensation of the CEO. Executives whose compensation is under consideration are not present during the Committee’s review meetings. The considerations, criteria and procedures applicable to these determinations are discussed under “Executive Compensation Components” beginning on page 109.

Total Compensation Review

In evaluating the compensation of the Company’s executives for 2008, the Committee engaged Towers Perrin to assess the market competitiveness of the Company’s executive compensation program with particular focus on total direct compensation, which is comprised of base salary, annual incentive award opportunities, long-term incentive award opportunities, executive perquisites other than core health and welfare benefits, and executive severance and change-in-control benefits. Towers Perrin compared the Company’s programs in these areas with those of two comparator groups: a group of eleven automotive suppliers selected on the basis of annual sales (ranging from $907 million to $12.4 billion, with a median of $5.0 billion) and a group of 50 companies from various industrial segments also selected on the basis of annual sales (ranging from $290 million to $10.7 billion, with a median of $2.7 billion), as follows:

Automotive Supplier Revenue-Based Comparator Group

•      

American Axle & Mfg

•      

Eaton Corp

•      

Navistar International

•      

ArvinMeritor

•      

Fleetwood Enterprises

•      

PPG Industries Inc

•      

CLARCOR Inc.

•      

Hayes-Lemmerz

•      

Timken Co

•      

Cooper Tire & Rubber

•      

Ingersoll-Rand Co Ltd

Broad Industrial Comparator Group

•      

Air Products and Chemicals Inc

•      

GATX Corp

•      

OMNOVA Solutions Inc

•      

American Axle & Mfg.

•      

Harley-Davidson Inc.

•      

Owens-Illinois Inc.

•      

Arctic Cat Inc.

•      

Harman International Industries

•      

Parker-Hannifin Corp

•      

ArvinMeritor Inc

•      

Harsco Corp

•      

Plum Creek Timber Co Inc

•      

Ball Corp

•      

Hayes Lemmerz

•      

Rockwell Automation Inc.

•      

Black & Decker Corp

•      

HNI Corp

•      

Smurfit-Stone Container

•      

Brady Corp

•      

IDEX Corporation

•      

Sonoco Products Co

•      

Cameron International Corp

•      

ITT Corp

•      

Steelcase Inc.

•      

Chesapeake Corp

•      

Kaman Corp

•      

Sybron

•      

CLARCOR Inc

•      

Lafarge North America

•      

Terex Corp

•      

Constar International Inc

•      

Louisiana-Pacific Corp

•      

Thomas & Betts Corp

•      

Cooper Tire & Rubber Co

•      

MeadWestvaco Corp

•      

Timken Co (The)

•      

Donaldson Co Inc.

•      

Milacron Inc.

•      

Toro Co (The)

•      

Dresser-Rand Group Inc

•      

Mine Safety Appliances Co

•      

Trinity Industries Inc

•      

Fleetwood Enterprises Inc.

•      

Monaco Coach Corp

•      

USG Corp

•      

Flowserve Corp

•      

MSC Industrial Direct Co

•      

Valmont Industries Inc

•      

Fortune Brands Inc.

•      

Navistar International Corp

Compensation Determinations

The Committee reviewed the report of Towers Perrin with the CEO and other members of executive management. The Committee considered the Towers Perrin report in determining the total compensation of senior management, but did not target any percentile level among the comparator groups used in the report in determining the appropriate level of each element of compensation for the executive leadership team. The Committee also took into account distinctions between the Company’s equity-based incentive compensation programs and those offered by many of the companies in the comparator groups arising out of the fact that the Company’s stock is not publicly traded as is the case with many of the comparator group companies. In this connection, the Committee reviewed the impact of the Company’s management stock purchase program which allows for the deferral and allocation of base and incentive compensation into stock units eligible for Company matching (described under “Executive Compensation Components – Management Stock Purchase Plan”). Taking into account the above, the survey data generally reaffirmed that compensation of the executive leadership team as then approved by the Committee was in accordance with the Company’s overall compensation strategy.

In the fourth quarter of 2008 and the first quarter of 2009, the Company, with the approval of the Committee, implemented special cost-reduction measures affecting executive compensation. These included a 10% reduction in the base pay of salaried employees in the United States and Canada, including the Named Executive Officers, commencing in January 2009 and remaining in effect through June 2009, subject to extension; the suspension of the Company’s annual bonus plan programs in the United States and Canada, including the accrual of annual bonuses payable to the Named Executive Officers, for the first half of 2009; the freezing of benefit accruals under some defined benefit retirement plans in effect in the United States and Canada, including the qualified plan applicable to the Named Executive Officers; and the suspension of Company matching contributions for 2009 under some of the Company’s qualified defined contribution plans, including the qualified plan applicable to the Named Executive Officers.

These actions did not reflect a changeReport appears in the Company’s compensation philosophy, but were taken as special measures in response to the general economic downturn and, more specifically, the substantial decline in worldwide automotive production and sales levels. It is difficult to predict how long, and to what extent, the economic and industry conditions that led to these special actions will persist. The Committee will continue to monitor these special measures in lightdefinitive Proxy Statement for its 2011 Annual Meeting of developing circumstances.

In 2009, the Committee has retained Hewitt Associates to work with management and the Committee and to conduct an executive compensation program audit. The audit will include the design of existing executive compensation programs as well as the value delivered for each executive position. It will result in an assessment of the level of alignment of the Company’s executive compensation program and plans with its strategic goals and compensation philosophy, the competitiveness of the program as compared to the external marketplace, and the technical compliance aspects of the program.

Executive Compensation Components

The elements of compensation available to the Company’s executives are:

Base Salary

Our executives are paid a base salary that is determined prior to or at the beginning of each fiscal year or upon changes in roles or positions within the Company. The Committee determines the salary of the CEO and, upon the recommendation of the CEO, the salaries of other members of the executive leadership team. The salaries of other executives are determined by the executives to whom they report, upon consultation with the CEO. Our policy is to pay base salaries that are competitive in the markets in which we compete for executives and that take into account the responsibilities and contributions of each executive. The base salary provides executives with a regular stream of income.

Bonus

Prior to or early in the fiscal year, the Committee normally establishes performance targets on which the annual incentive bonuses payable to senior executives with respect to that year will be based. The targets are generally set in terms of the adjusted EBITDA of the Company as a whole or, in the case of executives with responsibility for a Company division, the adjusted EBITDA of that division. Adjusted EBITDA is calculated in a manner similar to that applied with respect to the Company’s performance-based covenants under its Senior Credit Facilities and Indentures. “Adjusted EBITDA” (referred to as “Consolidated EBITDA” in the Senior Credit Facilities) is consolidated net income plus the sum of i) consolidated interest expense; ii) consolidated income tax expense; iii) any non-cash charges, losses or expenses; iv) most non-recurring fees, cash charges and other cash expenses; v) non-specified restructuring charges limited to 7.5% of consolidated EBITDA; vi) non-recurring fees, expenses or charges related to professional or financial advisory, financing, underwriting and other similar services related to equity offerings, investments, acquisitions, divestitures or recapitalizations; vii) extraordinary charges or losses; ix) losses related to discontinued operations; x) losses in respect of business or asset dispositions outside the ordinary course; and xi) non-recurring restructuring charges related to the integration of businesses acquired in certain acquisition transactions, subject to certain restrictions. Additional adjustments are sometimes made for extraordinary events upon approval of the Compensation Committee. Adjusted EBITDA is deemed by the Company to be an appropriate objective measurement of the financial performance of the Company or division for that year. For each executive, a bonus amount payable upon achievement of the established performance target is established by the Committee (or, in the case of executives other than the executive leadership team, by the individual to whom such executive reports). In the first quarter following the end of the fiscal year to which the bonus applies, the Committee determines whether, and to what extent, the applicable performance targets were achieved based on the Company’s financial results for the fiscal year. The Committee may take into account special circumstances and adjust applicable performance targets and bonuses. The annual incentive bonus is designed to focus the executive leadership team on the achievement of strong financial performance over a one-year period.

Based on the business plan of the Company approved by the Board of Directors for 2008, the Committee established specific Adjusted EBITDA performance levels for 2008 corresponding to “target”, “threshold” and “superior performance” bonus payment amounts also established by the Committee. All the Named Executive Officers’ bonuses except for Mr. Stephenson’s were based on the performance of the Company as a whole. For all Named Executive Officers except Mr. Stephenson , the Compensation Committee established the following Adjusted EBITDA levels for bonus payments: $282,700,000 for a pay-out of 50% of the respective executives’ target bonus; $315,000,000 for a pay-out of 100% of the respective executives’ target bonus; and $347,300,000 for a pay-out of 200% of the respective executives’ target bonus. Mr. Stephenson’s bonus was based on the performance of the Body & Chassis division. The Compensation Committee established the following Body & Chassis division Adjusted EBITDA levels for bonus payments to Mr. Stephenson: $184,000,000 for a pay-out of 50% of his target bonus; $210,000,000 for a pay-out of 100% of his target bonus; and $236,000,000 for a pay-out of 200% of his target bonus. The superior performance EBITDA level for the Company as a whole and for the Body & Chassis division was deemed to represent a goal unlikely of achievement based on the assumptions underlying the business plan, except upon performance substantially exceeding expectations. Incentive bonus awards are determined on a linear basis for Adjusted EBITDA attainment falling (1) between the “threshold” and “target” levels, or (2) between the “target” and “superior performance” levels. The threshold Adjusted EBITDA levels for 2008 were not attained by the Company or by the Body & Chassis division and therefore none of the Named Executive Officers received an annual bonus for 2008.

Long Term Incentive Compensation

The Company has a Long Term Incentive Plan (“LTIP”) which provides for the granting by the Committee of performance-based awards to executive officers covering performance periods of one year or longer. Awards are normally granted in the first quarter of each year; however, interim grants may be made in the case of new hires or promotions. At the time awards are granted, the Committee establishes performance targets and a payment scale which determines payout amounts at different levels of performance. After the end of the performance period, the Committee determines whether, and to what extent, performance targets have been achieved and the amount of any awards that have been earned. Award amounts are subject to discretionary adjustment by the Committee (they may be adjusted downward up to 80% or upward up to 150%). If a participant engages in “inimical conduct,” meaning an action or omission contrary to the best interest of the Company, before payment of an award is made, the payment is subject to forfeit. LTIP awards are designed to focus the executive leadership team on strong, sustained cash generation and have therefore been based on the achievement of operating cash flow objectives for the Company as a whole, generally over three-year performance periods.

In general, performance periods are three years in duration. At the time LTIP awards are granted, the Committee establishes a target award amount for each executive which represents the amount the executive will receive at the conclusion of the applicable performance period if performance targets are exactly met during the period. Target award amounts are based on the level of responsibility of the executive and other performance-based factors.

Since the 2004 Acquisition, LTIP awards have been based on the achievement of operating cash generation goals. Based on the business plan of the Company, the Committee establishes specific operating cash flow targets for the Company as a whole on an annual basis. The “target” performance level represents what the Committee deems to be good operating cash flow performance for the year which is reasonably capable of achievement at a high level of performance on the part of the executive leadership team and the employees of the Company, based on the assumptions and business conditions on which the business plan of the Company is based. LTIP awards for the three-year performance period ending December 31, 2008 were based on the achievement of operating cash flow targets for the years ending December 2006, 2007 and 2008. The target operating cash flow for 2006 was established at $119,500,000, for 2007 at $108,200,000 and for 2008 at $179,000,000.

At the end of each LTIP performance period, the Committee determines the extent to which the Company’s mean average operating cash flow performance during the performance period met the mean average of the annual operating cash flow targets established by the Committee during the period. Subject to the right of the Committee to make adjustmentsStockholders under the plan, LTIP award payouts are determined in accordance with the following:

Achievement Level (Average)

Payout % of
Target Opportunity

Less than 90% of mean target

0%

At 90% of mean target

50%

Each 1% over 90%

+5%

At target

100%

Each 1% above target

+10%

Stock Incentive Plan

Effective as of the closing of the 2004 Acquisition, the Company established the 2004 Cooper-Standard Holdings Inc. Stock Incentive Plan, which permits the granting of non-qualified and incentive stock options and other stock-based awards to employees and directors. As of December 31, 2008, the Company had 423,615 shares of common stock reserved for issuance under the plan, including outstanding options granted to certain executives to purchase 190,615 shares of common stock at a price of $100 per share from the date of the 2004 Acquisition through 2007 and additional outstanding options granted to certain

executives to purchase 22,000 shares of common stock at a price of $120 per share in 2008 (“2008 Options”). In each case, the exercise price was determined by the Company to be fair market value on the date of grant. Options are exercisable for ten years, subject to earlier expiration for reasons such as termination of employment. Shares of Company common stock acquired upon exercise of options under the plan are subject to restrictions on transfer.

Most of the option grants to executives were made upon the closing of the 2004 Acquisition or in the first year thereafter. One-half of the options granted to executives in this initial period vest on a time basis at a rate of 20% per year over five years; the remaining one-half vest over five years on a performance basis at a rate of between 0% and 20% per year, depending on the extent to which established performance targets are reached, with 85% attainment of performance targets being the threshold for any vesting. Performance-based options granted during this period are subject to certain acceleration provisions and, regardless of the achievement of performance targets in any year, may vest in full in the event of a transaction in which the Company’s Sponsors realize an internal rate of return of at least 20% on their investment in the Company, or may vest in full 8 years following the date of grant if the Compensation Committee determines that certain accounting treatment would be required in the absence of such vesting. The same principles apply in the case of options granted after this initial period but before 2008, except that only the last three years of the five-year period are taken into account, and vesting occurs in increments of 33% rather than 20%. With respect to the 2008 Options, two-thirds of the options vest on a time basis at a rate of 50% per year over two years and the remainder vest based on the performance of the Company in 2008. All of the performance-based options vest based on the achievement by the Company of annual Adjusted EBITDA targets. The 2006 annual Adjusted EBITDA target was $257,200,000, the 2007 annual Adjusted EBITDA target was $307,000,000 and the 2008 annual Adjusted EBITDA target was $323,000,000. The Company did not achieve 85% of the 2008 target and therefore no portion of the 2008 tranche of performance-based options vested as of March 31, 2009.

Although the Committee or the Board is authorized to grant options at any time, the Committee or the Board have not granted options on an annual or other regular or prescribed basis. The Committee considers Stock Incentive Plan options to be a key element of executive compensation that directly aligns the interests of the executive leadership team with those of stockholders and emphasizes sustained growth of enterprise value as a performance objective.

Management Stock Purchase Plan

The Company maintains a nonqualified Deferred Compensation Plan which allows eligible executives and directors to defer base pay, bonus payments and long-term incentive pay and have it allocated on a pre-tax basis to various investment alternatives and ultimately distributed to the executive at a designated time in the future. In December 2006, a new plan feature referred to as the “Management Stock Purchase Plan” was established which provides participants the opportunity to “purchase” Company stock units with income deferred under the deferred compensation plan at a price based on the fair value of Company common stock determined on a semi-annual basis by the Committee. Purchased stock units are matched by the Company at year-end on a one-for-one basis, subject to an annual aggregate cap for all executives of $1,500,000 worth of matching units or 15,000 matching units, whichever is less. The Committee can increase the cap in any year. If the matching units are over-subscribed in a given year, participants receive a pro rata number of matching units based on the amount of stock units the participant purchased that year through deferrals. Matching units vest ratably over a three-year period, and may vest earlier upon a participant’s death, disability, retirement or termination by the company without cause or by the participant for good reason. Matching units also become 100% vested upon the occurrence of a change in control of the Company for participants who are employed with the Company immediately prior to such change in control. Stock units are distributed to participants in the form of actual shares of the Company’s common stock, subject to restrictions on transfer, at a time in the future designated by the participant (though at its sole discretion, the Company may pay purchased units out in cash). A variety of other deemed fixed income and equity investment options are also available under the plan (which mirror the investment options available under the Company’s qualified 401(k) plans), though deferrals allocated to such options are not matched.

The timing and form of future payments are specified in the elections submitted by participants with respect to deferrals made for any plan year. Executives may elect to receive payment beginning either at separation from service or at an otherwise specified date (generally at least three years after the year in which the deferrals are made). The form of payment for a given year’s deferral account can be any of the following: (i) single lump sum; (ii) annual installments for five years; (iii) annual installments for ten years; (iv) a specified percentage of the account paid as a lump sum, and the remainder paid in either five annual installments or ten annual installments. In December 2008, the Company permitted participants in the plan to elect to receive, in 2009, a full or partial distribution of 2008 plan year income they had originally elected to defer to a later date subject to the condition that any participant making such an election forfeited any right to a matching contribution by the Company with respect to the amount subject to such election.

The Committee considers the Management Stock Purchase Plan as an important component of its incentive-based compensation program which, like the Stock Incentive Plan, aligns the interests of management with those of stockholders and emphasizes the sustained growth of enterprise value. The Management Stock Purchase Plan is available to a broader group of executives than those who currently hold options under the Stock Incentive Plan.

Retirement Plan Benefits

The Named Executive Officers participate in our qualified defined benefit retirement plan, our qualified defined contribution investment savings plan and our nonqualified supplementary benefit plan. Benefits under these plans provide executives with an income source during their retirement years, and reward executives for long service to the Company. We believe that our retirement plans are generally competitive in the industries in which we compete for executives and assist the Company in attracting and retaining a high caliber executive leadership team.

This section summarizes the terms of the retirement benefits in effect as of the disclosure date, December 31, 2008. However, in response to the continued economic downturn affecting our industry, the Company decided in December 2008 to implement a number of cost-reduction measures that became effective in 2009. These measures included a freeze in future accruals under the Company’s qualified defined benefit retirement plan effective February 1, 2009 and a suspension of fixed matching contributions under the Company’s qualified defined contribution investment savings plan. The Company’s nonqualified supplementary benefit plan continues to accrue benefits but does not “make up” for benefit accruals that are lost due to the changes in the qualified plans described above. The Company intends to conduct an overall retirement program design review during the 2009 calendar year.

Defined Benefit Retirement Plans

The Cooper-Standard Automotive Inc. Salaried Retirement Plan (“CSA Retirement Plan”) is a defined benefit plan that covers all non-union employees of the Company in the United States, including the Named Executive Officers. The CSA Retirement Plan is funded by Company contributions only. There are two types of benefits under the plan, a cash balance benefit and a final average pay benefit. There are two separate “grandfathered” final average pay formulas in the plan, but only one of those formulas applies for purposes of the Named Executive Officers whose benefits are governed by final average pay provisions, so that formula is described herein. The final average pay benefit was closed effective January 1, 2002 with respect to any participant who was not at least 40 years of age and had at least 15 years of earned service as of that date.

The cash balance portion of the CSA Retirement Plan states benefits in the form of a hypothetical account established for each participant which is increased by two components, a pay credit equal to a stated percentage of his or her compensation (as defined more specifically below under “Determination of Benefits under Plans”) each year, and an earnings credit equal to the interest rate paid on 30-year Treasury bonds times the hypothetical account balance. The final average pay benefit provides benefits stated as an annuity equal to 1.5% times average compensation (the highest five of the last ten years, as further described below in “Determination of Benefits under Plans”) times years of service. This final average pay benefit is payable on an unreduced basis at age 62 or upon attainment of age 55 with 30 years of service.

The Company maintains the Cooper-Standard Automotive Inc. Nonqualified Supplementary Benefit Plan (the “Supplementary Benefit Plan”) for the benefit of certain employees (those who are members of a select group of highly-compensated executive employees, including the Named Executive Officers). The Supplementary Benefit Plan provides for an additional pension benefit that is designed to compensate for any reduced benefits under the CSA Retirement Plan due to limits imposed by the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The Supplementary Benefit Plan is also designed to provide Mr. McElya a final average pay benefit as if he were eligible for the benefits described under “Final Average Pay Design” below. For cash balance participants, the Supplementary Benefit Plan also provides for an enhanced pay credit as further described under the heading “Determination of Benefits Under Plans” below.

Defined Contribution Retirement Plans

The Cooper-Standard Automotive Inc. Investment Savings Plan (the “CSA Savings Plan”) is a tax-qualified 401(k) retirement savings plan pursuant to which all U.S. non-union employees, including the Named Executive Officers, may contribute the lesser of up to 50% of “Compensation” (which includes the same compensation as that described below under “Cash Balance Design”, except that retention bonuses are excluded) or the limit prescribed by the Internal Revenue Code (though the Company imposes lower deferral percentage limits on highly-compensated employees). The Company matches 40% of employee contributions up to 5% of Compensation, with a maximum matching contribution of 2% of Compensation. The Company may make discretionary matching contributions depending upon annual financial performance. Company matching contributions are 100% vested after the employee has 3 years of service. Employee contributions are always 100% vested.

The Supplementary Benefit Plan also provides for an additional nonqualified employer matching contribution which (1) makes up for any Company contributions to the CSA Savings Plan that were not permitted to be made due to limitations under the Internal Revenue Code and (2) provides a nonqualified employer matching contribution which, when combined with the qualified savings plan match, provides for a total employer matching contribution of 6% of Compensation (without regard to qualified plan limits prescribed by the Internal Revenue Code).

Determination of Benefits under Plans

Benefits under the CSA Retirement Plan and the nonqualified defined benefit portion of the Supplementary Benefit Plan are governed by either a cash balance design or a final average pay design.

Cash Balance Design

Annual pay credits are added to a participant’s cash balance account at the end of each year, based on the participant’s compensation for the year and the sum of the participant’s age and service as of the beginning of that year. Compensation used as the basis for pay credits (“Compensation”) includes all compensation reported as wages for federal income tax purposes excluding employer contributions to a plan of deferred compensation, income attributable to stock options (including income attributable to any disqualifying dispositions thereof), director fees, sales awards, relocation bonuses, signing bonuses, lump-sum severance payments, suggestion system awards, tuition reimbursement, payment upon the exercise of stock appreciation rights or in lieu of the exercise of stock options, imputed income (such as, but not limited to, group term life insurance that is reported as taxable income), benefits accruing or payable under nonqualified retirement plans, expatriate income, and other amounts that are either excludable or deductible from income in whole or in part for federal income tax purposes, or that represent payments pursuant to a program of benefits or deferred compensation, whether or not qualified under the Internal Revenue Code. Annual pay credits are provided as follows:

Sum of Age and Years of Service

  CSA Retirement Plan
Applicable Percentage*
  Supplementary Benefit Plan
Applicable Percentage**
 

Up to 35

  3.0% 6.0%

36 – 50

  4.0% 8.0%

51 – 65

  5.5% 11.0%

Sum of Age and Years of Service

  CSA Retirement Plan
Applicable Percentage*
  Supplementary Benefit Plan
Applicable Percentage**
 

66 – 80

  7.5% 15.0%

over 80

  10.0% 20.0%

*The CSA Retirement Plan provides a pay credit equal to the executive’s Compensation, subject to qualified plan limitations under the Internal Revenue Code, times the percentage listed under the “CSA Retirement Plan Applicable Percentage” heading above.
**The Supplementary Benefit Plan provides a pay credit equal to the difference between (1) the executive’s Compensation, without regard to qualified plan limitations, times the percentage listed under the “Supplementary Benefit Plan Applicable Percentage” heading above, and (2) the pay credit provided under the CSA Retirement Plan.

Annual interest credits are also added to a participant’s cash balance account each year. This credit is calculated by multiplying the cash balance account as of the end of the prior year by an interest rate that is equal to the annual yield statistic for 30-year U.S. Treasury securities for the month of October of the prior year.

Benefits fully vest upon 3 years of service, with no benefits vested for less than 3 years of service. Service is measured based on an elapsed time basis from date of hire.

Normal retirement age is age 65 with 5 years of service. The normal retirement benefit is defined as a monthly life annuity amount that is actuarially equivalent to the cash balance account projected to normal retirement age with interest credits. For participants whose prior final average pay accrued benefits were frozen and converted to an opening account balance at January 1, 2002 when the cash balance design was implemented, an additional amount is added to the normal retirement benefit based on the difference between (i) the frozen age 65 accrued benefit at January 1, 2002 and (ii) a hypothetical age 65 life annuity amount that is actuarially equivalent to the January 1, 2002 opening cash balance account projected to normal retirement age with interest credits only.

Benefits are payable at termination either in the form of a lump sum or an annuity (the default form and time under the nonqualified plan is a lump sum at separation from service). The lump sum is equal to the cash balance account value at the time of distribution (plus an additional amount, if applicable, associated with the procedure described above for those who had an opening account balance established as of January 1, 2002). The immediate annuity payable is the actuarial equivalent of the normal retirement annuity benefit as described above, except in the event of early retirement, as described below.

Eligibility for early retirement is satisfied with attainment of either (i) age 62 with 10 years of service, or (ii) age 55 with 15 years of service. To the extent these age and service conditions are satisfied, the annuity form of benefit available is based on reducing the normal retirement benefit by 0.6% per month up to 36 months, and 0.4% for each additional month up to 84 months, by which age at retirement precedes age 65.

The normal form of annuity is a single life annuity for non-married participants and a reduced joint life annuity with a 50% survivor benefit for married participants. Other optional forms are available on a reduced basis as well.

Final Average Pay Design

The following highlights the basic operation of the final average pay design features of the CSA Retirement Plan and the Supplementary Benefit Plan.

The annual retirement benefit, payable as a life annuity at age 65, is equal to 1.5% multiplied by final average pay multiplied by years of service, where final average pay is determined by taking the average of the highest five calendar years of compensation within the last ten calendar years, excluding the year in which termination occurs. Compensation is determined on the same basis as that applicable to the Cash

Balance Design, except lump sum severance and signing bonuses are not excluded. Benefits associated with pay in excess of qualified plan limitations are provided by the Supplementary Benefit Plan, and benefits associated with pay up to qualified plan limits are provided by the CSA Retirement Plan.

Benefits fully vest upon 3 years of service, with no benefits vested for less than 3 years of service. Service is measured based on an elapsed time basis from date of hire.

Benefits are payable as an annuity at retirement. The normal form of annuity is a single life annuity for non-married participants or a reduced joint life annuity with a 50% survivor benefit for married participants. Other optional forms are available on a reduced basis as well.

Eligibility for early retirement is satisfied with attainment of either (i) age 62 with 10 years of service, or (ii) age 55 with 15 years of service. The annuity form of benefit available is based on reducing the normal retirement benefit by 0.4% per month by which age at retirement precedes age 62. In addition, there is no reduction in any event if a participant has attained age 55 with 30 years of service.

Termination and Change in Control Benefits

Our Named Executive Officers receive certain benefits under their employment agreements with the Company upon certain termination of employment events, including following a change in control of the Company. These benefits, described in detail under “Terms Applicable to Payments Upon Termination of Employment” below, are intended to ensure that the executive leadership team is able to objectively evaluate potential change in control transactions by addressing the potential personal impact of such transactions on our executives.

Health Benefits

The Company provides its executives with health and welfare benefits under its Health & Well-Being Benefit Plan that is made available generally to its salaried employees. The Health & Well-Being Benefit Plan is a flexible plan which permits participants to choose among various co-pay options and available benefits, including medical, prescription drug, dental, long-term disability and life insurance and other benefits, depending on the needs of the participant and his or her dependents. These benefits help the Company remain competitive in attracting and retaining a high caliber management team.

Perquisites

The Company provides each of its senior executives with a vehicle for business and personal use through the Company’s vehicle lease program or through a vehicle allowance. The Company also reimburses senior executives the cost of tax preparation and financial planning services up to a maximum of $3,000 per year. The Committee regards the level of such perquisites to be modest and of benefit to the Company in attracting and retaining a high caliber management team.

Effect of Accounting and Tax Treatment on Compensation Decisions

In the review and establishment of the Company’s compensation programs, we consider the anticipated accounting and tax implications to itself and its executives. Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to executives in excess of $1,000,000 in a year, other than performance-based compensation meeting certain requirements. The Compensation Committee considers the anticipated tax treatment to the Company of compensation paid to executives; however, there may be instances where the Committee may conclude that it is appropriate to exceed the limitation on deductibility under Section 162(m) to ensure that executive officers are compensated in a manner that is consistent with the Company’s overall compensation philosophy and objectives and which the Committee believes to be in the best interests of the Company.

EXECUTIVE COMPENSATION

Set forth below is information regarding compensation for services to the Company in all capacities of the following executive officers of the Company (the “Named Executive Officers”) during the year ended December 31, 2008: (i) our Chief Executive Officer; (ii) our Chief Financial Officer; and (iii) the three most highly compensated executive officers other than the Chief Executive Officer and Chief Financial Officer who were serving as executive officers at December 31, 2008.

SUMMARY COMPENSATION TABLE

Name and Principal Position

(a)

 Year Salary  Bonus (4) Stock
Awards (5)
 Option
Awards (6)
 Non-Equity
Incentive Plan
Compensation
(7)
 Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings (8)
 All Other
Compensation
  Total 
 (b) (c)  (d) (e) (f) (g) (h) (i)  (j) 

James S. McElya,
Chairman and Chief Executive Officer

 2008 $950,000(1) $0 $0 $0 $534,098 $586,959 $183,673(9) $2,254,730(22)
 2007 $850,000  $37,500 $284,093 $0 $1,456,393 $588,022 $127,282(10) $3,343,290(23)
 2006 $800,000  $50,000 $0 $0 $867,630 $461,321 $103,674(11) $2,282,625(24)

Edward Hasler,
Vice Chairman and President, North America

 2008 $660,578(2),(3) $0 $0 $0 $504,788 $466,978 $95,216(12) $1,727,560(22)
 2007 $500,000  $37,500 $416,274 $243,146 $837,652 $240,575 $63,944(13) $2,339,091(23)
 2006 $412,404  $50,000 $0 $0 $474,594 $258,420 $40,567(14) $1,235,985(24)

Allen J. Campbell,
Vice President and Chief Financial Officer

 2008 $440,000  $0 $0 $0 $309,386 $66,629 $71,176(15) $887,191(22)
 2007 $400,000  $37,500 $224,267 $100,578 $561,597 $72,013 $68,825(16) $1,464,780(23)
 2006 $347,000  $50,000 $0 $0 $282,735 $57,019 $49,588(17) $786,342(24)

Larry J. Beard(25),
Vice President Strategic Planning and Business Development

 2008 $370,443(3) $0 $0 $0 $309,386 $122,610 $73,428(18) $875,867(22)
 2007 $365,000  $37,500 $210,293 $0 $533,433 $125,665 $51,185(19) $1,323,076(23)
 2006 $350,000  $50,000 $0 $0 $257,251 $54,834 $36,096(20) $748,181(24)

Keith D. Stephenson
President, International

 2008 $385,000  $0 $0 $529,562 $0 $35,392 $37,663(21) $987,617(22)

(1)Mr. McElya served as Chief Executive Officer and Chairman of the Board until June 30, 2008 and continued to serve as Chairman of the Board after that date.

(2)Mr. Hasler served as President and Chief Operating Officer until June 1, 2008 at an annualized salary of $600,000; he was promoted to President and Chief Executive Officer as of July 1, 2008 at which time his annualized salary was increased to $750,000. On March 26, 2009, he was named Vice Chairman and President, North America.
(3)During portions of November and December of 2008, the Company implemented temporary work-time/vacation programs as a cost-savings measure. The impact of programs is reflected in the base salary figures shown in column (c).
(4)The amount shown in column (d) represents for each Named Executive Officer a special, discretionary bonus awarded by the Board of Directors of the Company in the years indicated. Incentive cash compensation earned during the fiscal year based on pre-established criteria approved by the Compensation Committee under the Company’s annual incentive bonus program and Long Term Incentive Plan is reported in column (g).
(5)The amount shown in column (e) represents the compensation cost associated with Company matching units under the Management Stock Purchase Plan as determined in accordance with FAS 123(R). See Note 17 of the Company’s financial statements for 2008 for the assumptions made in determining FAS 123(R) values. There can be no assurance that the FAS 123(R) value will ever be realized. Description of the Management Stock Purchase Plan is found under Executive Compensation Components.
(6)The amount shown in column (f) represents the compensation costs of stock option awards granted in 2008 for financial reporting purposes under FAS 123(R). See Note 17 of the Company’s financial statements for 2008 for the assumptions made in determining FAS 123(R) values. There can be no assurance that the FAS123(R) value will ever be realized.
(7)The amount shown in column (g) represents: for 2008, the sum of: (i) zero bonus payments for 2008 under the Company’s annual incentive bonus program for all Named Executive Officers, and (ii) payments under the Company’s Long Term Incentive Plan for the 3-year performance period ending December 31, 2008 of, for Mr. McElya, $534,098; for Mr. Hasler, $504,788; for Mr. Campbell, $309,386; and for Mr. Beard, $309,386; and for 2007, the sum of: (i) bonus payments for 2007 under the Company’s annual incentive bonus program of, for Mr. McElya, $1,052,300; for Mr. Hasler, $495,200; for Mr. Campbell, $321,880; and for Mr. Beard, $293,716; and (ii) payments under the Company’s Long Term Incentive Plan for the 3-year performance period ending December 31, 2007 of, for Mr. McElya, $404,093; for Mr. Hasler, $342,452; for Mr. Campbell, $239,717; and for Mr. Beard, $239,717; and for 2006, the sum of: (i) bonus payments for 2006 under the Company’s annual incentive bonus program of, for Mr. McElya, $756,522; for Mr. Hasler, $405,151; for Mr. Campbell, $213,292; and for Mr. Beard, $187,808; and (ii) payments under the Company’s Long Term Incentive Plan for the 2-year performance period ending December 31, 2006 of, for Mr. McElya, $111,108; for Mr. Hasler, $69,443; for Mr. Campbell, $69,443; and for Mr. Beard, $69,443.
(8)The amount shown in column (h) represents for each Named Executive Officer the sum of the aggregate annualized change in the actuarial present value of accumulated benefits under all defined benefit and actuarial pension plans (qualified and non-qualified, including supplemental plans) from the plan measurement date used for financial statement reporting purposes with respect to the prior completed fiscal year to the plan measurement date used for financial statement reporting purposes with respect to the covered fiscal year.
(9)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $144,245); the cost of Company-paid personal travel; the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(10)

The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the

Supplementary Benefit Plan (totaling $105,250); the cost of Company-paid personal travel; the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.

(11)The amount shown in column (i) represents matching company contributions under the qualified 401(k) CSA Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $79,171); the cost of a Company-provided apartment; the cost of Company-paid personal travel; the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(12)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $89,584); the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(13)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $60,726); and life insurance premiums paid by the Company.
(14)The amount shown in column (i) represents matching company contributions under the qualified 401(k) CSA Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $37,821); and life insurance premiums paid by the Company.
(15)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $60,040); the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(16)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $43,153); the cost of a Company-provided apartment; the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(17)The amount shown in column (i) represents matching company contributions under the qualified 401(k) CSA Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $32,419); the cost of a Company-provided apartment; the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(18)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $54,233); a special one-time Company contribution under the Executive Deferred Compensation Plan; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(19)The amount shown in column (i) represents matching Company contributions under the qualified 401(k) CSA Investment Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $39,568); the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(20)The amount shown in column (i) represents matching company contributions under the qualified 401(k) CSA Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $30,111); the cost of Company-paid tax preparation and financial planning services; the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.

(21)The amount shown in column (i) represents matching company contributions under the qualified 401(k) CSA Savings Plan and nonqualified defined contribution portion of the Supplementary Benefit Plan (totaling $33,608); the cost of a Company-provided vehicle; and life insurance premiums paid by the Company.
(22)The percentages of total compensation in 2008 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: Mr. McElya, base salary 42.1%, bonus 23.7%; for Mr. Hasler, base salary 38.2%, bonus 29.2%; for Mr. Campbell, base salary 49.6%, bonus 34.9%; for Mr. Beard, base salary 42.3%, bonus 35.3%; for Mr. Stephenson, base salary 39.0%, bonus 0.0%.
(23)The percentages of total compensation in 2007 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: Mr. McElya, base salary 25.4%, bonus 44.7%; for Mr. Hasler, base salary 21.4%, bonus 37.4%; for Mr. Campbell, base salary 27.3%, bonus 40.9%; for Mr. Beard, base salary 27.6%, bonus 43.2%.
(24)The percentages of total compensation in 2006 that were attributable to base salary and total bonus (the amounts identified in columns (d) and (g)) were as follows: Mr. McElya, base salary 35.0%, bonus 40.2%; for Mr. Hasler, base salary 33.4%, bonus 42.4%; for Mr. Campbell, base salary 44.1%, bonus 42.3%; for Mr. Beard, base salary 46.8%, bonus 41.1%.
(25)Mr. Beard retired effective March 31, 2009.

Non-Equity Incentive Plan Compensation – Annual Incentive Bonus

For 2008, the Committee established an annual incentive bonus target amount for each member of the executive leadership team based on a percentage of base salary. With respect to the Named Executive Officers, the percentage was 100% for Mr. McElya, 80% for the period from January 1, 2008 through June 30, 2008 and 100% for the period from July 1, 2008 through December 31, 2008 for Mr. Hasler, and 65% for Messrs. Campbell, Beard, and Stephenson. The annual incentive bonus target amounts are based on the levels of responsibility of the executives and other performance-based factors. Incentive bonus amounts actually paid for 2008 performance are set forth in footnote (7) under column (g) of the above Summary Compensation Table.

2008 GRANTS OF PLAN-BASED AWARDS

The following table sets forth information regarding plan-based awards made to the Named Executive Officers during 2008 that provide for possible future payouts.

      Estimated Future Payouts Under Non-Equity
Incentive Plan Awards (1)
  

All Other Stock
Awards:
Number of
Shares of Stock
or Units (#) (3)

(i)

  

All Other
Option Awards;
Number of
Securities
Underlying
Options(4)

(j)

  

Exercise or Base
Price of Option
Awards ($/sh)

(k)

  

Grant Date
Fair value of
Stock and
Option
Awards

($/sh)(5)

(l)

Name

(a)

  Grant Date
(b)
  Threshold
(c)
  Target
(d)
  Maximum (2)
(e)
        

James S. McElya

  1/1/2008  $175,000  $350,000  Not applicable  —    —     —     —  

Edward A. Hasler

  1/1/2008  $175,000  $350,000  Not applicable  —    —     —     —  

Allen J. Campbell

  1/1/2008  $100,000  $200,000  Not applicable  —    —     —     —  

Larry J. Beard

  1/1/2008  $100,000  $200,000  Not applicable  —    —     —     —  

Keith D. Stephenson

  1/1/2008  $100,000  $200,000  Not applicable  —    —     —     —  
  3/20/2008        —    12,500  $120  $529,562

(1)The non-equity incentive plan awards represent 2008 awards granted by the Compensation Committee to the Named Executive Officers under the Company’s Long Term Incentive Plan based on the achievement of operating cash flow objectives in the performance period beginning January 1, 2008 and ending December 31, 2010 (“2008 LTIP Awards”). 2008 LTIP Awards are payable in the first quarter of 2011, depending on the level of achievement of established targets and the approval of the Compensation Committee. The determination of award amounts under the Long Term Incentive Plan is described under “Long-Term Incentive Compensation” under the Executive Compensation Components section. The amounts set forth in footnote (7) under column (g) of the Summary Compensation Table do not pertain to the 2008 LTIP Awards; they reflect payments under a 2006 LTIP award granted by the Compensation Committee under the Long Term Incentive Plan based on the performance period beginning January 1, 2006 and ending December 31, 2008.
(2)The 2008 LTIP does not provide for a maximum payout; the amount of the payout increases by 10% for each 1% increase in the actual level of achievement above the target level.
(3)Represents matching stock units awarded under the Management Stock Purchase Plan on December 31, 2008. See Management Stock Purchase Plan under the Executive Compensation Components section for more information about the determination of awards under this plan. None of the NEOs received matching stock units in 2008.
(4)The amounts shown in column (j) represent stock option awards granted March 20, 2008 under the 2004 Cooper-Standard Holdings Inc. Stock Incentive Plan.
(5)See Note 17 of the Company’s financial statements for 2008 for the assumptions made in determining FAS 123(R) values.

OUTSTANDING EQUITY AWARDS AT 2008 FISCAL YEAR-END

The following table sets forth information concerning outstanding stock option awards and stock units under the Management Stock Purchase Plan held by the Named Executive Officers at December 31, 2008, including the number of shares underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option.

   Option Awards(1)  Stock Awards

Name (a)

  Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable (2)

(b)
  Equity Incentive Plan
Awards Number of
Securities Underlying
Unexercised Unearned
Options (#)(3)

(d)
  Option
Exercise
Price

(e)
  Option
Expiration
Date(4)

(f)
  Number of Shares
or Units of Stock
that have not
vested (#)

(g)
  Market Value of
Shares or Units of
Stock that have
not vested(10)

(h)

James S. McElya

  29,956  14,767  $100  12/23/2014  1,578(5) $78,900

Edward A. Hasler

  16,476  8,125  $100  12/23/2014  2,313(6) $115,650
  2,906  2,493  $100  3/15/2017   

Allen J. Campbell

  14,979  7,383  $100  12/23/2014  1,246(7) $62,300
  1,203  1,033  $100  3/15/2017   

Larry J. Beard

  16,477  8,121  $100  12/23/2014  1,168(8) $58,400

Keith D. Stephenson

  4,167  8,333  $120  3/20/2018  943(9) $47,150

(1)All of the amounts presented in this portion of the table relate to options to purchase shares of the Company’s Common Stock granted to the Named Executive Officers under the Company’s Stock Incentive Plan. Options listed above with an Option Expiration Date of December 23, 2014 were granted on December 23, 2004, those with an Option Expiration Date of March 15, 2017 were granted on March 15, 2007, and those with an Option Expiration Date of March 20, 2018 were granted on March 20, 2008.
(2)Represents time-based options and performance-based options which have vested and were exercisable as of December 31, 2008 with respect to the following number of shares of the Company’s common stock: for Mr. McElya, 17,890 shares time-based and 12,066 shares performance-based; for Mr. Hasler, 11,640 shares time-based and 7,743 shares performance-based; for Mr. Campbell, 9,690 shares time-based and 6,492 shares performance-based; for Mr. Beard, 9,840 shares time-based and 6,637 shares performance-based; for Mr. Stephenson, 4,167 shares time-based and 0 shares performance-based.
(3)Represents outstanding time-based options and performance-based options which have not been earned or vested and were unexercisable as of December 31, 2008 with respect to the following number of shares of the Company’s common stock: for Mr. McElya, 4,472 shares time-based and 10,295 shares performance-based; for Mr. Hasler, 3,360 shares time-based and 7,257 shares performance-based; for Mr. Campbell, 2,609 shares time-based and 5,807 shares performance-based; for Mr. Beard, 2,459 shares time-based and 5,662 shares performance-based; for Mr. Stephenson, 4,166 shares time-based and 4,167 shares performance-based.

(4)Options expire on the earliest to occur of: (i) the tenth anniversary of the date of grant; (ii) the first anniversary of the date of the optionee’s termination of employment due to death, disability, retirement at normal retirement age or the sale by the Company (not constituting a change of control) of the business in which the optionee was employed; (iii) 90 days following the date of the optionee’s termination of employment without cause (or for reasons other than those described in (ii)); or (iv) on the date of the optionee’s termination of Employment for cause.
(5)Represents 1,578 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that had not yet become vested as of December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(6)Represents 2,313 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that had not yet become vested as of December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(7)Represents 1,246 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that had not yet become vested as of December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(8)Represents 1,168 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that had not yet become vested as of December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(9)Represents 943 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that had not yet become vested as of December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(10)The values in column (h) equal the total number of matching stock units listed in column (g) for each Named Executive Officer multiplied by the value of Company common stock as of December 31, 2008, which was $50.

2008 OPTION EXERCISES AND STOCK VESTED

The following table sets forth certain information regarding stock-based awards that vested during 2008 for our Named Executive Officers. No stock options were exercised by our Named Executive Officers in 2008.

   Option Awards  Stock Awards

Name (a)

  Number of
Shares
Acquired on
Exercise (#)

(b)
  Value
Realized on
Exercise ($)

(c)
  Number of Shares
Acquired on
Vesting (#)

(d)
  Value Realized on
Vesting ($)(6)

(e)

James S. McElya

  —    —    789(1) $39,450

Edward A. Hasler

  —    —    1,156(2) $57,800

Allen J. Campbell

  —    —    623(3) $31,150

Larry J. Beard

  —    —    584(4) $29,200

Keith D. Stephenson

  —    —    471(5) $23,550

(1)Represents 789 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that became vested on December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(2)Represents 1,156 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that became vested on December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(3)Represents 623 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that became vested on December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(4)Represents 584 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that became vested on December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(5)Represents 471 stock units which is the portion of the units granted on December 31, 2007 through the Company match under the Management Stock Purchase Plan that became vested on December 31, 2008. These matching units vest ratably over a three year period. Description of Management Stock Purchase Plan is found in Executive Compensation Components.
(6)The values in column (e) equal the total number of matching stock units listed in column (d) for each Named Executive Officer multiplied by the value of Company common stock as of December 31, 2008, which was $50.

2008 PENSION BENEFITS

The following table sets forth the actuarial present value of each Named Executive Officer’s accumulated benefit under the CSA Retirement Plan and the non-qualified defined benefit portion of the Supplementary Benefit Plan as described in “Retirement Plan Benefits” under the Executive Compensation Components section, assuming benefits are paid at normal retirement age or the earliest retirement age at which participants receive unreduced benefits, based on current levels of compensation. The table also shows the number of years of credited service under each plan, computed as of the same pension plan measurement date used in the Company’s audited financial statements for the year ended December 31, 2008.

Name

(a)

Plan Name

(b)

Number of Years
Credited Service (#)

(c)
Present Value
of Accumulated
Benefit(1) ($)
(d)
Payments
During Last
Fiscal Year ($)
(e)

James S. McElya

CSA Retirement Plan(2) Supplementary Benefit Plan(3)8.92
12.92

(4)
$
$
102,910
2,414,503
$
$
0
0

Edward A. Hasler

CSA Retirement Plan(5) Supplementary Benefit Plan(5)22.00
22.00

$
$
626,769
1,141,169
$
$
0
0

Allen J. Campbell

CSA Retirement Plan(2) Supplementary Benefit Plan(6)10.25
10.25

$
$
112,871
238,296
$
$
0
0

Larry J. Beard

CSA Retirement Plan(2) Supplementary Benefit Plan(6)8.92
8.92

$
$
99,281
307,891
$
$
0
0

Keith D. Stephenson

CSA Retirement Plan(2)(7)Supplementary Benefit Plan(6)(7)1.50
1.50

$
$
14,065
28,818
$
$
0
0

(1)Present values determined using a December 31, 2008 measurement date and reflect benefits accrued based on service and pay earned through such date. Figures are determined based on post-commencement valuation mortality (UP 1994 table) and commencement of benefits at age 65, except for Mr. McElya and Mr. Hasler, who were assumed to retire at age 62 because they are eligible for unreduced benefits at that age as discussed in footnotes (3) and (5) below. The assumed discount rate as of the measurement date is 6.35%.
(2)Messrs. McElya, Campbell, Beard, and Stephenson are covered under the cash balance design for purposes of the qualified CSA Retirement Plan.
(3)Mr. McElya receives two types of defined benefits under the Supplementary Benefit Plan. He receives a non-qualified cash balance benefit determined under usual terms. In addition, he receives a benefit determined under the final average pay design, offset by the annuity-equivalent of his qualified and nonqualified cash balance benefits. Because the final average pay design includes an unreduced feature upon attainment of age 62 and 10 years of service, which the executive would be eligible for, he was assumed to retire at age 62.
(4)Mr. McElya is granted four years of additional service in the Supplementary Benefit Plan to compensate for lost (non-vested) benefits accrued with his previous employer prior to joining the Company in January 2000.

(5)Mr. Hasler is covered under the final average pay design for both the qualified CSA Retirement Plan and the non-qualified Supplementary Benefit Plan. Because the final average pay design includes an unreduced feature upon attainment of age 62 and 10 years of service, which the executive would be eligible for, he was assumed to retire at age 62.
(6)Messrs. Campbell, Beard, and Stephenson are covered under the cash balance design for purposes of the non-qualified Supplementary Benefit Plan.
(7)Mr. Stephenson has not met the 3-year vesting requirement.

2008 NONQUALIFIED DEFERRED COMPENSATION

The following table sets forth annual executive and company contributions under non-qualified deferred compensation provisions of the Executive Deferred Compensation Plan and the non-qualified defined contribution portion of the Supplementary Benefit Plan, as well each Named Executive Officer’s withdrawals, earnings and fiscal-year end balances in those plans.

Name (a)

  Executive
Contribution in

Last FY(1)
(b)
  Registrant
Contributions in
Last FY(2)

(c)
  Aggregate
Earnings in
Last FY

(d)
  Aggregate
Withdrawals/
Distributions
(e)
  Aggregate
Balance at

Last FYI
(f)

James S. McElya

  $0  $139,645  $(946,084) $0  $1,825,603

Edward A. Hasler

  $0  $85,294  $(479,688) $0  $571,475

Allen J. Campbell

  $0  $55,440  $(298,255) $0  $321,998

Larry J. Beard

  $92,611  $57,587  $(360,495) $0  $692,596

Keith D. Stephenson

  $0  $29,008  $(197,334) $0  $170,970

(1)Amounts represent deferrals under the Executive Deferred Compensation Plan related to base salary for 2008 for Mr. Beard.
(2)Amounts are included in column (i) of the Summary Compensation Table and represent nonqualified Company matching contributions under the Supplementary Benefit Plan as well as a special one-time employer cash contribution under the Executive Deferred Compensation Plan for Mr. Beard of $7,955. The Company match under the Executive Deferred Compensation Plan is made in stock units under the Management Stock Purchase Plan feature, which is more fully described in the Executive Compensation Components section.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The Named Executive Officers have entered into employment agreements with the Company which provide for certain benefits upon termination of employment, including termination following a change in control as defined in the Cooper-Standard Automotive Inc. Change of Control Severance Pay Plan (the “Change in Control Plan”). The table below shows estimates of the value of compensation that would be payable to each Named Executive Officer upon termination of employment with the Company under certain circumstances. As indicated in the table, compensation upon termination of employment varies depending on the circumstances of the termination and whether or not it occurred following a change in control. Amounts presented in the table are calculated as if the employment of the executive terminated effective December 31, 2008. Payments due to any one of the Named Executive Officers upon actual termination of employment can only be determined at the time of termination. There can be no assurance that an actual termination or change in control would produce the same or similar results as those described below if it were to occur on any other date and if the actual circumstances at the time of termination.

Amounts accrued under the normal terms of our pension and deferred compensation plans are not included in this table. Information concerning pension benefits and deferred compensation disclosures is presented under “Pension Benefits”, beginning on page 125, and “Nonqualified Deferred Compensation”, beginning on page 126, respectively. Similarly, information concerning vested equity awards is not included in the table, and is presented under “Outstanding Equity Awards at Fiscal Year End”, beginning on page 122.

Name

  Severance
Payment(1)
  Pension
Enhancement (2)
  Health/Life (3)  Outplacement
Services(4)
  Accelerated
Vesting of
Equity Awards (5)
  Gross Up(6)  

Totals

James S. McElya

              

•   

 Termination Without Cause or Resignation for Good Reason, After Change in Control  $7,003,256  $2,038,314  $290,000  $50,000  —    $3,421,227  $12,802,797

•   

 Termination Without Cause or Resignation for Good Reason, with no Change in Control  $6,053,256  $2,081,252  $290,000  $50,000  —     N/A  $8,474,508

•   

 Termination for Cause or Resignation Without Good Reason   —     —     —     —    —     N/A  —  

•   

 Termination due to Death  $7,350,107  $2,491,909  $153,269   —    —     N/A  $9,995,285

•   

 Termination due to Disability  $7,350,107  $2,491,909  $290,000   —    —     N/A  $10,132,016

Edward A. Hasler

              

•   

 Termination Without Cause or Resignation for Good Reason,  $3,703,256  $1,476,092  $491,748  $50,000  —    $2,413,181  $8,134,277

•   

 Termination Without Cause or Resignation for Good Reason, with no Change in Control  $2,300,000  $1,476,092  $41,686   —    —     N/A  $3,817,778

•   

 Termination for Cause or Resignation Without Good Reason   —     —     —     —    —     N/A  —  

•   

 Termination due to Death  $653,256   —     —     —    —     N/A  $653,256

•   

 Termination due to Disability  $653,256   —     —     —    —     N/A  $653,256

Allen J. Campbell

              

•   

 Termination Without Cause or Resignation for Good Reason, After Change in Control  $2,213,289  $104,966  $447,420  $50,000  —    $1,064,187  $3,879,862

•   

 Termination Without Cause or Resignation for Good Reason, with no Change in Control  $1,400,000  $104,966  $30,135   —    —     N/A  $1,535,101

•   

 Termination for Cause or Resignation Without Good Reason   —     —     —     —    —     N/A  —  

•   

 Termination due to Death  $373,289   —     —     —    —     N/A  $373,289

•   

 Termination due to Disability  $373,289   —     —     —    —     N/A  $373,289

Larry J. Beard

              

•   

 Termination Without Cause or Resignation for Good Reason, After Change in Control  $1,972,789  $147,359  $295,967  $50,000  —    $857,059  $3,323,174

•   

 Termination Without Cause or Resignation for Good Reason, with no Change in Control  $1,224,500  $147,359  $34,278   —    —     N/A  $1,406,137

•   

 Termination for Cause or Resignation Without Good Reason   —     —     —     —    —     N/A  —  

•   

 Termination due to Death  $373,289   —     —     —    —     N/A  $373,289

•   

 Termination due to Disability  $373,289   —     —     —    —     N/A  $373,289

Keith D. Stephenson

              

•   

 Termination Without Cause or Resignation for Good Reason, After Change in Control  $1,494,248  $14,399  $429,561  $50,000  —    $800,674  $2,788,882

•   

 Termination Without Cause or Resignation for Good Reason, with no Change in Control  $1,031,781  $14,399  $19,880   —    —     N/A  $1,066,060

•   

 Termination for Cause or Resignation Without Good Reason   —     —     —     —    —     N/A  —  

•   

 Termination due to Death  $77,467   —     —     —    —     N/A  $77,467

•   

 Termination due to Disability  $77,467   —     —     —    —     N/A  $77,467

(1)Cash severance is generally paid in a lump sum at termination. Cash severance amounts estimated above are based on providing executives with prorated outstanding incentive awards and a multiple of the sum of (i) their annual base rate of salary at date of termination plus (ii) their target annual bonus for the year prior to termination, with such multiple equal to three (3) for Mr. McElya and two (2) for Messrs. Hasler, Campbell, Beard, and Stephenson. If the termination occurs following a change of control, each Named Executive officer’s cash severance is increased by one additional year’s base salary. Further description of the terms applicable to cash severance payments is included under “Terms Applicable to Payments Upon Termination of Employment” beginning on page 130.
(2)The pension enhancement provides for payment of the present value of the additional accrued benefit that would otherwise be due from the Company’s qualified and non-qualified pension plans had the executive continued in active service for a specified number of years beyond termination, with such number of years equal to three (3) for Mr. McElya and two (2) for Messrs. Hasler, Campbell, Beard, and Stephenson. Pension-eligible earnings to be used for these calculations depend on the circumstances of the termination, described under “Terms Applicable to Payments Upon Termination of Employment” beginning on page 130.
(3)Health and life insurance benefits are continued for the Named Executive Officers and their covered dependents after termination of employment under certain circumstances. In such cases, the commitment is generally to provide for coverage for these benefits in a manner such that (i) benefits provided are substantially similar to those at termination and (ii) recipients of such benefits will not pay higher share of cost for such benefits than had been required prior to termination of employment based on elections in place at that time. Further description of the terms applicable to health and life insurance benefits is included under “Terms Applicable to Payments Upon Termination of Employment,” beginning on page 130.
(4)Under Mr. McElya’s employment agreement, payment of the cost of outplacement services is provided in an amount up to 15% of his annual base salary at the time of termination, and for purposes of the computations above, actual reimbursement was assumed not to exceed $50,000. In addition, outplacement services were assumed not to be utilized in the death and disability scenarios for Mr. McElya. Upon termination without cause (or resignation for good reason) after a change of control, all Named Executive officers are entitled to payment of the cost of outplacement services in an amount equal to the lesser of 15% of annual base salary at the time of termination, or $50,000.
(5)Represents effect of accelerated vesting related to time-based and performance-based stock options. In the event of a change in control, outstanding and unvested time-based stock options become fully vested and exercisable, and 20% to 100% of outstanding and unvested performance-based options for the tranche applicable to the year in which the change in control occurs (and the tranche(s) applicable to future years) shall vest to the extent that cumulative consolidated EBITDA performance from the 2004 calendar year through the most recent fiscal year-end meets or exceeds 85% of cumulative performance targets for the same period (where vesting occurs on a straight-line basis between 20% and 100% depending on achievement of the performance targets between 85% and 100%).
(6)Upon a change of control of the Company each executive may be subject to certain excise taxes pursuant to Section 280G of the Internal Revenue Code. Pursuant to the executive’s employment agreement and/or the Severance Plan, the Company has agreed to reimburse the executive for all excise taxes that are imposed on the executive pursuant to Section 280G and any income and excise taxes that are payable by the executive as a result of this reimbursement. These amounts assume that no amounts will be discounted as attributable to reasonable compensation and no value will be attributed to the non-competition covenants included in the agreement. Amounts will be discounted to the extent the Company can demonstrate by clear and convincing evidence that the non-competition covenants included in the agreement substantially constrains the executive’s ability to perform services and there is a reasonable likelihood that the non-competition covenants will be enforced against the individual.

Terms Applicable to Payments Upon Termination of Employment

The Company has in effect employment agreements with each of the Named Executive Officers which provide severance pay and benefits in the event of the executive’s termination of employment for specified reasons prior to a change of control of the Company, and a Change of Control Severance Pay Plan that provides severance pay and benefits if the executive is terminated following a change of control.

Mr. McElya’s Employment Agreement

On March 26, 2009, Mr. McElya’s existing employment agreement with the Company was amended and restated, primarily to document that Mr. McElya was again serving as the Company’s Chief Executive Officer in addition to serving as the Company’s Chairman. The material provisions of Mr. McElya’s previous employment agreement, entered into in December 2007, remained unchanged. Mr. McElya’s employment agreement provides him with special retirement termination benefits in the event that he terminates employment as Chief Executive Officer with at least 90 days prior written notice and agrees to continue providing services to the Company as non-executive Chairman of the Board for a period to be mutually agreed (a “qualified retirement”). The special retirement benefits correspond to the amounts and benefits that would otherwise be payable to Mr. McElya in connection with an involuntary termination of his employment without “cause”, or in connection with a voluntary termination of his employment for “good reason”, as such terms are defined in the employment agreement. Mr. McElya’s employment agreement also provides that, following a qualified retirement as described above, Mr. McElya’s stock options with Cooper-Standard Holdings Inc. (“Holdings”) will continue to vest as if he remained employed for so long as Mr. McElya continues to serve as non-executive Chairman, and his vested options upon termination as Chairman will remain exercisable until two years following the date of his termination as Chairman (or until the normal option term expiration date, if sooner).

In December 2007, Mr. McElya also entered into a put option agreement with Holdings and certain stockholders of Holdings related to the 20,000 shares of Holdings’ common stock that Mr. McElya purchased on December 23, 2004 (the “Purchased Shares”). Under the terms of the put option agreement, in the event of Mr. McElya’s qualified retirement as described above, or termination of employment due to death or disability, in each case, prior to the occurrence of a qualified initial public offering of Holdings’ common stock, Mr. McElya will have the right to require Holdings to purchase his Purchased Shares for fair market value. Mr. McElya’s put right under the put option agreement is generally exercisable within 180 days following the date of his termination as non-executive Chairman of the Company or termination due to death or disability.

The current term of Mr. McElya’s employment agreement ends December 31, 2009 but will be automatically extended for one year periods thereafter unless either the Company or Mr. McElya provides a notice of termination by September 30 of a given year. The agreement provides Mr. McElya with an annual base salary (currently $950,000), which is to be reviewed by the Board each year. The Board may increase, but not decrease, the base salary. The agreement also provides Mr. McElya with an annual bonus opportunity based on a percentage of his base salary (currently 100%) as well as participation in the Company’s benefit plans and long-term incentive plans and programs. Effective January 2009, Mr. McElya and the other members of the Company’s senior leadership team, consented to a 10% reduction in base salary for a six month period, subject to extension, and waived eligibility under the annual bonus plan for a bonus with respect to the first half of 2009. In addition, Mr. McElya consented to the freezing of certain retirement and savings plan benefits.

If Mr. McElya terminates employment for “Good Reason”, or the Company terminates Mr. McElya’s employment without “Cause”, as those terms are defined in the agreement and described below, and in each case prior to a change of control of the Company, then the Company will pay or provide to Mr. McElya: (i) his accrued but unpaid salary, annual and long-term incentive compensation amounts; (ii) a pro rata payment of any target annual and long-term incentive compensation amounts for which the performance periods have not ended; (iii) the greater of a lump sum payment equal to three times his current

annual base salary plus his annual target bonus amount (for the year preceding the year of his termination) or a sum equal to the biweekly payments that Mr. McElya would have received if he were paid at the rate of his average compensation for the remainder of the term; (iv) a lump sum payment equal to the value of three additional years of service credit under the Company’s qualified and non-qualified defined benefit pension plans, assuming his compensation under such plans for the three year period was the highest compensation paid to him during any of the five calendar years preceding the year in which his termination of employment occurs (not impacted by the Company’s freezing of accruals under the qualified defined benefit retirement plan); (v) three years of continued coverage under the life, accident and health plans sponsored by the Company and in which Mr. McElya was covered immediately prior to his termination; (vi) medical and life insurance coverage for Mr. McElya and his spouse for their lifetimes, and for his dependent children until they cease to qualify as dependents; and (vii) outplacement services for up to two calendar years following the year of termination, not to exceed a cost equal to 15% of his annual base pay. The lump sum amounts described in clauses (iii) and (iv) of the preceding sentence are payable six months following the date of Mr. McElya’s termination of employment. If, during the first 36 months of life, medical and accident benefit continuation, the Company is unable to provide what are otherwise intended to be non-taxable benefits to Mr. McElya and his covered family members on a tax-free basis, then the Company will make an additional payment to Mr. McElya to reimburse him for the taxes due on such benefits.

Termination for “Cause” under Mr. McElya’s employment agreement means termination for any of the following reasons: (i) any act or omission constituting a material breach by him of any of his significant obligations under the agreement or his continued failure or refusal to adequately perform the duties reasonably required of him which is materially injurious to the Company and his failure to correct such breach, failure or refusal within thirty (30) days of notice to him thereof by the Company’s board of directors; (ii) the conviction for a felony or the conviction for or finding by civil verdict of the commission by him of a dishonest act or common law fraud against the Company; or (iii) any other willful act or omission which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company and his failure to correct such act or omission after notification by the Board of any such act or omission.

Termination by Mr. McElya for “Good Reason” under his employment agreement means termination following the occurrence of any of the following, without Mr. McElya’s express, prior written consent: (i) a material breach by the Company of its obligations under the agreement relating to Mr. McElya’s duties, compensation and benefits, including but not limited to, the assignment to him of any duties materially inconsistent with his status as Chief Executive Officer of the Company, or his removal from such position, or a substantial adverse alteration in the nature of his responsibilities except, in each case, in connection with a promotion, and the failure of the Company to remedy such breach within thirty (30) days after receipt of written notice of such breach from Mr. McElya; (ii) the relocation of Mr. McElya’s work location 150 miles or more from its current location, except for relocation to the Company’s headquarters and required travel on the Company’s business to an extent reasonably required to perform his duties; (iii) except as required by law, the failure by the Company to provide Mr. McElya with benefit plans that provide health, life, disability, retirement and fringe benefits that are substantially comparable in the aggregate to the level of such benefits provided him by Cooper Tire immediately prior to the 2004 Acquisition other than in connection with a reduction in such level of benefits that applies to other senior executives of the Company; (iv) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the Company’s obligations under the employment agreement and provide Mr. McElya with the same or a comparable position, duties, benefits, and base salary and incentive compensation as provided in the employment agreement; or (v) the failure of the board of directors to elect Mr. McElya to his existing position or an equivalent position.

If Mr. McElya terminates employment as a result of death or disability, then the Company will pay or provide to Mr. McElya or Mr. McElya’s beneficiaries, estate or family, as applicable, the amounts and considerations Mr. McElya would have been entitled to as if Mr. McElya’s employment had been terminated by Mr. McElya for Good Reason or by the Company without Cause immediately prior to the expiration of the current term of employment.

If Mr. McElya is terminated by the Company for Cause, Mr. McElya will be entitled to base pay and vested benefits under any plan in accordance with that plan and a pro rata portion of any incentive compensation for the year in which the termination occurs up to the date of termination.

Had Mr. McElya voluntarily elected to retire on or before December 31, 2007, Mr. McElya would have been entitled to such amounts as if he had been terminated by the Company for Cause. If Mr. McElya voluntarily elects to retire after January 1, 2008 and agrees to act as the Company’s non-executive Chairman of the Board for a mutually agreed upon term, then Mr. McElya will be entitled to the amounts and considerations Mr. McElya would have been entitled to if Mr. McElya’s employment had been terminated by Mr. McElya for Good Reason or by the Company without Cause immediately prior to the expiration of the current term of employment.

If the Company elects not to extend Mr. McElya’s employment agreement for any year after expiration of the initial term, then Mr. McElya will be treated as if he terminated employment for good reason or the Company terminated without cause and entitled to the severance pay and other benefits described above, except that such pay and benefits will not be paid until his actual termination of employment which shall be deemed effective December 31 of the year in which the Company gave notice.

The agreement also provides that if any payment or the amount of benefits due under the agreement or otherwise would be considered an excess parachute payment that subjects Mr. McElya to excise tax under Internal Revenue Code Section 4999, then the Company will make an additional “gross-up” payment to Mr. McElya to reimburse him for such taxes (and any taxes due on the gross-up payment).

In exchange for the benefits provided under the agreement, Mr. McElya agrees not to compete with the Company for a two-year period after his termination of employment, not to solicit or interfere with any Company employee or customer, and not to disclose confidential and proprietary Company information. Mr. McElya is also required to execute a release of all claims against the Company as a condition to receiving the severance payment and benefits, if applicable.

Employment Agreements of Other Named Executive Officers

The Company has in effect employment agreements with the other Named Executive Officers, which are substantially similar to Mr. McElya’s employment agreement except as described below. Each agreement has an initial term ending December 31, 2009 and continues for one year periods thereafter, unless the Company or Named Executive Officer provides a notice of termination at least 60 days prior to the end of any term. Under the agreements, each Named Executive Officer is paid an annual base salary, currently as follows: $750,000 for Mr. Hasler; $440,000 for Mr. Campbell; and $385,000 for Mr. Stephenson. Mr. Beard’s employment with the Company terminated on March 31, 2009. The agreements provide that the Compensation Committee may increase the base salary from time to time, based upon the recommendation of the Chief Executive Officer. The agreements also provide that the Named Executive Officers are entitled to participate in such annual and long-term incentive compensation programs and benefit plans and programs as are generally provided to senior executives. In January of 2009, the Named Executive Officers consented to a 10% reduction in their base salaries for a six month period, subject to extension, and waived their eligibility under the annual bonus plan to bonuses with respect to the first half of 2009. In addition, the Named Executive Officers consented to the freezing of certain retirement and savings plan benefits.

If a Named Executive Officer terminates employment for “Good Reason” or the Company terminates the employment of the Named Executive Officer without “Cause”, as those terms are defined in the agreement and described below, and in each case prior to a change of control of the Company, then the Company will pay or provide to the Named Executive Officer: (i) his accrued but unpaid salary, annual and long-term incentive compensation amounts; (ii) a pro rata payment of any annual incentive compensation amounts for which the performance period has not ended; (iii) a lump sum payment equal to two times the executive’s current annual base salary plus his annual target bonus amount (for the year preceding the year of his termination); (iv) a lump sum payment equal to the value of two additional years of service credit under the Company’s qualified and nonqualified defined benefit pension plans, assuming the executive’s compensation under such plans for such period was the same as the compensation paid to him during the

year preceding his termination of employment (though additional years of service credit are not provided in relation to the qualified plan for this purpose beyond January 31, 2009 when the company froze the qualified plan); and (v) two years of continued coverage under the life and health plans sponsored by the Company at the same cost to the executive as is being charged to active employees.

Termination for “Cause” under the employment agreements of these executives means termination for any of the following reasons: (i) the executive’s willful failure to perform duties or directives which is not cured following written notice; (ii) the executive’s commission of a felony or crime involving moral turpitude; (iii) the executive’s willful malfeasance or misconduct which is demonstrably injurious to the Company; or (iv) material breach by the executive of the non-competition, non-solicitation or confidentiality provisions of the agreement.

Termination by any of these executives for “Good Reason” shall mean termination following any of the following: (i) a substantial diminution in the executive’s position or duties, adverse change in reporting lines, or assignment of duties materially inconsistent with the executive’s position; (ii) any reduction in the executive’s base salary or annual bonus opportunity; (iii) any reduction in the executive’s long-term cash incentive compensation opportunities, other than reductions generally affecting other senior executives participating in the applicable long-term incentive compensation programs or arrangements; (iv) the failure of the Company to pay the executive any compensation or benefits when due; (v) relocation of the executive’s principal place of work in excess of 50 miles from the executive’s current principal place of work; or (vi) any material breach by the Company of the terms of the Agreement; in each case if the Company fails to cure such event within 10 calendar days after receipt from the executive of written notice of the event which constitutes Good Reason.

If the Named Executive Officer’s employment terminates due to disability or death, then the Company shall make a pro rata payment of the target amounts payable under any annual and long-term incentive compensation awards then in effect. In the event of any other termination of employment, no amounts are payable under the agreement.

If the Company elects not to extend the Named Executive Officer’s employment agreement for any year after expiration of the initial term, then the Named Executive Officer will be treated as if he were terminated by the Company without Cause and entitled to the severance pay and other benefits described above, except that such pay and benefits will not be paid until his actual termination of employment and if his actual termination occurs between ages 64 and 65, his severance multiplier (if higher than one) is reduced to one, and if after age 65, the executive will not be entitled to any severance payment or other benefits under the agreement.

In exchange for the benefits provided under the agreement, the Named Executive Officers agree not to compete with the Company or solicit or interfere with any Company employee or customer for a two-year period after his termination of employment, and not to disclose confidential and proprietary Company information. Each Named Executive Officer is also required to execute a release of all claims against the Company as a condition to receiving the severance payment and benefits, if applicable.

Change of Control Severance Plan

If the Named Executive Officers are terminated following a change of control of the Company, then in lieu of the severance payments and benefits described above, the executives are entitled to the severance pay and benefits provided under the Company’s Change of Control Severance Pay Plan. Under the plan, if within two years following a “Change of Control” of the Company as defined in the plan and described below, a Named Executive Officer is terminated by the Company (or its successor in the change of control transaction) without “Cause” as defined in the plan and described below, or terminates his employment for certain reasons, then the Company (or its successor) will pay or provide to the Named Executive Officer: (i) an amount equal to one year of his annual base salary; (ii) a pro rata payment of any annual and long-term incentive compensation amounts for which the performance periods have not ended; (iii) a lump sum payment equal to three (for Mr. McElya) and two (for all other Named Executive Officers) times his current annual base salary plus his annual target bonus amount (for the year preceding the year of the change of

control); (iv) a lump sum payment equal to the value of three (for Mr. McElya) and two (for all other Named Executive Officers) additional years of service credit under the Company’s qualified and nonqualified defined benefit pension plans, assuming the executive’s compensation under such plans for respective period was the highest compensation paid to the executive during any of the five years preceding the year in which his termination of employment occurs (though additional years of service credit are not provided in relation to the qualified plan for this purpose beyond January 31, 2009 when the Company froze the qualified plan); (v) three years (for Mr. McElya) and two years (for all other Named Executive Officers) of continued coverage under the life and health plans sponsored by the Company and in which the executive was covered immediately prior to his termination; (vi) medical and life insurance coverage for the Named Executive Officer and his spouse for their lifetimes, and for his dependent children until they cease to qualify as dependents, at the same cost as was being charged to the Named Executive Officer immediately prior to the change of control; and (vii) outplacement services for up to two calendar years following the year of termination, not to exceed a cost equal to the lesser of 15% of the Executive’s annual base pay or $50,000. If, during the first 36 months (for Mr. McElya) or 24 months (for all other Named Executive Officers) of life and medical benefit continuation, the Company is unable to provide what are otherwise intended to be non-taxable benefits to the Named Executive Officer and his covered family members on a tax-free basis, then the Company will make an additional payment to the Named Executive Officer to reimburse him for the taxes due on such benefits. In addition, under the Supplementary Benefit Plan (as described in the Executive Compensation Components section), participants receive a lump sum payout of the present value of their accrued benefits under this plan within 60 days after a termination of employment as described in this paragraph.

A “Change of Control” under the plan means the occurrence of any of the following events: (i) the sale or disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than certain permitted entities affiliated with the Company or its Sponsors or (ii) any person or group, other than such permitted entities, becomes the “beneficial owner” (as defined in Rules 13d-3 and l3d-5 under the Exchange Act), directly or indirectly, of greater than or equal to 50% of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise, except where one or more of the Sponsors and/or their respective affiliates, immediately following such merger, consolidation or other transaction, continue to have the ability to designate or elect a majority of the board of directors of the Company (or the board of directors of the resulting entity or its parent company). A transaction or series of transactions that would otherwise not constitute a Change of Control is treated as a Change of Control for purposes of the Named Executive Officer’s entitlements under the plan if clause (i), above, is satisfied in respect of the business or division in which such executive is principally engaged.

Termination for “Cause” under the plan has the same meaning as termination for Cause under Mr. McElya’s employment agreement, described above. The circumstances that constitute reasons under the plan for which a Named Executive Officer may terminate his employment and be entitled to severance benefits as if he was terminated without Cause are as follows: (i) for Messrs. McElya, Hasler, Campbell, Beard and Stephenson, a significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position held by the executive immediately prior to the Change in Control, (ii) a reduction in the executive’s base salary or opportunities for incentive compensation under applicable Company plans and programs, (iii) the termination or denial of the executive’s rights to employee benefits or a reduction in the scope or aggregate value thereof, (iv) any material breach of its obligations under the plan by the Company or any successor or (v) a requirement by the Company that the executive move his principal work location more than 50 miles; in each case other than (v) unless remedied by the Company within ten calendar days following notice from the executive of such circumstances. Under the plan, Mr. McElya may voluntarily terminate his employment for any reason or without reason during the thirty-day period immediately following the date that is six months after a Change of Control has occurred (other than a Change of Control related to an initial public offering) and receive the severance benefits applicable to termination without Cause.

The plan also provides that if any payment or the amount of benefits due under the plan or otherwise would be considered an excess parachute payment that subjects the Named Executive Officer to excise tax under Internal Revenue Code Section 4999, then the Company will make an additional “gross-up” payment to the Named Executive Officer to reimburse him for such taxes (and any taxes due on the gross-up payment).

Finally, the plan provides that if the payment of any money or other benefit due under the plan could cause the application of an accelerated or additional tax to a Named Executive Officer under Internal Revenue Code Section 409A, such payment or benefit will be deferred or otherwise restructured to avoid such acceleration or additional tax.

If a Named Executive Officer’s employment is terminated for any other reason, then no amounts are payable under the plan.

In exchange for the benefits provided under the plan, each Named Executive Officer agrees not to compete with the Company and not to solicit or interfere with any Company employee or customer for a two-year period (for all Named Executive Officers) after his termination of employment, and agrees not to disclose confidential and proprietary Company information. Each Named Executive Officer is also required to execute a release of all claims against the Company as a condition to receiving the severance payment and benefits.

DIRECTOR COMPENSATION

The following table sets forth information regarding the compensation received by each of the Company’s non-employee directors during the year ended December 31, 2008.

Name (a)

  Fees Earned or
Paid in Cash
(b)
  Stock Awards
(c)
  Option Awards
(d)
  All Other
Compensation
(g)
  Total
(h)

S.A. Johnson

  $124,000(1)  —     —    $25,144(8) $149,144

Gerald J. Cardinale

   —  (2)  —     —     —     —  

Gary L. Convis

  $74,000(3)  —    $84,974(7)  —    $158,974

Jack Daly

   —  (2)  —     —     —     —  

Leo F. Mullin

   —  (2)  —     —     —     —  

James A. Stern

   —  (2)  —     —     —     —  

Stephen A. Van Oss

  $38,000(4)  —    $84,974(7)  —    $122,974

Kenneth L. Way

  $84,000(5) $38,675(6) $42,487(7)  —    $165,162

Michael F. Finley(2)

   —  (2)  —     —     —     —  

(1)Represents $115,000 for Mr. Johnson’s annual outside director fee and service during the year as Lead Director, and $9,000 for attendance at meetings of the Board of Directors in 2008.
(2)As officers or nominees of the Company’s Sponsors, Messrs. Cardinale, Daly, Finley, Mullin and Stern were not entitled to compensation for serving as a director or member of any committee of the Board of Directors. Mr. Finley resigned from the Board of Directors effective April 30, 2008.
(3)Represents $65,000 for Mr. Convis’ annual outside director fee and $9,000 for attendance at meetings of the Board of Directors in 2008.
(4)Represents $32,500 for Mr. Van Oss’ partial year outside director fee, $2,500 for his service as Chairman of the Audit Committee for a portion of 2008 and $3,000 for attendance at meetings of the Board of Directors in 2008.
(5)Represents $65,000 for Mr. Way’s annual outside director fee, $10,000 for his service as Chairman of the Audit Committee for a portion of 2008 and Chairman of the Compensation Committee for the remainder of 2008, and $9,000 for attendance at meetings of the Board of Directors in 2008.
(6)The amount shown in column (c) represents the compensation costs associated with Company matching stock units allocated under the Management Stock Purchase Plan as determined in accordance with FAS 123(R). See Note 17 of the Company’s financial statements for 2007 for the assumptions made in determining the FAS 123(R) values. There can be no assurance that the FAS 123(R) value will ever be realized. The Management Stock Purchase Plan allows non-executive directors to defer fees under the plan and allocate them to Company stock units that are eligible for matching grants on the same basis as that applicable to executives.
(7)The amount shown in column (d) represents the compensation costs of stock option awards granted in 2008 for financial reporting purposes under FAS 123(R). See Note 17 of the Company’s financial statements for 2008 for the assumptions made in determining FAS 123(R) values. There can be no assurance that the FAS123(R) value will ever be realized.
(8)Represents reimbursement of health care benefit premiums.

Summary of Director Compensation

None of our directors who are officers or nominees of our Sponsors receive any compensation for serving as a director or as a member or chair of a committee of the Board of Directors. Members of the Board of Directors who are not employees of the Company or officers, nominees or employees of our Sponsors are compensated with an outside director fee in the amount of $65,000 per year and, if they serve as chair of a committee of the Board of Directors, an additional fee of $10,000 per year. Our directors who are not employees of the Company or officers, nominees or employees of our Sponsors also receive $1,500 per meeting of the Board of Directors that such members attend, and are eligible to receive grants of non-qualified and incentive stock options and other stock-based awards under the Company’s Stock Incentive Plan.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the above Compensationheadings “Compensation Discussion & Analysis, with management” “Executive Compensation” and based on such review“Director Compensation” and discussion, has recommended to the board of directors that the Compensation Discussion & Analysis be included in this annual report.is incorporated herein by reference.

 

Kenneth L. Way, Chairman
Jack Daly
James A. Stern

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information concerning the security ownership of certain beneficial owners and management of the Company’s voting securities and equity securities appears in the Company’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders, under the heading “Stock Ownership” and is incorporated herein by reference.

Equity Compensation Plan Information

The following table and accompanying footnotes showprovides information as of December 31, 2010 regarding the beneficial ownershipCompany’s equity compensation plans, all of which have been approved by the issued and outstanding common stock of Cooper-Standard Holdings Inc. as of March 24, 2009 by (i) each person known by us to beneficially own more than 5% of the issued and outstanding common stock of Cooper-Standard Holdings Inc., (ii) each of our directors, (iii) each named executive officer and (iv) all directors and executive officers as a group.Company’s security holders:

 

Name and beneficial owner

  Number  Percent 

The Cypress Group L.L.C.(1)

  1,715,000  49.3%

The Goldman Sachs Group, Inc.(2)

  1,715,000  49.3 

James S. McElya

  20,000  * 

S.A. (Tony) Johnson

  5,000  * 

Kenneth L. Way

  2,500  * 

James A. Stern(3)

  —    —   

Gerald J. Cardinale(4)

  1,715,000  49.3 

Jack Daly

  1,715,000  49.3 

Leo F. Mullin

  1,000  * 

Larry J. Beard

  5,000  * 

Allen J. Campbell

  3,150  * 

Edward A. Hasler

  2,700  * 

All directors and executive officers as a group (11 persons)(5)

  39,350  1.1%

Compensation Plan

  Number of securities
to be issued upon exercise of
outstanding  options,
warrants and rights
(a)
  Weighted average
exercise price of
outstanding options,
warrants and  rights
(b)
  Number of securities
available for future
issuance under  equity
compensation plans
(excluding securities
reflected in column(a))
(c)
 

Equity compensation plans approved by security holders

   1,019,590(1)  $25.52(2)   780,566  

Equity compensation plans not approved by security holders

   —      —      —    
             

Total

   1,019,590   $25.52    780,566  
             

 

*less than 1%.
(1)Includes 1,624,386Consists of 838,952 shares ofunderlying outstanding stock options (whether vested or unvested); and 180,638 converted common shares related to 42,099 underlying time-vested restricted preferred stock. All stock owned by Cypress Merchant Banking Partners II L.P., 71,337 shares of common stock owned by Cypress Merchant Banking II C.V., 15,847 shares of common stock owned by 55th Street Partners II L.P. (collectively, the “Cypress Funds”) and 3,430 shares owned by Cypress Side-by-Side L.L.C. Cypress Associates II L.L.C.based compensation is the managing general partner of Cypress Merchant Banking II C.V. and the general partner of Cypress Merchant Banking Partners II L.P. and 55th Street Partners II L.P., and has voting and investment power over the shares held or controlled by each of these funds. Certain executives of The Cypress Group L.L.C., including Messrs. Jeffrey Hughes and James Stern, may be deemed to share beneficial ownershipdiscussed in Note 19. “Stock Based Compensation,” of the shares shown as beneficially owned bynotes to the Cypress Funds. Each of such individuals disclaims beneficial ownership of such shares. Cypress Side-By-Side L.L.C. is a sole member-L.L.C. of which Mr. James A. Stern is the sole member. The business address of these entities is c/o The Cypress Group L.L.C., 65 East 55th Street, New York, New York 10022.consolidated financial statements.
(2)

The number of shares indicated as owned by The Goldman Sachs Group, Inc. (“GS Group”) reflects the number of shares of common stock that correspondsThere is no cost to the numberrecipient for shares issued pursuant to conversion of common shares held by investment partnerships (the “GS Funds”), ofrestricted preferred stock. Because there is no strike price applicable to these stock awards they are excluded from the weighted-average exercise price which affiliates of GS Group are the general partner or managing general partner. GS Group and certain affiliates, including Goldman, Sachs & Co., may be deemedpertains solely to directly or indirectly own in the aggregate 1,715,000 shares of commonoutstanding stock which are deemed to be beneficially owned directly or indirectly by the GS Funds. Goldman, Sachs & Co. is the investment manager for certain of the GS Funds. Goldman, Sachs & Co. is a direct and indirect, wholly owned subsidiary of GS Group. GS Group, Goldman, Sachs & Co. and the GS Funds share voting power and investment power with certain of their respective affiliates. Shares deemed to be beneficially owned by the GS Funds consist of: (a) GS Capital Partners 2000, L.P. – 970,536 shares, (b) GS Capital Partners 2000 Offshore, L.P. – 352,656 shares, (c) GS Capital Partners 2000 GmbH & Co. Beteiligungs KG – 40,565 shares, (d) GS Capital Partners 2000 Employee Fund, L.P. – 308,368 shares and (e) Goldman Sachs Direct Investment Fund 2000, L.P. – 42,875 shares. GS Group, Goldman, Sachs & Co. and their affiliates each disclaims beneficial ownership of the shares of common stock owned directly

or indirectly by the GS Funds, except to the extent of their pecuniary interest therein, if any. The business address of these entities is c/o GS Capital Partners 2000, 85 Broad St., New York, New York 10004.

(3)Mr. Stern is Chairman of The Cypress Group L.L.C. Mr. Stern may be deemed to share beneficial ownership of the shares shown as beneficially owned by the Cypress Funds, but disclaims beneficial ownership of such shares. Cypress Side-By-Side L.L.C. is a sole member-L.L.C. of which Mr. James A. Stern is the sole member.
(4)Mr. Cardinale is a Managing Director in Goldman, Sachs & Co.’s Principal Investment Area. Mr. Cardinale disclaims beneficial ownership of any shares held or controlled by these entities or their affiliates, except to the extent of his pecuniary interest therein, if any.
(5)Does not include the 1,715,000 shares shown on the table with respect to Mr. Cardinale, which represent the same 1,715,000 shares shown with respect to The Goldman Sachs Group, Inc., or the 1,715,000 shares shown on the table with respect to Mr. Stern, which represent the same 1,715,000 shares shown with respect to the Cypress Group L.L.C.options.

 

Item 13.Certain Relationships and Related Transactions, and Director Independence

Messrs. Johnson, Cardinale, Convis, Daly, Mullin, Stern, Van Oss and Way are “independent” directors as definedInformation regarding transactions with related persons appears in the listing standardsCompany’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders under the heading “The Board’s Committee and Their Functions” and is incorporated herein by reference.

Information regarding the independence of the Nasdaq Stock Market. Mr. McElya, our Chairman,Company’s directors appears in the Company’s definitive Proxy Statement for its 2011 Annual Meeting of Stockholders under the heading “Corporate Governance” and is not an “independent” director within such definition.incorporated herein by reference.

 

Item 14.Principal Accountant Fees and Services (dollar amounts in thousands)

   Fiscal Year Ended December 31,
   2007  2008

Audit fees (1)

  $3,487  $3,188

Audit-related fees (2)

   861   245

Tax fees (3)

   1,034   993

(1)Audit fees include services rendered in connection with the audit of our annual financial statements, the reviews of the financial statements included in our quarterly reports on Form 10-Q, international statutory audits, and assistance with filing of our registration statements.
(2)Audit related fees include services related to the audits of our employee benefit plans and consultation concerning financial accounting and reporting standards, as well as services related to transaction advisory.
(3)Tax fees include services related to tax compliance, tax advice, and tax planning.

The Audit Committee has considered whetherInformation regarding the provisionCompany’s independent auditor appears in the Company’s definitive Proxy Statement for its 2011 Annual Meeting of services describedStockholders under the heading “Tax Fees”“Certain Relationships and Related Transactions” and is compatible with maintaining Ernst & Young LLP’s independence. In light of the nature of work performed and amount of the fees paid to Ernst & Young LLP for those services, the Audit Committee concluded that the provision of such services is compatible with maintaining Ernst & Young LLP’s independence.

The Audit Committee has also adopted procedures for pre-approving all audit and non-audit services providedincorporated herein by Ernst & Young LLP. All of the audit, audit-related, tax, and all other services performed by Ernst & Young LLP were pre-approved by the Audit Committee pursuant to its pre-approval policies and procedures as described above.reference.

PART IV

 

Item 15.15. Exhibits and Financial Statement Schedules

(a) Documents Filed as Part of this Annual Report on Form 10-K:

 

(a)Documents Filed as Part of this Report on Form 10-K:

   10-K
Report
page(s)

(1) Financial Statements:

  

Report of Ernst & Young LLP, independent registered public accountantsIndependent Registered Public Accounting Firm

  5260

Report of Ernst  & Young LLP, Independent Registered Public Accounting Firm, Internal Control over Financial Reporting

61

Consolidated statements of operations for the years ended December  31, 2008 2007 and 20062009, the five months ended May, 31, 2010 and the seven months ended December 31, 2010

  5362

Consolidated balance sheets as of December 31, 20082009 and December 31, 20072010

  5463

Consolidated statements of changes in stockholders’ equity (deficit) for the years ended December  31, 2008 2007 and 20062009, the five months ended May 31, 2010 and the seven months ended December 31, 2010

  5564

Consolidated statements of cash flows for the years ended December  31, 2008 2007 and 20062009, the five months ended May 31, 2010 and the seven months ended December 31, 2010

  5665

Notes to Consolidatedconsolidated financial statements

  5766

2. Financial Statement Schedules:

  

Schedule II – II—Valuation and Qualifying Accounts

  101122
All other financial statement schedules are not required under the related instructions or are inapplicable and therefore have been omitted.
3. The Exhibits listed on the “Index to Exhibits” are filed herewith or are incorporated by reference as indicated below.

All other financial statement schedules are not required under the related instructions or are inapplicable and therefore have been omitted.

3. The Exhibits listed on the “Index to Exhibits” are filed herewith or are incorporated by reference as indicated below.

Index to Exhibits

 

Exhibit No.

  

Description of Exhibit

    3.3**
  2.1*  Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization, dated March 26, 2010 (incorporated by reference to Exhibit 2.1 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed May 24, 2010).
  3.1*Third Amended and Restated Certificate of Incorporation of Cooper-Standard Holdings Inc., dated May 27, 2010 (incorporated by reference to Exhibit 3.33.1 to theCooper-Standard Holdings Inc.’s Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)S-1 (File No. 333-168316)).
  3.4***3.2*  Certificate of Amendment of Certificate of Incorporation of Cooper-Standard Holdings Inc. dated November 12, 2007.
    3.5**Amended and Restated Bylaws of Cooper-Standard Holdings Inc. (incorporated by reference to Exhibit 3.43.2 to theCooper-Standard Holdings Inc.’s Registration Statement on Form S-4S-1 (File No. 333-168316)).
  3.3*Cooper-Standard Holdings Inc. Certificate of Designations 7% Cumulative Participating Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to Cooper-Standard AutomotiveHoldings Inc., the Company and other Registrant Guarantors dated March 31, 2005)’s Registration Statement on Form S-1 (File No. 333-168316)).
  4.1**  Indenture, 7%8 1/2% Senior Notes due 2012,2018, dated as of December 23, 2004, among Cooper-Standard Automotive Inc., the Guarantors named thereinMay 11, 2010, between CSA Escrow Corporation and Wilmington Trust Company,U.S. Bank National Association, as Trusteetrustee (incorporated by reference to Exhibit 4.1 to theCooper-Standard Holdings Inc.’s Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
    4.2**Indenture, 8 3/8% Senior Subordinated Notes due 2014, dated as of December 23, 2004, among Cooper-Standard Automotive Inc., the Guarantors named therein and Wilmington Trust Company, as Trustee (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)S-1 (File No. 333-168316)).
  4.3***4.2*  Supplemental Indenture, No. 1, Senior Notes due 2012,2018, dated as of July 11, 2006, betweenMay 27, 2010, among Cooper-Standard Automotive FHS Inc., Cooper-Standard Holdings Inc., the subsidiaries of Cooper-Standard Automotive Inc. set forth on the signature page thereto and U.S. Bank National Association, as Guaranteeing Subsidiary, and Wilmington Trust Company, as Trustee.trustee under the indenture (incorporated by reference to Exhibit 4.1 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
  4.4***Supplemental Indenture No. 1, Senior Subordinated Notes due 2014, dated as of July 11, 2006, between Cooper-Standard Automotive FHS Inc., as Guaranteeing Subsidiary, and Wilmington Trust Company, as Trustee.
    4.5**4.3*  Registration Rights Agreement, 7% Senior Notes due 2012, dated as of December 23, 2004,May 11, 2010, by and among Cooper-Standard Automotive Inc., the Guarantors named therein,CSA Escrow Corporation and Deutsche Bank Securities Inc., Lehman Brothers Inc., Goldman, Sachs & Co., UBS Securities LLC, BNP Paribas Securities Corp. and Scotia Capital (USA) Inc. (incorporated by reference to Exhibit 4.3 to theCooper-Standard Holdings Inc.’s Registration Statement on Form S-4S-1 (File No. 333-168316)).
  4.4*Joinder to Registration Rights Agreement, dated May 27, 2010 (incorporated by reference to Exhibit 4.2 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
  4.5*Registration Rights Agreement, dated as of May 27, 2010, by and among Cooper-Standard AutomotiveHoldings Inc., the CompanyBackstop Purchasers and the other Registrant Guarantors dated March 31, 2005)holders party thereto (incorporated by reference to Exhibit 4.3 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
  4.6**  Registration RightsWarrant Agreement, 8 3/8% Senior Subordinated Notes due 2014, dated as of December 23, 2004, amongMay 27, 2010, between Cooper-Standard AutomotiveHoldings Inc. and Computershare Inc. and Computershare Trust Company, N.A., the Guarantors named therein, Deutsche Bank Securities Inc., Lehman Brothers Inc., Goldman, Sachs & Co., UBS Securities LLC, BNP Paribas Securities Corp. and Scotia Capital (USA) Inc.collectively as Warrant Agent (incorporated by reference to Exhibit 4.4 to the Registration StatementCooper-Standard Holdings Inc.’s Current Report on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)8-K filed June 3, 2010).
  4.7**Form of 7% Senior Notes due 2012, exchange note Global Note (incorporated by reference to Exhibit 4.5 to Amendment 1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated April 15, 2005).
    4.8**  Form of 8 31/82% Senior Subordinated Notes due 2014, exchange note Global Note (incorporated by reference to2018 (included in Exhibit 4.6 to Amendment 1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated April 15, 2005)4.1).
    4.9**10.1*  7% Senior Notes due 2012, Rule 144A Global NoteLoan and Security Agreement, dated as of May 27, 2010, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., Cooper-Standard Automotive Canada Limited, the other guarantors party thereto, certain financial institutions as lenders and Bank of America, N.A., as Agent (incorporated by reference to Exhibit 4.710.1 to Amendment 1 to the Registration StatementCooper-Standard Holdings Inc.’s Current Report on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated April 15, 2005).
    4.10**7% Senior Notes due 2012, Regulation S Global Note (incorporated by reference to Exhibit 4.8 to Amendment 1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated April 15, 2005)8-K filed June 3, 2010).

Exhibit No.

 

Description of Exhibit

    4.11**
10.2* 8 3/8% Senior Subordinated Notes due 2014, Rule 144A Global Note (incorporatedEscrow Agreement, dated as of May 11, 2010, by reference to Exhibit 4.9 to Amendment 1 to the Registration Statement on Form S-4 ofand among CSA Escrow Corporation, Cooper-Standard Automotive Inc., the CompanyU.S. Bank National Association, as trustee, and other Registrant Guarantors dated April 15, 2005).
    4.12**8 3/8% Senior Subordinated Notes due 2014, Regulation S Global Note (incorporated by reference to Exhibit 4.10 to Amendment 1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated April 15, 2005).
  10.1**Credit Agreement, datedU.S. Bank National Association, as of December 23, 2004, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., Cooper-Standard Automotive Canada Limited, various lending institutions, Deutsche Bank Trust Company Americas, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Goldman Sachs Credit Partners L.P., UBS Securities LLC, and The Bank of Nova Scotia, as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.2**U.S. Security Agreement, dated as of December 23, 2004, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., certain subsidiaries of Cooper-Standard Holdings Inc. and Deutsche Bank Trust Company Americas, as Collateral Agentescrow agent (incorporated by reference to Exhibit 10.2 to theCooper-Standard Holdings Inc.’s Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)S-1 (File No. 333-168316)).
10.3**U.S. Pledge Agreement, dated as of December 23, 2004, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., certain subsidiaries of Cooper-Standard Holdings Inc. and Deutsche Bank Trust Company Americas, as Collateral Agent (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.4**U.S. Subsidiaries Guaranty, dated as of December 23, 2004, by certain subsidiaries of Cooper-Standard Holdings Inc. in favor of Deutsche Bank Trust Company Americas, as Administrative Agent (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.5**Intercompany Subordination Agreement, dated as of December 23, 2004, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., certain subsidiaries of Cooper-Standard Holdings Inc. and Deutsche Bank Trust Company Americas, as Collateral Agent (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.6First Amendment and Consent to Credit Agreement, dated as of February 1, 2006, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., Cooper-Standard Automotive Canada Limited, various lending institutions, Deutsche Bank Trust Company Americas, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 10, 2005).
  10.7Second Amendment to Credit Agreement, dated as of July 26, 2007, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., Cooper-Standard Automotive Canada Limited, Steffens Beheer BV, various Lender parties, and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 1, 2007).

Exhibit No.

Description of Exhibit

  10.8Third Amendment to Credit Agreement, dated as of December 18, 2008, among Cooper-Standard Holdings Inc., Cooper-Standard Automotive Inc., Cooper-Standard Automotive Canada Limited, Cooper-Standard Automotive International Holdings B.V. (f/k/a Steffens Beheer BV), various Lender parties, and Deutsche Bank Trust Company Americas as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 18, 2008).
  10.9**Stock Purchase Agreement, dated as of September 16, 2004, among Cooper Tire & Rubber Company, Cooper Tyre & Rubber UK Limited and Cooper-Standard Holdings Inc. (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.10**Amendment Number 1 to the Stock Purchase Agreement, dated as of December 3, 2004, among Cooper Tire & Rubber Company, Cooper Tyre & Rubber UK Limited and Cooper-Standard Holdings Inc. (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.11Stock and Asset Purchase Agreement, dated as of December 4, 2005, between ITT Industries, Inc. and Cooper-Standard Automotive Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 8, 2005).
  10.12First Amendment to the Stock and Asset Purchase Agreement dated February 6, 2006 between Cooper-Standard Automotive Inc. and ITT Industries, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 10, 2006).
  10.13Sale and Purchase Agreement, dated and notarized on June 9 and June 10, 2007, by and between Automotive Sealing Systems S.A., Cooper-Standard Automotive Inc. and CSA Germany GmbH & Co. KG (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated June 14, 2007).
  10.14**Stockholders Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and the Stockholders named therein (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.15**Registration Rights Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and the Stockholders named therein (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.16**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and Cypress Merchant Banking Partners II L.P., Cypress Merchant Banking II C.V., 55th Street Partners II L.P. and Cypress Side-by-Side LLC (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
  10.17**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and GS Capital Partners 2000, L.P., GS Partners 2000 Offshore, L.P., GS Capital Partners 2000 GmbH & Co. KG, GS Capital Partners 2000 Employee Fund, L.P. and Goldman Sachs Direct Investment Fund 2000, L.P. (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
*10.18**** Fourth Amended and Restated Employment Agreement, dated July 1, 2008, by and among Cooper-Standard Automotive Inc. and James S. McElya.

Exhibit No.

Description of Exhibit

*10.19***Executive Put Option Agreement, dated December 19, 2007, by and among Cooper-Standard Holdings Inc., Cypress Merchant Banking Partners II L.P., Cypress Merchant Banking II C.V., 55th Street Partners II L.P., Cypress Side-by-Side LLC, GS Capital Partners 2000, L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital Partners 2000 GmbH & Co. Beteiligungs KG, GS Capital Partners 2000, L.P. and James S. McElya.
*10.20**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and James S. McElya (incorporated by reference to Exhibit 10.2010.18 to the Registration StatementCooper-Standard Holdings Inc.’s Annual Report on Form S-4 of Cooper-Standard Automotive Inc.,10-K for the Company and other Registrant Guarantors dated Marchfiscal year ended December 31, 2005)2008).
*10.21****10.4*† Employment Agreement, dated as of July 1, 2008, by and among Cooper-Standard Automotive Inc. and Edward A. Hasler.
*10.22**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and Edward A. Hasler (incorporated by reference to Exhibit 10.1710.21 to the Registration StatementCooper-Standard Holdings Inc.’s Annual Report on Form S-4 of Cooper-Standard Automotive Inc.,10-K for the Company and other Registrant Guarantors dated Marchfiscal year ended December 31, 2005)2008).
*10.23****10.5*† Employment Agreement, dated as of January 1, 2009, by and among Cooper-Standard Automotive Inc. and Allen J. Campbell.
*10.24**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and Allen J. Campbell (incorporated by reference to Exhibit 10.1310.23 to the Registration StatementCooper-Standard Holdings Inc.’s Annual Report on Form S-4 of Cooper-Standard Automotive Inc.,10-K for the Company and other Registrant Guarantors dated Marchfiscal year ended December 31, 2005)2008).
*10.25****10.6*† Employment Agreement, dated as of January 1, 2009, by and among Cooper-Standard Automotive Inc. and Keith D. Stephenson.
*10.26**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and S.A. JohnsonStephenson (incorporated by reference to Exhibit 10.1910.25 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
*10.27**Subscription Agreement, dated as of December 23, 2004, by and among Cooper-Standard Holdings Inc. and Kenneth L. Way (incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005).
*10.29Subscription Agreement, dated as of October 27, 2005, by and among Cooper-Standard Holdings Inc. and Leo F. Mullin (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated November 2, 2005).
*10.30****Cooper-Standard Automotive Inc. Change of Control Severance Pay Plan, as Amended and Restated Effective July 1, 2008.
*10.31***2004 Cooper-Standard Holdings Inc. Stock Incentive Plan, as Amended and Restated Effective November 1, 2007.
*10.32****Form of Nonqualified Stock Option Agreement.
*10.33****Cooper-Standard Automotive Inc. Deferred Compensation Plan, Effective January 1, 2005 with Amendments through December 31, 2008.
*10.34Cooper-Standard Automotive Inc. Pre-2005 Executive Deferred Compensation Plan, as Amended and Restated Effective January 1, 2005 (incorporated by reference to Exhibit 10.34 to the Company’s’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, dated April 2, 2007)2008).
10.7**10.35**** Cooper-Standard Automotive Inc. Executive Severance Pay Plan effective January 1, 2011.
10.8*†Cooper-Standard Automotive Inc. Deferred Compensation Plan, effective January 1, 2005 with Amendments through December 31, 2008 (incorporated by reference to Exhibit 10.33 to Cooper-Standard Holdings Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
10.10**†Cooper-Standard Automotive Inc. Supplemental Executive Retirement Plan, effective January 1, 2011.
10.12**†

Cooper-Standard Automotive Inc. Nonqualified Supplementary Benefit Plan, Amended and Restated as of January 1, 2009.2011.

10.13**10.36 Cooper-Standard Automotive Inc. Long-Term Incentive PlanPlan.
10.14*Commitment Agreement, dated as of March 19, 2010, between Cooper-Standard Holdings Inc. and certain backstop parties (incorporated by reference to Exhibit 10.3610.49 to the Company’sCooper-Standard Holdings Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006,2009).
10.15*†Employment agreement, dated April 2, 2007)as of January 1, 2009, by and between Cooper-Standard Automotive Inc. and Michael C. Verwilst (incorporated by reference to Exhibit 10.50 to Cooper-Standard Holdings Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009).
10.16**†Form of Amendment to Employment Agreement, effective January 1, 2011
10.17**†2011 Cooper-Standard Automotive Inc. Annual Incentive Plan.
10.18*Director Nomination Agreement, made as of May 27, 2010, among Cooper-Standard Holdings Inc. and Barclays Capital, Inc. (incorporated by reference to Exhibit 10.2 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.19*Director Nomination Agreement, made as of May 27, 2010, among Cooper-Standard Holdings Inc. and Silver Point Capital, L.P., on behalf of its affiliates and related funds (incorporated by reference to Exhibit 10.3 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).

Exhibit No.

 

Description of Exhibit

  10.37**
10.20* LetterDirector Nomination Agreement, datedmade as of December 23, 2004, betweenMay 27, 2010, among Cooper-Standard Holdings Inc. and CypressOak Hill Advisors Inc.L.P., on behalf of certain funds and separate accounts that it manages (incorporated by reference to Exhibit 10.2710.4 to the Registration StatementCooper-Standard Holdings Inc.’s Current Report on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)8-K filed June 3, 2010).
  10.38**10.21* LetterDirector Nomination Agreement, datedmade as of December 23, 2004, betweenMay 27, 2010, among Cooper-Standard Holdings Inc. and Goldman SachsCapital Research and Management Company, as investment advisor to certain funds it manages, TCW Shared Opportunity Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P., TCW Shared Opportunity Fund V, L.P., TD High Yield Income Fund, and Lord, Abbett & Co. LLC, as investment manager on behalf of multiple clients (incorporated by reference to Exhibit 10.2810.5 to the Registration StatementCooper-Standard Holdings Inc.’s Current Report on Form S-4 of Cooper-Standard Automotive Inc., the Company and other Registrant Guarantors dated March 31, 2005)8-K filed June 3, 2010).
  10.39*10.22*** Limited Liability Company Agreement of Nishikawa Standard Company LLC, dated as of January 1, 2008.2011 Cooper-Standard Holdings Inc. Omnibus Incentive Plan.
10.23**†Form of Cooper-Standard Holdings Inc. 2011 Omnibus Incentive Plan Stock Award Agreement for key employees.
10.24**†Form of Cooper-Standard Holdings Inc. 2011 Omnibus Incentive Plan Nonqualified Stock Option Agreement for key employees.
10.25**†Form of Cooper-Standard Holdings Inc. 2011 Omnibus Incentive Plan Restricted Stock Unit Award Agreement for key employees.
10.26*†2010 Cooper-Standard Holdings Inc. Management Incentive Plan (incorporated by reference to Exhibit 10.6 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.27*†Form of 2010 Cooper-Standard Holdings Inc. Management Incentive Plan Nonqualified Stock Option Agreement for key employees (incorporated by reference to Exhibit 10.7 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.28*†Form of 2010 Cooper-Standard Holdings Inc. Management Incentive Plan Restricted Stock Award Agreement for key employees (incorporated by reference to Exhibit 10.8 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.29*†Form of 2010 Cooper-Standard Holdings Inc. Management Incentive Plan Nonqualified Stock Option Agreement for directors (incorporated by reference to Exhibit 10.9 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.30*†Form of 2010 Cooper-Standard Holdings Inc. Management Incentive Plan Restricted Stock Award Agreement for directors (incorporated by reference to Exhibit 10.10 to Cooper-Standard Holdings Inc.’s Current Report on Form 8-K filed June 3, 2010).
10.31*Settlement Agreement, dated as of March 17, 2010 (incorporated by reference to Exhibit 10.2 to Cooper-Standard Holdings Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010).
12.1**Computation of Ratio of Earnings to Fixed Charges.
21.1**** List of SubsidiariesSubsidiaries.
24.1**** Powers of AttorneyAttorney.
31.1**** Certification of Principal Executive Officer Pursuant to 15 U.S.C. 78m(a) or 78o(d)Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).
31.2**** Certification of Principal Financial Officer Pursuant to 15 U.S.C. 78m(a) or 78o(d)Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).
32.1**** Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).

Exhibit No.

Description of Exhibit

32.2**** 

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley

Act of 2002).

 

*Management contracts and compensatory plans or arrangementsPreviously filed.
**Refers to the applicable exhibit filed with the Registration Statement on Form S-4 of Cooper-Standard Automotive Inc. (File Nos. 333-123708)Filed herewith
***Incorporated by reference to the applicable exhibit filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007
****Filed herewithManagement contracts and compensation plans or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  COOPER-STANDARD HOLDINGS INC.
Date: March 31, 200921, 2011  

/s/ James S. McElya

  

James S. McElya

Chairman and Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 31, 2009,21, 2011 by the following persons on behalf of the registrant in the capacities indicated.

 

Signature

  

Title

/s/ James S. McElya

  

Chairman and Chief Executive Officer and Director

James S. McElya  

/s/ Allen J. Campbell

  

Chief Financial Officer (Principal Financial Officer)

Allen J. Campbell  

/s/ Helen T. Yantz

  

Controller (Principal Accounting Officer)

Helen T. Yantz  

/s/ Edward A. HaslerGlenn R. August

  

Director

Glenn R. August  Vice Chairman and President, North America, and Director
Edward A. Hasler

/s/ Gerald J. CardinaleOrlando A. Bustos

  

Director

Orlando A Bustos  Director
Gerald J. Cardinale

/s/ Gary L. ConvisLarry Jutte

  

Director

Larry Jutte  Director
Gary L. Convis

/s/ Jack DalyDavid J. Mastrocola

  

Director

David J. Mastrocola  Director
Jack Daly

/s/ S. A. (Tony) Johnson

Director
S. A. (Tony) Johnson

/s/ Leo F. Mullin

Director
Leo F. Mullin

/s/ James A. Stern

Director
James A. Stern

/s/ Stephen A. Van Oss

  

Director

Stephen A. Van Oss  

/s/ Kenneth L. Way

  

Director

Kenneth L. Way  

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

No annual report to security holders or proxy material has been sent to the registrant’s security holders.

147