PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~NET INCOME~~OPERATIONS

(Unaudited)

(Dollar amounts in thousands except per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Sales $ 869,016
$ 855,656
$ 2,680,212
$ 2,597,457
Cost of products sold 718,187
690,984
2,187,058
2,101,000
Gross profit 150,829
164,672
493,154
496,457
Selling, administration & engineering expenses 94,145
92,368
267,883
268,498
Amortization of intangibles 3,432
3,457
10,563
9,974
Impairment charges —
—
4,270
—
Restructuring charges 9,909
10,430
28,220
33,468
Other operating loss —
—
—
155
Operating profit 43,343
58,417
182,218
184,362
Interest expense, net of interest income (10,256 ) (10,114 ) (31,788 ) (29,861 )
Equity in earnings of affiliates 660
1,386
3,735
5,823
Loss on refinancing and extinguishment of debt —
—
(1,020 ) —
Other expense, net (451 ) (518 ) (3,275 ) (8,589 )
Income before income taxes 33,296
49,171
149,870
151,735
Income tax expense 7,838
12,525
40,258
43,312
Net income 25,458
36,646
109,612
108,423
Net income attributable to noncontrolling interests (818 ) (284 ) (2,810 ) (549 )
Net income attributable to Cooper-Standard Holdings Inc. $ 24,640
$ 36,362
$ 106,802
$ 107,874

Earnings per share:
Basic $ 1.39
$ 2.08
$ 6.01
$ 6.20
Diluted $ 1.32
$ 1.94
$ 5.67
$ 5.77


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Sales	$	683,200	$	739,518	$	1,678,557	$	2,382,211
Cost of products sold	598,714		659,313		1,611,299		2,088,631
Gross profit	84,486		80,205		67,258		293,580
Selling, administration & engineering expenses	60,059		63,020		199,001		224,164
Gain on sale of business, net	(2,314)		1,730		(2,314)		(188,180)

Amortization of intangibles	1,669		4,250		9,632		13,173
Restructuring charges	6,186		5,572		23,236		29,214
Impairment of assets held for sale	0		0		86,470		0
Other impairment charges	100		1,958		1,240		4,146
Operating profit (loss)	18,786		3,675		(250,007)		211,063
Interest expense, net of interest income	(17,985)		(10,351)		(40,993)		(33,858)
Equity in earnings (losses) of affiliates	738		1,515		(842)		5,764

Other income (expense), net	2,784		(514)		(5,357)		(3,091)
Income (loss) before income taxes	4,323		(5,675)		(297,199)		179,878
Income tax (benefit) expense	(2,386)		745		(55,485)		47,001
Net income (loss)	6,709		(6,420)		(241,714)		132,877
Net (income) loss attributable to noncontrolling interests	(2,328)		1,543		1,288		2,036
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	4,381	$	(4,877)	$	(240,426)	$	134,913

Earnings (loss) per share:
Basic	$	0.26	$	(0.29)	$	(14.22)	$	7.83
Diluted	$	0.26	$	(0.29)	$	(14.22)	$	7.80

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollar amounts in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net income $ 25,458
$ 36,646
$ 109,612
$ 108,423
Other comprehensive income (loss):
Currency translation adjustment 16,535
2,663
41,204
12,330
Benefit plan liabilities adjustment, net of tax 3,963
(149 ) 1,235
(620 )
Fair value change of derivatives, net of tax (966 ) 1,881
617
(605 )
Other comprehensive income, net of tax 19,532
4,395
43,056
11,105
Comprehensive income 44,990
41,041
152,668
119,528
Comprehensive income attributable to noncontrolling interests (1,306 ) (266 ) (3,891 ) (317 )
Comprehensive income attributable to Cooper-Standard Holdings Inc. $ 43,684
$ 40,775
$ 148,777
$ 119,211


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net income (loss)	$	6,709	$	(6,420)	$	(241,714)	$	132,877
Other comprehensive income (loss):
Currency translation adjustment	17,488		(29,065)		(4,612)		(32,923)
Benefit plan liabilities adjustment, net of tax	(853)		2,246		1,113		686
Fair value change of derivatives, net of tax	2,072		(1,558)		(1,766)		523
Other comprehensive income (loss), net of tax	18,707		(28,377)		(5,265)		(31,714)
Comprehensive income (loss)	25,416		(34,797)		(246,979)		101,163
Comprehensive (income) loss attributable to noncontrolling interests	(2,970)		2,358		1,063		3,107
Comprehensive income (loss) attributable to Cooper-Standard Holdings Inc.	$	22,446	$	(32,439)	$	(245,916)	$	104,270

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands except share amounts)

September 30, 2017 December 31, 2016
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 372,984
$ 480,092
Accounts receivable, net 571,515
460,503
Tooling receivable 111,543
90,974
Inventories 179,470
146,449
Prepaid expenses 42,685
37,142
Other current assets 97,845
81,021
Total current assets 1,376,042
1,296,181
Property, plant and equipment, net 916,496
832,269
Goodwill 170,765
167,441
Intangible assets, net 72,060
81,363
Other assets 100,233
114,448
Total assets $ 2,635,596
$ 2,491,702

Liabilities and Equity
Current liabilities:
Debt payable within one year $ 32,448
$ 33,439
Accounts payable 491,202
475,426
Payroll liabilities 138,127
144,812
Accrued liabilities 123,955
105,665
Total current liabilities 785,732
759,342
Long-term debt 722,557
729,480
Pension benefits 178,406
172,950
Postretirement benefits other than pensions 56,876
54,225
Other liabilities 47,859
53,914
Total liabilities 1,791,430
1,769,911
7% Cumulative participating convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding —
—
Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,602,827 shares issued and 17,596,621 shares outstanding as of September 30, 2017, and 19,686,917 shares issued and 17,690,611 outstanding as of December 31, 2016 17
17
Additional paid-in capital 513,609
513,934
Retained earnings 502,806
425,972
Accumulated other comprehensive loss (200,588 ) (242,563 )
Total Cooper-Standard Holdings Inc. equity 815,844
697,360
Noncontrolling interests 28,322
24,431
Total equity 844,166
721,791
Total liabilities and equity $ 2,635,596
$ 2,491,702

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

~~COOPER-STANDARD HOLDINGS INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY~~

~~(Unaudited)~~

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

Total Equity
Common Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Cooper-Standard Holdings Inc. Equity Noncontrolling Interests Total Equity
Balance as of December 31, 2016 17,690,611
$ 17
$ 513,934
$ 425,972
$ (242,563 ) $ 697,360
$ 24,431
$ 721,791
Repurchase of common stock (306,072 ) —
(7,407 ) (24,045 ) —
(31,452 ) —
(31,452 )
Warrant exercises 50,145
—
836
—
—
836
—
836
Share-based compensation, net 161,937
—
6,246
(5,923 ) —
323
—
323
Net income —
—
—
106,802
—
106,802
2,810
109,612
Other comprehensive income —
—
—
—
41,975
41,975
1,081
43,056
Balance as of September 30, 2017 17,596,621
$ 17
$ 513,609
$ 502,806
$ (200,588 ) $ 815,844
$ 28,322
$ 844,166


	September 30, 2020		December 31, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	462,666	$	359,536
Accounts receivable, net	389,044		423,155
Tooling receivable, net	88,364		148,175
Inventories	148,800		143,439
Prepaid expenses	31,873		34,452

Other current assets	134,212		93,513

Total current assets	1,254,959		1,202,270
Property, plant and equipment, net	882,476		988,277
Operating lease right-of-use assets, net	111,831		83,376
Goodwill	142,079		142,187
Intangible assets, net	69,690		84,369

Other assets	176,956		135,103
Total assets	$	2,637,991	$	2,635,582

Liabilities and Equity
Current liabilities:
Debt payable within one year	$	54,294	$	61,449
Accounts payable	372,845		426,055
Payroll liabilities	124,558		88,486
Accrued liabilities	106,847		119,841
Current operating lease liabilities	21,492		24,094

Total current liabilities	680,036		719,925
Long-term debt	982,659		746,179
Pension benefits	140,573		140,010
Postretirement benefits other than pensions	44,690		48,313

Long-term operating lease liabilities	91,782		60,234
Other liabilities	66,916		44,939
Total liabilities	2,006,656		1,759,600
7% Cumulative participating convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued and outstanding	0		0
Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 18,962,262 shares issued and 16,896,453 shares outstanding as of September 30, 2020, and 18,908,566 shares issued and 16,842,757 outstanding as of December 31, 2019	17		17
Additional paid-in capital	496,468		490,451
Retained earnings	377,449		619,448
Accumulated other comprehensive loss	(259,231)		(253,741)
Total Cooper-Standard Holdings Inc. equity	614,703		856,175
Noncontrolling interests	16,632		19,807
Total equity	631,335		875,982
Total liabilities and equity	$	2,637,991	$	2,635,582

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Dollar amounts in thousands except share amounts)


	Total Equity
	Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2019	16,842,757	$	17	$	490,451	$	619,448	$	(253,741)	$	856,175	$	19,807	$	875,982
Cumulative effect of change in accounting principle	—	—		—		(1,573)		—		(1,573)		—		(1,573)

Share-based compensation, net	41,785	—		1,874		0		—		1,874		—		1,874




Net loss	—	—		—		(110,588)		—		(110,588)		(1,851)		(112,439)
Other comprehensive loss	—	—		—		—		(35,776)		(35,776)		(507)		(36,283)
Balance as of March 31, 2020	16,884,542	$	17	$	492,325	$	507,287	$	(289,517)	$	710,112	$	17,449	$	727,561


Share-based compensation, net	9,548	—		2,303		0		—		2,303		—		2,303




Net loss	—	—		—		(134,219)		—		(134,219)		(1,765)		(135,984)
Other comprehensive income	—	—		—		—		12,221		12,221		90		12,311
Balance as of June 30, 2020	16,894,090	$	17	$	494,628	$	373,068	$	(277,296)	$	590,417	$	15,774	$	606,191


Share-based compensation, net	2,363	—		1,840		0		—		1,840		—		1,840
Deconsolidation of noncontrolling interest	—	—		—		—		—		—		(2,112)		(2,112)
Net income	—	—		—		4,381		—		4,381		2,328		6,709
Other comprehensive income	—	—		—		—		18,065		18,065		642		18,707
Balance as of September 30, 2020	16,896,453	$	17	$	496,468	$	377,449	$	(259,231)	$	614,703	$	16,632	$	631,335


	Total Equity
	Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2018	17,554,737	$	17	$	501,511	$	569,215	$	(245,937)	$	824,806	$	26,669	$	851,475
Cumulative effect of change in accounting principle	—	—		—		(2,607)		—		(2,607)		—		(2,607)
Repurchase of common stock	(118,774)	—		(2,057)		(3,880)		—		(5,937)		—		(5,937)
Share-based compensation, net	85,937	—		4		(214)		—		(210)		—		(210)
Contribution from noncontrolling interests	—	—		0		—		—		0		2,112		2,112
Net (loss) income	—	—		—		(5,415)		—		(5,415)		52		(5,363)
Other comprehensive income	—	—		—		—		4,239		4,239		371		4,610
Balance as of March 31, 2019	17,521,900	$	17	$	499,458	$	557,099	$	(241,698)	$	814,876	$	29,204	$	844,080

Repurchase of common stock	(626,305)	—		(20,486)		(9,514)		—		(30,000)		—		(30,000)
Share-based compensation, net	5,738	—		3,522		1		—		3,523		—		3,523
Purchase of noncontrolling interest	—	—		1,298		—		—		1,298		(6,057)		(4,759)
Dividends declared to noncontrolling interests	—	—		—		—		—		—		(233)		(233)

Net income (loss)	—	—		—		145,205		—		145,205		(545)		144,660
Other comprehensive loss	—	—		—		—		(7,320)		(7,320)		(627)		(7,947)
Balance as of June 30, 2019	16,901,333	$	17	$	483,792	$	692,791	$	(249,018)	$	927,582	$	21,742	$	949,324

Repurchase of common stock	(72,875)	—		1,084		(1,084)		—		0		—		0
Share-based compensation, net	10,266	—		3,986		4		—		3,990		—		3,990
Contribution from noncontrolling interests	—	—		—		—		—		—		1,686		1,686
Net loss	—	—		—		(4,877)		—		(4,877)		(1,543)		(6,420)
Other comprehensive loss	—	—		—		—		(27,562)		(27,562)		(815)		(28,377)
Balance as of September 30, 2019	16,838,724	$	17	$	488,862	$	686,834	$	(276,580)	$	899,133	$	21,070	$	920,203

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollar amounts in thousands)


	Nine Months Ended September 30,							Nine Months Ended September 30,
	2017			2016				2020		2019
Operating Activities:							Operating Activities:
Net income	$	109,612		$	108,423
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							Net (loss) income	$	(241,714)	$	132,877
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:							Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation	88,850			81,725			Depreciation	107,095		98,795
Amortization of intangibles	10,563			9,974			Amortization of intangibles	9,632		13,173
Impairment charges	4,270			—
Gain on sale of business, net							Gain on sale of business, net	(2,314)		(188,180)

Impairment of assets held for sale							Impairment of assets held for sale	86,470		0
Other impairment charges							Other impairment charges	1,240		4,146
Share-based compensation expense	19,006			18,533			Share-based compensation expense	6,977		10,293
Equity in earnings of affiliates, net of dividends related to earnings	1,647			(2,801		)	Equity in earnings of affiliates, net of dividends related to earnings	6,087		(847)
Loss on refinancing and extinguishment of debt	1,020			—

Deferred income taxes							Deferred income taxes	(32,308)		20,581
Other	14,706			1,396			Other	4,354		2,628
Changes in operating assets and liabilities	(145,124		)	(35,205		)	Changes in operating assets and liabilities	27,949		(63,559)
Net cash provided by operating activities	104,550			182,045
Net cash (used in) provided by operating activities							Net cash (used in) provided by operating activities	(26,532)		29,907
Investing activities:							Investing activities:
Capital expenditures	(137,446		)	(116,788		)	Capital expenditures	(73,407)		(131,085)

Acquisition of businesses, net of cash acquired	(478		)	(37,478		)	Acquisition of businesses, net of cash acquired	0		(452)
Cash from consolidation of joint venture	—			3,395

Proceeds from sale of business, net of cash divested							Proceeds from sale of business, net of cash divested	(17,006)		243,362
Proceeds from sale of fixed assets and other	1,236			156			Proceeds from sale of fixed assets and other	963		2,084
Net cash used in investing activities	(136,688		)	(150,715		)
Net cash (used in) provided by investing activities							Net cash (used in) provided by investing activities	(89,450)		113,909
Financing activities:							Financing activities:
Proceeds from issuance of long-term debt, net of discount							Proceeds from issuance of long-term debt, net of discount	245,000		0
Principal payments on long-term debt	(15,616		)	(9,787		)	Principal payments on long-term debt	(4,792)		(3,556)
Increase in short-term debt, net	6,070			1,703
Decrease in short-term debt, net							Decrease in short-term debt, net	(6,897)		(32,737)

Debt issuance costs							Debt issuance costs	(6,722)		0
Purchase of noncontrolling interests							Purchase of noncontrolling interests	0		(4,797)
Repurchase of common stock	(30,680		)	(23,800		)	Repurchase of common stock	0		(36,550)
Proceeds from exercise of warrants	836			2,498
Taxes withheld and paid on employees' share based payment awards	(11,949		)	(11,979		)

Taxes withheld and paid on employees' share-based payment awards							Taxes withheld and paid on employees' share-based payment awards	(533)		(2,757)
Other	(795		)	101			Other	(925)		2,132
Net cash used in financing activities	(52,134		)	(41,264		)
Effects of exchange rate changes on cash and cash equivalents	(22,836		)	(7,880		)
Changes in cash and cash equivalents	(107,108		)	(17,814		)
Cash and cash equivalents at beginning of period	480,092			378,243
Cash and cash equivalents at end of period	$	372,984		$	360,429
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	225,131		(78,265)
Effects of exchange rate changes on cash, cash equivalents and restricted cash							Effects of exchange rate changes on cash, cash equivalents and restricted cash	(5,718)		(6,997)
Changes in cash, cash equivalents and restricted cash							Changes in cash, cash equivalents and restricted cash	103,431		58,554

Cash, cash equivalents and restricted cash at beginning of period							Cash, cash equivalents and restricted cash at beginning of period	361,742		267,399
Cash, cash equivalents and restricted cash at end of period							Cash, cash equivalents and restricted cash at end of period	$	465,173	$	325,953

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:							Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
								Balance as of
								September 30, 2020		December 31, 2019
Cash and cash equivalents							Cash and cash equivalents	$	462,666	$	359,536
Restricted cash included in other current assets							Restricted cash included in other current assets	11		12
Restricted cash included in other assets							Restricted cash included in other assets	2,496		2,194
Total cash, cash equivalents and restricted cash shown in the statement of cash flows							Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	465,173	$	361,742

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

1. Overview

Basis of Presentation

Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries, the “Company” or “Cooper Standard”), through its wholly-owned subsidiary, Cooper-Standard Automotive Inc. (“CSA U.S.”), is a leading manufacturer of sealing, fuel and brake delivery, and fluid transfer ~~and anti-vibration~~ systems. The Company’s products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (“OEMs”) and replacement markets. The Company conducts substantially all of its activities through its subsidiaries.

During the first quarter of 2019 and in prior periods, the Company also operated an anti-vibration systems (“AVS”) product line. On April 1, 2019, the Company completed the divestiture of its AVS product line.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 (the ~~“2016~~“2019 Annual Report”), as filed with the SEC. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These financial statements include all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company. The operating results for the interim period ended September 30, ~~2017~~2020 are not necessarily indicative of results for the full year. 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.

~~Recently Adopted Accounting Pronouncements~~Immaterial Correction of Errors

InDuring the ~~first quarter of 2017,~~year ended December 31, 2019, the Company ~~adopted Accounting Standards Update (“ASU”) 2015-11,~~ ~~Inventory (Topic 330): Simplifying~~identified errors primarily related to periods prior to fiscal year 2019. The Company concluded these errors were not material individually or in the ~~Measurement~~aggregate to any of ~~Inventory.~~ ~~This ASU amended~~ the ~~guidelines for the measurement~~previously reported periods and, therefore, amendments of ~~inventory from lower of cost or market~~previously filed reports were not required. Corrections were made to the ~~lower~~applicable prior periods reflected in the financial information herein.

The following table presents the impact of ~~cost and net realizable value. This new guidance has been adopted prospectively and had an immaterial impact~~these corrections on the Company’s condensed consolidated ~~financial statements.~~statements of operations:

~~Recently Issued Accounting Pronouncements~~


	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	As previously reported		Adjustment		As corrected		As previously reported		Adjustment		As corrected
Sales	$	729,021	$	10,497	$	739,518	$	2,373,865	$	8,346	$	2,382,211



Income tax expense (benefit)	(574)		1,319		745		45,996		1,005		47,001

Net loss attributable to noncontrolling interests	1,745		(202)		1,543		2,447		(411)		2,036
Net income (loss) attributable to Cooper-Standard Holdings Inc.	(13,853)		8,976		(4,877)		127,983		6,930		134,913

Earnings (loss) per share:
Basic	$	(0.82)	$	0.53	$	(0.29)	$	7.42	$	0.41	$	7.83
Diluted	$	(0.82)	$	0.53	$	(0.29)	$	7.40	$	0.40	$	7.80

~~In August 2017,~~The following table presents the ~~Financial Accounting Standards Board (“FASB”) issued ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.~~ ~~This guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value~~impact of a hedging instrument to be presented in the same income statement line as the hedged item. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The adoption of this ASU is not expected to have a material impactthese corrections on the Company’s condensed consolidated ~~financial statements.~~statements of comprehensive income (loss):

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting~~. This guidance clarifies that modification accounting is required only if there is a change in the fair value, vesting conditions, or classification (as equity or liability) of a share-based payment award due to changes in the terms or conditions. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.


	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
	As previously reported		Adjustment		As corrected		As previously reported		Adjustment		As corrected


Currency translation adjustment	$	(29,513)	$	448	$	(29,065)	$	(33,407)	$	484	$	(32,923)


Comprehensive loss attributable to noncontrolling interests	2,606		(248)		2,358		3,558		(451)		3,107
Comprehensive income (loss) attributable to Cooper-Standard Holdings Inc.	(41,817)		9,378		(32,439)		96,896		7,374		104,270

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~. This guidance requires the service cost component of net periodic benefit cost to be recorded in the same income statement line item as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost must be presented separately outside of operating income. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. This guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. This guidance is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash. This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should now be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shownThe impact of these corrections on the ~~statement~~balance as of ~~cash flows. This guidance is effective for annual~~September 30, 2019 in the Company’s condensed consolidated statements of changes in equity includes a decrease to total equity of $202, which consists of an increase to retained earnings of $120, a decrease to accumulated other comprehensive loss of $595, and ~~interim reporting periods beginning after December 15, 2017. Early adoption is permitted. The adoption~~a decrease to noncontrolling interests of ~~this ASU is not expected to have a material~~$917.

For the nine months ended September 30, 2019, the impact of these corrections on the ~~Company’s~~condensed consolidated ~~statement of cash flows.~~

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory~~. This guidance will require companies to recognize the income tax effects of intercompany sales and transfers of assets other than inventory in the period in which the transfer occurs. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and should be applied on a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.~~ The amendments provide guidance on eight specific cash flow issues, thereby reducing diversity in practice. The amendments are effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted. An entity that elects early adoption must adopt all of the amendments in the same period. The guidance requires companies to use a retrospective transition method upon adoption. The Company’s current accounting practices are consistent with the issues addressed by this guidance. Therefore, this guidance is not expected to have a material impact on the Company’s consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. The guidance revises existing U.S. GAAP by requiring lessees to recognize right-of-use assets and lease liabilities for all leases (except for short-term leases). The standard also requires additional disclosures to help financial statement users better understand the amount, timing and uncertaintystatements of cash flows arising from lease transactions. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018. A modified retrospective transition approach is required with certain practical expedients available. The Company continues to performincluded a ~~comprehensive evaluation on the impacts of adopting this standard and plans on adopting this ASU effective January 1, 2019. The Company believes this standard will primarily result in an~~$7,341 increase in ~~the~~net income, a $1,005 increase in deferred income taxes, and a $8,346 decrease in changes in operating assets and liabilities, ~~on its consolidated balance sheet and will not have a material~~resulting in no impact ~~on its consolidated income statement.~~to net cash provided by operating activities.

~~In May 2014, the FASB issued~~

2. New Accounting Pronouncements

Recently Issued Accounting Pronouncements

ASU ~~2014-09,~~ ~~Revenue from Contracts with Customers~~2016-13, Financial Instruments — Credit Losses (Topic ~~606)~~. The guidance prescribes a single, common revenue standard that replaces most existing revenue recognition guidance in U.S. GAAP. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded revenue disclosures.326)

Several ASUs addressing revenue recognition have been issued since the issuance of ASU 2014-09. These ASUs, which modify certain sections of ASU 2014-09, are intended to promote a more consistent interpretation and application of the principles outlined in the standard. The Company will adopt the guidance effectiveOn January 1, ~~2018,~~2020, the ~~standard’s effective date,~~Company adopted Accounting Standards Codification (“ASC”) 326, Financial Instruments – Credit Losses, and all related amendments using the modified retrospective ~~method. Under this~~ method whereby the cumulative effect of adopting the standard iswas recognized in equity at the date of initial application.

~~To assess~~ Comparative information has not been restated and continues to be reported under the ~~impact~~accounting standards in effect for those periods. The most prominent among the changes in the standard is the consideration of losses not yet incurred, but expected, based on current conditions and future forecasts. Adoption of the new standard resulted in an immaterial increase in the ~~Company developed a comprehensive project plan. This project plan includes analyzing~~allowance for credit losses, which decreased the ~~standard’s impact~~tooling receivable on ~~customer contracts across~~ the Company’s ~~business segments, comparing its historical accounting policies and practices~~condensed consolidated balance sheet in 2020. The increase in credit loss expense was recorded as an adjustment to the ~~requirements~~opening balance of retained earnings. Adoption of the new standard ~~and identifying potential differences from applying~~had no impact on the ~~new standard’s requirements.~~ Company’s condensed consolidated statement of operations or on cash provided by (used in) operating, financing or investing activities on its condensed consolidated cash flow statements.

The cumulative effects of the changes made to the Company’s condensed consolidated balance sheet as of January 1, 2020 were as follows:


	Balance as of December 31, 2019		Adjustments due to adoption of ASC 326		Balance as of January 1, 2020

Tooling receivable, net	$	148,175	$	(1,573)	$	146,602
Retained earnings	619,448		(1,573)		617,875

The Company ~~has substantially completed its assessment and does not expect that adopting~~considered the ~~new standard~~issued accounting pronouncement summarized as follows, which will have ~~a material~~an immaterial impact on its consolidated financial statements. As a result, it expects to recognize substantially all of its revenue at a point in time, generally when products are either shipped or delivered. The Company will finalize its evaluation of the effect on its consolidated financial statements duringstatements:


Standard	Description	Impact	Effective Date
ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans	Modifies the disclosure requirements for ASC Topic 715 by removing and modifying existing disclosure requirements while also adding new disclosures.	The Company expects this standard will primarily result in additional pension disclosures while also removing certain other disclosures. Specifically, the weighted-average interest crediting rate for the cash balance plan and, if needed, an explanation for significant gains and losses related to changes in the benefit obligation for the period will be added while accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year and the effects of a one-percentage-point change in the assumed health care cost trend rate will be removed.	January 1, 2021

3. Divestitures

2020 Divestiture

In the fourth quarter of ~~2017.~~2019, management approved a plan to sell its European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations. The entities and the associated assets and liabilities met the criteria for presentation as held for sale as of March 31, 2020, and depreciation of long-lived assets ceased. The divestiture did not meet the criteria for presentation as a discontinued operation.

The Company has completed its evaluation of pre-production costs related to long-term supply arrangements, such as reimbursable tooling, and expects to continue accounting for pre-production costs in accordance with existing guidance. In addition, the Company’s internal control framework is not expected to significantly change. Instead, existing internal controls will be modified and augmented, as necessary. While implementing the new standard, the Company will continue to monitor FASB activities and interpretations of various non-authoritative industry groups for any possible impact on the Company’s findings.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Upon meeting the criteria for held for sale classification, the Company recorded non-cash impairment charges of $86,470 during the six months ended June 30, 2020 to reduce the carrying value of the held for sale entities to fair value less costs to sell. Fair value, which is categorized within Level 3 of the fair value hierarchy, was determined using a market approach, estimated based on expected proceeds. The fair value less costs to sell were assessed each reporting period that the asset group remained classified as held for sale. The difference between the impairment of the carrying value on the divested assets compared to the impairment recorded in the statements of operations is due to foreign currency translation offset by costs to sell incurred in the second quarter. The impairment charge includes the non-cash cumulative foreign currency translation losses recorded in equity related to the divested entities.

~~2. Acquisitions~~On July 1, 2020, the Company completed the divestiture of its European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations, to Mutares SE & Co. KGaA (“Mutares”). The transaction included payment denominated in Euro of €9,000, which consisted of €6,500 in cash paid and €2,500 in deferred payment obligations, payable in December 2021.

~~AMI Acquisition~~Upon finalizing the sale, the Company recorded a loss on deconsolidation of the businesses of $167. In addition, at closing, the Company and Mutares entered into certain ancillary agreements providing for the transition of the European rubber fluid transfer and specialty sealing businesses and Indian operations.

The major classes of assets and liabilities divested were as follows:


	July 1, 2020
Cash and cash equivalents	$	11,162
Accounts receivable, net	18,825
Tooling receivable, net	4,770
Inventories	17,022
Prepaid expenses	2,728
Other current assets	8,873
Property, plant and equipment, net	39,913
Operating lease right-of-use assets, net	2,946
Intangible assets, net	4,992
Other assets	4,114
Impairment of carrying value	(85,622)
Total assets divested	$	29,723

Accounts payable	$	13,219
Payroll liabilities	7,135
Accrued liabilities	5,744
Current operating lease liabilities	918
Pension benefits	3,574
Postretirement benefits other than pensions	2,778
Long-term operating lease liabilities	2,286
Other liabilities	1,934
Total liabilities divested	$	37,588

2020 Joint Venture Deconsolidation

In ~~2016,~~the third quarter of 2020, management approved and completed a plan to sell the Company’s entire controlling equity interest of a joint venture in the Asia Pacific region. Upon finalizing the sale, the Company ~~acquired~~recorded a gain on deconsolidation of the ~~North American fuel and brake~~ business of ~~AMI Industries (the “AMI Business”) for cash consideration~~$1,334.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

2019 Divestiture

During the first quarter of ~~$32,000 (the “AMI Acquisition”). This acquisition directly aligns with~~2019 and in prior periods, the ~~Company’s growth strategy by expanding~~Company also operated an AVS product line. On April 1, 2019, the ~~Company’s fuel and brake business. The results of operations~~Company completed its sale of the ~~AMI Business are included~~AVS product line to Continental AG. The total sale price of the transaction was $265,500, subject to certain adjustments. Cash proceeds received in the Company’s condensed consolidated financial statements from the date of acquisition, August 15, 2016, and reported within the North America segment. This acquisition was accounted for as a business combination, resulting in the recognition of intangible assets of $19,410 and goodwill of $7,175 in 2016. In the second quarter of ~~2017,~~2019 were $243,362 after adjusting for certain liabilities assumed by the purchaser. The Company ~~agreed to purchase~~recognized a gain on the ~~China fuel and brake business~~divestiture of ~~AMI Industries, which is subject to regulatory approval.~~

~~Other Acquisitions~~

~~In 2016, the Company acquired a business in furtherance of the Company’s China operations. The total purchase price of the acquisition was $5,478, of which $3,020 was paid~~$188,180 during the ~~first quarter of 2016 and $2,458 was paid in~~nine months ended September 30, 2019. In the third quarter of ~~2016.~~2020, the Company finalized adjustments to the gain recorded in 2019 by recording an additional gain on divestiture of $1,147, primarily due to working capital adjustments.

4. Revenue

Revenue is recognized for manufactured parts at a point in time, generally when products are shipped or delivered. The Company ~~recognized $2,972~~usually enters into agreements with customers to produce products at the beginning of ~~goodwill~~a vehicle’s life. Blanket purchase orders received from customers and related documents generally establish the annual terms, including pricing, related to a vehicle model. Customers typically pay for parts based on customary business practices with payment terms generally between 30 and 90 days.

Revenue by customer group for the three months ended September 30, 2020 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	350,016	$	141,754	$	129,822	$	17,558	$	0	$	639,150
Commercial	3,179		4,066		1,190		6		911		9,352
Other	5,812		209		51		16		28,610		34,698
Revenue	$	359,007	$	146,029	$	131,063	$	17,580	$	29,521	$	683,200

Revenue by customer group for the nine months ended September 30, 2020 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	796,937	$	383,288	$	312,871	$	41,878	$	0	$	1,534,974
Commercial	8,328		12,846		3,149		16		2,868		27,207
Other	14,880		13,942		113		38		87,403		116,376
Revenue	$	820,145	$	410,076	$	316,133	$	41,932	$	90,271	$	1,678,557

Revenue by customer group for the three months ended September 30, 2019 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	361,244	$	173,868	$	123,121	$	25,179	$	0	$	683,412
Commercial	3,923		6,305		0		9		178		10,415
Other	6,937		7,265		18		32		31,439		45,691
Revenue	$	372,104	$	187,438	$	123,139	$	25,220	$	31,617	$	739,518

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in ~~2016~~thousands except per share and share amounts)

Revenue by customer group for the nine months ended September 30, 2019 was as ~~a result~~follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	1,167,062	$	588,473	$	366,877	$	73,399	$	5	$	2,195,816
Commercial	15,154		22,602		17		92		1,213		39,078
Other	16,727		23,792		192		90		106,516		147,317
Revenue	$	1,198,943	$	634,867	$	367,086	$	73,581	$	107,734	$	2,382,211

The passenger and light duty group consists of ~~this acquisition.~~sales to automotive OEMs and automotive suppliers, while the commercial group represents sales to OEMs of on- and off-highway commercial equipment and vehicles. The other customer group includes sales related to specialty and adjacent markets.

Also in 2016, the Company obtained control of its 51%-owned joint venture, Shenya Sealing (Guangzhou) Company Limited (“Guangzhou”) through an amendment of the joint venture governing document. This joint venture was previously accounted for as an investment under the equity method. The results of operations of Guangzhou are included in the Company’s consolidated financial statements from the date of consolidation, August 4, 2016, and reported within the Asia Pacific segment. Business combination accounting was completed, resulting in the recognition of intangible assets of $6,605 and goodwill of $9,741 in 2016. There was no gain or loss recognized on the remeasurementSubstantially all of the Company’s ~~equity method investment~~revenues were generated from sealing, fuel and brake delivery and fluid transfer systems for use in ~~Guangzhou.~~passenger vehicles and light trucks manufactured by global OEMs and, until March 31, 2019, anti-vibrations systems. On April 1, 2019, the Company completed the divestiture of its AVS product line.

A summary of the Company’s products is as follows:


Product Line						Description
Sealing Systems						Protect vehicle interiors from weather, dust and noise intrusion for improved driving experience; provide aesthetic and functional class-A exterior surface treatment
Fuel & Brake Delivery Systems						Sense, deliver and control fluids to fuel and brake systems
Fluid Transfer Systems						Sense, deliver and control fluids and vapors for optimal powertrain & HVAC operation
Anti-Vibration Systems (Divested on April 1, 2019)						Control and isolate vibration and noise in the vehicle to improve ride and handling

Revenue by product line for the three months ended September 30, 2020 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	138,823	$	116,640	$	82,754	$	11,045	$	0	$	349,262
Fuel and brake delivery systems	118,997		25,218		29,877		5,134		0		179,226
Fluid transfer systems	101,187		4,171		18,432		1,401		0		125,191
Other	0		0		0		0		29,521		29,521
Consolidated	$	359,007	$	146,029	$	131,063	$	17,580	$	29,521	$	683,200

Revenue by product line for the nine months ended September 30, 2020 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	312,331	$	297,216	$	201,295	$	27,385	$	0	$	838,227
Fuel and brake delivery systems	266,203		65,078		75,061		11,707		0		418,049
Fluid transfer systems	241,611		35,673		39,777		2,840		0		319,901
Other	0		12,109		0		0		90,271		102,380
Consolidated	$	820,145	$	410,076	$	316,133	$	41,932	$	90,271	$	1,678,557

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Revenue by product line for the three months ended September 30, 2019 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	138,741	$	130,737	$	82,078	$	18,599	$	0	$	370,155
Fuel and brake delivery systems	120,425		29,401		28,440		6,349		0		184,615
Fluid transfer systems	112,938		20,334		12,621		272		0		146,165
Other	0		6,966		0		0		31,617		38,583
Consolidated	$	372,104	$	187,438	$	123,139	$	25,220	$	31,617	$	739,518

Revenue by product line for the nine months ended September 30, 2019 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	425,146	$	430,116	$	243,860	$	55,445	$	0	$	1,154,567
Fuel and brake delivery systems	376,107		95,722		79,917		17,728		0		569,474
Fluid transfer systems	340,767		64,646		41,845		408		0		447,666
Anti-vibration systems	56,457		20,807		1,464		0		0		78,728
Other	466		23,576		0		0		107,734		131,776
Consolidated	$	1,198,943	$	634,867	$	367,086	$	73,581	$	107,734	$	2,382,211

Contract Estimates

The amount of revenue recognized is usually based on the purchase order price and adjusted for variable consideration, including pricing concessions. The Company accrues for pricing concessions by reducing revenue as products are shipped or delivered. The accruals are based on historical experience, anticipated performance and management’s best judgment. The Company also generally has ongoing adjustments to customer pricing arrangements based on the content and cost of its products. Such pricing accruals are adjusted as they are settled with customers. Customer returns are usually related to quality or shipment issues and are recorded as a reduction of revenue. The Company generally does not recognize significant return obligations due to their infrequent nature.

Contract Balances

The Company’s contract assets consist of unbilled amounts associated with variable pricing arrangements in its Asia Pacific region. Once pricing is finalized, contract assets are transferred to accounts receivable. As a result, the timing of revenue recognition and billings, as well as changes in foreign exchange rates, will impact contract assets on an ongoing basis. Contract assets were not materially impacted by any other factors during the nine months ended September 30, 2020.

The Company’s contract liabilities consist of advance payments received and due from customers. Net contract assets (liabilities) consisted of the following:


	September 30, 2020		December 31, 2019		Change
Contract assets	$	281	$	1,100	$	(819)
Contract liabilities	(31)		(61)		30
Net contract assets	$	250	$	1,039	$	(789)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Other

The Company, at times, enters into agreements that provide for lump sum payments to customers. These payment agreements are recorded as a reduction of revenue during the period the commitment is made. Amounts related to commitments of future payments to customers on the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 were current liabilities of $8,352 and $12,916, respectively, and long-term liabilities of $6,724 and $9,502, respectively.

The Company provides assurance-type warranties to its customers. Such warranties provide customers with assurance that the related product will function as intended and complies with any agreed-upon specifications, and are recognized in costs of products sold.

5. Restructuring

On an ongoing basis, the Company evaluates its business and objectives to ensure that it is properly configured and sized based on changing market conditions. Accordingly, the Company has implemented several restructuring initiatives, including closure or consolidation of facilities throughout the world and the reorganization of its operating structure.

In January 2015, the Company announced its intention to further restructure its European manufacturing footprint based on anticipated market demands. The total estimated cost of this initiative, which is expected to be substantially completed by the end of 2017, is approximately $120,000 to $125,000, of which approximately $107,000 has been incurred to date. We expect to incur total employee separation costs of approximately $63,000 to $66,000, other related exit costs of approximately $56,000 to $58,000 and non-cash asset impairments related to restructuring activities of approximately $500.

The Company’s restructuring charges consist of severance, retention and outplacement services, and severance-related postemployment benefits (collectively, “employee separation costs”), other related exit costs and asset impairments related to restructuring activities. Employee separation costs are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy.

Restructuring expense by segment for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America	$	3,721	$	863	$	10,468	$	6,857
Europe	1,720		3,340		7,019		13,395
Asia Pacific	552		902		3,264		4,476
South America	316		9		2,367		35
Total Automotive	6,309		5,114		23,118		24,763
Corporate and other	(123)		458		118		4,451
Total	$	6,186	$	5,572	$	23,236	$	29,214

Restructuring activity for the nine months ended September 30, 2020 was as follows:


	Employee Separation Costs		Other Exit Costs		Total
Balance as of December 31, 2019	$	22,990	$	4,005	$	26,995
Expense	12,325		10,911		23,236
Cash payments	(17,132)		(9,751)		(26,883)
Non-cash fixed asset impairments included in expense	0		(1,748)		(1,748)
Foreign exchange translation and other	(1,192)		263		(929)
Balance as of September 30, 2020	$	16,991	$	3,680	$	20,671

6. Inventories

Inventories consist of the following:


	September 30, 2020		December 31, 2019
Finished goods	$	41,587	$	57,070
Work in process	38,366		33,753
Raw materials and supplies	68,847		52,616
	$	148,800	$	143,439

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
North America $ 2,503
$ 306
$ 3,320
$ 1,661
Europe 6,236
9,691
22,341
30,184
Asia Pacific 1,170
433
2,559
1,623
Total $ 9,909
$ 10,430
$ 28,220
$ 33,468

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

7. Leases

~~Restructuring activity~~The Company primarily has operating and finance leases for certain manufacturing facilities, corporate offices and certain equipment. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities on the ~~nine months ended~~Company’s condensed consolidated balance sheet as of September 30, ~~2017~~2020. Finance leases are included in property, plant and equipment, net, debt payable within one year, and long-term debt on the Company’s condensed consolidated balance sheets.

The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease expense	$	8,065	$	8,362	$	24,484	$	25,027
Short-term lease expense	1,040		796		3,115		2,607
Variable lease expense	273		517		678		1,051
Finance lease expense:
Amortization of right-of-use assets	598		614		1,950		1,629
Interest on lease liabilities	384		400		1,169		1,307
Total lease expense	$	10,360	$	10,689	$	31,396	$	31,621

Other information related to leases was as follows:


	Nine Months Ended September 30,
	2020			2019
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	23,038		$	25,671
Operating cash flows for finance leases	1,188			1,186
Financing cash flows for finance leases	1,578			735
Non-cash right-of-use assets obtained in exchange for lease obligations:
Operating leases	47,176			4,955
Finance leases	549			9,476

Weighted Average Remaining Lease Term (in years)
Operating leases	8.1			5.5
Finance leases	10.7			11.7

Weighted Average Discount Rate
Operating leases	5.4		%	4.7		%
Finance leases	5.7		%	9.7		%

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Employee Separation Costs Other Exit Costs Total
Balance as of December 31, 2016 $ 21,927
$ 2,311
$ 24,238
Expense 14,991
13,229
28,220
Cash payments (22,224 ) (11,811 ) (34,035 )
Foreign exchange translation and other 1,769
450
2,219
Balance as of September 30, 2017 $ 16,463
$ 4,179
$ 20,642
Future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows:


Year	Operating Leases		Finance Leases
Remainder of 2020	$	7,340	$	872
2021	24,909		3,472
2022	20,160		3,211
2023	16,508		3,122
2024	13,171		3,400
Thereafter	60,979		24,861
Total future minimum lease payments	143,067		38,938
Less imputed interest	(29,793)		(10,594)
Total	$	113,274	$	28,344

~~4. Inventories~~Amounts recognized on the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 were as follows:

~~Inventories consist~~


	September 30, 2020	December 31, 2019
Operating Leases

Operating lease right-of-use assets, net	111,831	83,376
Current operating lease liabilities	21,492	24,094

Long-term operating lease liabilities	91,782	60,234

Finance Leases
Debt payable within one year	2,295	2,343
Long-term debt	26,049	27,430

As of September 30, 2020 and December 31, 2019, assets recorded under finance leases, net of accumulated depreciation were $30,558 and $32,571, respectively. As of September 30, 2020, the ~~following:~~Company had additional operating leases, primarily for real estate, that have not yet commenced with undiscounted lease payments of approximately $547. These operating leases will commence between 2020 and 2021 with lease terms up to three years.

September 30, 2017 December 31, 2016
Finished goods $ 48,596
$ 43,511
Work in process 39,499
32,839
Raw materials and supplies 91,375
70,099
$ 179,470
$ 146,449

5.8. Property, Plant and Equipment

Property, plant and equipment consists of the following:


	September 30, 2020		December 31, 2019
Land and improvements	$	59,137	$	66,670
Buildings and improvements	297,768		310,797
Machinery and equipment	1,255,056		1,204,457
Construction in progress	91,201		161,951
	1,703,162		1,743,875
Accumulated depreciation	(820,686)		(755,598)
Property, plant and equipment, net	$	882,476	$	988,277

September 30, 2017 December 31, 2016
Land and improvements $ 72,737
$ 71,002
Buildings and improvements 293,257
265,824
Machinery and equipment 998,643
864,337
Construction in progress 184,991
153,924
1,549,628
1,355,087
Accumulated depreciation (633,132 ) (522,818 )
Property, plant and equipment, net $ 916,496
$ 832,269

~~Impairment of Long-Lived Assets~~

~~Due to the Company’s decision to divest two of its inactive European sites, the~~The Company recorded impairment charges of ~~$4,270 in~~$100 and $1,240 during the three and nine months ended September 30, 2020, respectively.

Based on the Company’s interim impairment assessment, the Company determined there were no additional indicators of impairment identified during the nine months ended September 30, ~~2017. Fair~~2020. The Company continues to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for products and the impact on the Company’s business and overall financial performance. A lack of recovery or further deterioration in market conditions and

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

production volumes, among other factors, as a result of the COVID-19 pandemic could result in an impairment charge in future periods.

During the three months ended September 30, 2019, the Company recorded an impairment charge related to machinery and equipment of $1,958 due to the termination of certain customer programs in the Asia Pacific region. The fair value of machinery and equipment was determined using estimated salvage value, which was deemed the highest and best use of the assets. Impairment charges of $4,146 recorded during the nine months ended September 30, 2019 also included an impairment charge recorded in the second quarter related to machinery and equipment in certain Asia Pacific locations. The fair value was determined ~~based on current real estate market conditions.~~using estimated orderly liquidation value, which was deemed the highest and best use of the assets.

6.9. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by ~~reportable operating segment~~reporting unit for the nine months ended September 30, ~~2017~~2020 were as follows:


	North America		Industrial Specialty Group		Total
Balance as of December 31, 2019	$	142,187	$	0	$	142,187
Reorganization	(14,036)		14,036		0

Foreign exchange translation	(108)		0		(108)
Balance as of September 30, 2020	$	128,043	$	14,036	$	142,079

North America Europe Asia Pacific Total
Balance as of December 31, 2016 $ 121,996
$ 10,753
$ 34,692
$ 167,441
Acquisition —
236
—
236
Foreign exchange translation 240
1,259
1,589
3,088
Balance as of September 30, 2017 $ 122,236
$ 12,248
$ 36,281
$ 170,765
The Company’s organizational structure changed on January 1, 2020. See Note 22. “Segment Reporting” for further detail on this reorganization of the Company’s business. Prior to this reorganization, the Company’s North America operating segment was the only reporting unit in which goodwill was recorded. As a result of the reorganization, a portion of the goodwill that was previously attributable to the North America reporting unit was reallocated to the Industrial Specialty Group reporting unit based on the relative fair value approach. The Industrial Specialty Group reporting unit is a component of the Advanced Technology Group operating segment, which is reflected in “Corporate, eliminations and other”.

The reorganization of the business represented a triggering event to test goodwill for impairment as of January 1, 2020. No impairment was identified as a result of completing the goodwill impairment test.

Goodwill is tested for impairment by reporting unit annually or more frequently if events or circumstances indicate that an impairment may exist. ~~There~~Other than the reorganization event noted above, there were no other indicators of potential impairment during the nine months ended September 30, ~~2017.~~2020. The Company continues to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for products and the impact on the Company’s business and overall financial performance. A lack of recovery or further deterioration in market conditions and production volumes, among other factors, as a result of the COVID-19 pandemic could result in an impairment charge in future periods.

Intangible Assets

Intangible assets and accumulated amortization balances as of September 30, 2020 and December 31, 2019 were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	154,903	$	(120,252)	$	34,651
Other	44,082		(9,043)		35,039
Balance as of September 30, 2020	$	198,985	$	(129,295)	$	69,690

Customer relationships	$	156,557	$	(113,871)	$	42,686
Other	49,556		(7,873)		41,683
Balance as of December 31, 2019	$	206,113	$	(121,744)	$	84,369

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~Intangible Assets~~

~~Intangible assets and accumulated amortization balances as of September 30, 2017 and December 31, 2016 were as follows:~~

Gross
Carrying
Amount

Accumulated
Amortization

Net
Carrying
Amount
Customer relationships $ 135,680
$ (83,044 ) $ 52,636
Developed technology 9,144
(9,053 ) 91
Other 21,863
(2,530 ) 19,333
Balance as of September 30, 2017 $ 166,687
$ (94,627 ) $ 72,060

Customer relationships $ 134,918
$ (73,088 ) $ 61,830
Developed technology 8,762
(8,386 ) 376
Other 20,965
(1,808 ) 19,157
Balance as of December 31, 2016 $ 164,645
$ (83,282 ) $ 81,363

7.10. Debt

A summary of outstanding debt as of September 30, ~~2017~~2020 and December 31, ~~2016 was~~2019 is as follows:


	September 30, 2020		December 31, 2019
Senior Notes	$	395,650	$	395,114
Senior Secured Notes	239,142		0
Term Loan	324,242		326,061
ABL Facility	0		0
Finance leases	28,344		29,773
Other borrowings	49,575		56,680
Total debt	1,036,953		807,628
Less current portion	(54,294)		(61,449)
Total long-term debt	$	982,659	$	746,179

September 30, 2017 December 31, 2016
Senior Notes $ 393,505
$ 393,060
Term Loan 331,382
332,827
Other borrowings 30,118
37,032
Total debt 755,005
762,919
Less current portion (32,448 ) (33,439 )
Total long-term debt $ 722,557
$ 729,480

5.625% Senior Notes due 2026

In November 2016, the Company issued $400,000 aggregate principal amount of its 5.625% Senior Notes due 2026 (the “Senior Notes”). The Senior Notes mature on November 15, 2026. Interest on the Senior Notes is payable semi-annually in arrears in cash on May 15 and November 15 of each ~~year, commencing on May 15, 2017.~~year.

Debt issuance costs related to the Senior Notes are amortized into interest expense over the term of the Senior Notes. As of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company ~~has $6,495~~had $4,350 and ~~$6,940~~$4,886 of unamortized debt issuance costs, respectively, related to the Senior Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets.

13.0% Senior Secured Notes due 2024

On May 29, 2020, Cooper Standard Automotive Inc. (the “Issuer”), a wholly-owned subsidiary of the Company, issued $250,000 aggregate principal amount of its 13.0% Senior Secured Notes due 2024 (the “Senior Secured Notes”), pursuant to the Indenture, dated as of May 29, 2020 (the “Indenture”), by and among the Issuer, the other guarantors party thereto and U.S. Bank National Association, as trustee, in a transaction exempt from registration under Rule 144A and Regulation S of the Securities Act of 1933. Proceeds from the Senior Secured Notes were used to provide additional liquidity for the Company.

The Senior Secured Notes are guaranteed on a senior secured basis by CS Intermediate HoldCo 1 LLC and each of the Issuer’s present and future subsidiaries that are obligors or guarantee the Term Loan Facility and each of the Issuer’s wholly owned domestic subsidiaries that are obligors under, or guarantee, certain other indebtedness, subject to certain exceptions. The notes are also guaranteed on a senior unsecured basis by Cooper-Standard Latin America B.V.

The Issuer may redeem all or part of the Senior Secured Notes prior to maturity at the prices set forth in the Indenture. The Senior Secured Notes mature on June 1, 2024. Interest on the Senior Secured Notes is payable semi-annually in arrears in cash on June 1 and December 1 of each year, commencing on December 1, 2020.

The Indenture contains certain covenants that limit the Issuer’s and its subsidiaries’ ability to, among other things, incur or guarantee additional indebtedness or issue certain preferred stock; make restricted payments; sell assets; create or incur liens; and merge or consolidate with other entities. These covenants are subject to a number of important limitations and exceptions. The Indenture also provides for customary events of default for non-investment grade debt securities, which, if any occur, would permit or require the principal, interest and any other monetary obligations on all the then-outstanding Senior Secured Notes to be due and payable immediately.

The Company paid approximately $6,459 of debt issuance costs in connection with the transaction. Additionally, the Senior Secured Notes were issued at a discount of $5,000. As of September 30, 2020, the Company had $6,075 of unamortized debt issuance costs and $4,783 of unamortized original issue discount related to the Senior Secured Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Senior Secured Notes.

Term Loan Facility

~~Also in~~In November 2016, the Company entered into Amendment No. 1 to its senior term loan facility (“Term Loan Facility”), which provides for loans in an aggregate principal amount of $340,000. Subject to certain conditions, the Term Loan Facility, without the consent of the then-existing lenders (but subject to the receipt of commitments), may be expanded (or a new term loan or revolving facility added) by an amount that will not cause the consolidated secured net debt ratio to exceed 2.25 to 1.00 plus $400,000 plus any voluntary prepayments, including the senior asset-based revolving credit facility (“ABL Facility”) to the extent commitments are reduced, not funded from proceeds of long-term indebtedness. The Term Loan Facility matures on November 2, 2023, unless earlier terminated.

On May 2, 2017, the Company entered into Amendment No. 2 to the Term Loan Facility to modify the interest rate. Subsequently, on March 6, 2018, the Company entered

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

into Amendment No. 3 to the Term Loan Facility to further modify the interest rate. In accordance with this amendment, borrowings under the Term Loan Facility bear interest, at the Company’s option, at either (1) with respect to Eurodollar rate loans, the greater of the applicable Eurodollar rate and 0.75%, plus ~~2.25%~~2.0% per annum, or (2) with respect to base rate loans, the base rate, (which is the highest of the ~~then-current~~then current federal funds rate plus 0.5%, the prime rate most recently announced by the administrative agent under the term loan, and the one-month Eurodollar rate plus 1.0%), plus ~~1.25%~~1.0% per annum. ~~As a result of the amendment, the Company recognized a loss~~The Term Loan Facility matures on ~~refinancing and extinguishment of~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

~~debt of $1,020 in the second quarter of 2017, which was due to the partial write off of new and unamortized debt issuance costs and unamortized original issue discount.~~November 2, 2023, unless earlier terminated.

As of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company had ~~$3,689~~$1,828 and ~~$4,352~~$2,273 of unamortized debt issuance costs, respectively, and ~~$2,379~~$1,179 and ~~$2,821~~$1,466 of unamortized original issue discount, respectively, related to the Term Loan Facility, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Term Loan Facility.

ABL Facility

In November 2016, the Company entered into a ~~$210,000~~ Third Amended and Restated Loan Agreement of its ~~senior asset-based revolving credit facility (“ABL Facility”).~~

~~The~~ ABL Facility, ~~provides for~~which provided an aggregate revolving loan availability of up to $210,000, subject to borrowing base availability. In March 2020, the Company entered into the First Amendment of the Third Amended and Restated Loan Agreement (“the Amendment”). As a result of the Amendment, the senior asset-based revolving credit facility (“ABL Facility”) maturity was extended to March 2025 and the aggregate revolving loan availability ~~including~~was reduced to $180,000. The aggregate revolving loan availability includes a $100,000 letter of credit sub-facility and a $25,000 swing line sub-facility. The ABL Facility also provides for an uncommitted $100,000 incremental loan facility, for a potential total ABL Facility of ~~$310,000,~~$280,000, if requested by the borrowers under the ABL Facility and the lenders agree to fund such increase. No consent of any lender is required to effect any such increase, except for those participating in the increase.

As of September 30, ~~2017,~~2020, there were no ~~borrowings~~loans outstanding under the ABL ~~Facility, and subject to~~Facility. The Company’s borrowing base ~~availability,~~was $172,770. Net of the ~~Company had $197,074 in availability, less~~greater of 10% of the borrowing base or $15,000 that cannot be borrowed without triggering the fixed charge coverage ratio maintenance covenant and $5,339 of outstanding letters of credit, ~~of $8,542.~~the Company effectively had $150,154 available for borrowing under its ABL facility.

Any borrowings under ~~our~~the ABL Facility will mature, and the commitments of the lenders under ~~our~~the ABL Facility will terminate, on ~~November 2, 2021.~~the earlier of March 24, 2025 or the date 91 days prior to the maturity date of the Term Loan Facility (or another fixed asset facility replacing the Term Loan Facility).

As a result of the Amendment, the Company wrote off $177 in unamortized debt issuance costs, which are presented in interest expense, net of interest income in the condensed consolidated statements of operations. As of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company had ~~$1,440~~$1,215 and ~~$1,706,~~$657, respectively, of unamortized debt issuance costs related to the ABL Facility, which are presented in other assets in the condensed consolidated balance sheets.

Debt Covenants

The Company was in compliance with all covenants of the Senior Notes, Senior Secured Notes, Term Loan Facility and ABL Facility as of September 30, ~~2017.~~2020.

Other

Other borrowings as of September 30, 2020 and December 31, 2019 reflect borrowings under ~~capital leases,~~ local bank lines ~~and accounts receivable factoring sold with recourse~~ classified in debt payable within one year on the condensed consolidated balance ~~sheets.~~sheet.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

11. Fair Value Measurements and Financial Instruments

Fair Value Measurements

Fair value is defined as 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. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy is utilized, 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.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

Items Measured at Fair Value on a Recurring Basis

Estimates of the fair value of foreign currency ~~and interest rate~~ 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 assets and liabilities measured or disclosed at fair value on a recurring basis as of September 30, ~~2017~~2020 and December 31, ~~2016 was~~2019 were as follows:


	September 30, 2017			December 31, 2016			Input		September 30, 2020		December 31, 2019		Input
Forward foreign exchange contracts - other current assets	$	888		$	764		Level 2	Forward foreign exchange contracts - other current assets	$	153	$	467	Level 2
Forward foreign exchange contracts - accrued liabilities	(1,140		)	(535		)	Level 2	Forward foreign exchange contracts - accrued liabilities	(1,876)		(42)		Level 2
Interest rate swaps - accrued liabilities	(1,090		)	(2,458		)	Level 2
Interest rate swaps - other liabilities	—			(661		)	Level 2

Items Measured at Fair Value on a Nonrecurring 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 nonrecurring basis, which are not included in the table above. As these nonrecurring 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 nonrecurring basis see Note ~~2. “Acquisitions,” Note~~ 3. ~~“Restructuring”~~“Divestitures” and Note 5.8. “Property, Plant and Equipment.”

Items Not Carried Atat Fair Value

Fair values of the Company’s ~~debt instruments~~Senior Notes, Senior Secured Notes and Term Loan Facility were as follows:


	September 30, 2020		December 31, 2019
Aggregate fair value	$	806,890	$	693,600
Aggregate carrying value (1)	977,250		729,800

September 30, 2017 December 31, 2016
Aggregate fair value $ 746,746
$ 735,850
Aggregate carrying value ⁽¹⁾
737,450
740,000

⁽¹⁾ Excludes unamortized debt issuance costs and unamortized original issue discount.

Fair values were based on quoted market prices and are classified within Level 1 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

The Company is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Company enters into derivative instruments primarily to hedge portions of its forecasted foreign currency denominated cash flows and designates these derivative instruments as cash flow hedges in order to qualify for hedge accounting. ~~Gains or losses on derivative instruments resulting from hedge ineffectiveness are reported in earnings.~~

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 assets, other assets, accrued liabilities and other long-term liabilities. For a cash flow hedge, the effective portion of the change in fair value of the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) in the condensed consolidated balance sheet and reclassified into earnings when the underlying hedged transaction is realized. The realized gains and losses are recorded on the same line as the hedged transaction in the condensed consolidated statements of ~~net income.~~operations.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

The Company is exposed to credit risk in the event of nonperformance by its counterparties on its derivative financial instruments. The Company mitigates this credit risk exposure by entering into agreements directly with major financial institutions with high credit standards that are expected to fully satisfy their obligations under the contracts.

Cash Flow Hedges

Forward Foreign Exchange Contracts— - The Company uses forward contracts 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 principal currencies hedged by the Company include various European currencies, the Canadian Dollar, and the Mexican ~~Peso,~~Peso. As of September 30, 2020 and December 31, 2019, the notional amount of these contracts was $69,693 and $92,150, respectively, and consisted of hedges of transactions up to December 2021.

Pretax amounts related to the Company’s cash flow hedges that were recognized in other comprehensive income (loss) (“OCI”) were as follows:


	Gain (Loss) Recognized in OCI
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Forward foreign exchange contracts	$	1,051	$	(1,367)	$	(8,448)	$	2,443

Pretax amounts related to the Company’s cash flow hedges that were reclassified from AOCI and recognized in cost of products sold were as follows:


	Gain (Loss) Reclassified from AOCI to Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Forward foreign exchange contracts	$	(1,764)	$	614	$	(6,315)	$	1,766

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~the Brazilian Real. As of September 30, 2017, the notional amount of these contracts was $107,053 and consisted of hedges of transactions up to September 2018.~~

~~Interest rate swaps~~ - The Company uses interest rate swap transactions to manage cash flow variability associated with its variable rate Term Loan Facility. The interest rate swap contracts, which fix the interest payments of variable rate debt instruments, are used to manage exposure to fluctuations in interest rates. As of September 30, 2017, the notional amount of these contracts was $150,000, with maturities through September 2018. The fair market value of all outstanding interest rate swap contracts is subject to change due to fluctuations in interest rates.

~~Pretax amounts related to the Company’s cash flow hedges that were recognized in AOCI were as follows:~~

Gain (Loss) Recognized in AOCI
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Forward foreign exchange contracts $ (763 ) $ 854
$ 1,860
$ (3,384 )
Interest rate swaps 22
131
(27 ) (2,123 )
Total $ (741 ) $ 985
$ 1,833
$ (5,507 )

~~Pretax amounts related to the Company’s cash flow hedges that were reclassified from AOCI were as follows:~~

Gain (Loss) Reclassified from AOCI to Income (Effective Portion) Gain (Loss) Reclassified from AOCI to Income (Ineffective Portion)
Three Months Ended September 30,
Classification 2017 2016 2017 2016
Forward foreign exchange contracts Cost of products sold $ 915
$ (769 ) $ —
$ —
Interest rate swaps Interest expense, net of interest income (570 ) (803 ) 107
—
Total $ 345
$ (1,572 ) $ 107
$ —

Gain (Loss) Reclassified from AOCI to Income (Effective Portion) Gain (Loss) Reclassified from AOCI to Income (Ineffective Portion)
Nine Months Ended September 30,
Classification
2017 2016 2017 2016
Forward foreign exchange contracts Cost of products sold $ 2,371
$ (2,380 ) $ —
$ —
Interest rate swaps Interest expense, net of interest income (2,048 ) (2,393 ) 284
—
Total $ 323
$ (4,773 ) $ 284
$ —

~~The amount of losses to be reclassified from AOCI into income in the next twelve months related to the interest rate swap is expected to be approximately $1,090.~~

9.12. Accounts Receivable Factoring

As a part of its working capital management, the Company sells certain receivables through ~~third party~~a single third-party financial ~~institutions with and without recourse.~~institution in a pan-European program (the “Factor”). The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company. ~~The Company continues to service the receivables.~~ These are permitted transactions under the Company’s credit ~~agreement~~agreements governing the ABL Facility ~~the~~and Term Loan Facility and the indentures governing the Senior Notes and Senior Secured Notes. The European factoring facility, which was renewed in March 2020, allows the Company to factor up to €120 million of its Euro-denominated accounts receivable, accelerating access to cash and reducing credit risk. The factoring facility expires in December 2023.

Costs incurred on the sale of receivables are recorded in other expense, net ~~and interest expense, net of interest income~~ in the condensed consolidated statements of ~~net income. Receivables sold with recourse are~~operations. The sale of receivables under this contract is considered an off-balance sheet arrangement to the Company and is accounted for as ~~secured borrowings~~a true sale and ~~are recorded in debt payable within one year, and receivables are pledged equal to the balance of the borrowings. Receivables sold without recourse are accounted for as true sales and are~~is excluded from accounts receivable in the condensed consolidated balance sheet. Amounts outstanding under receivable transfer agreements entered into by various locations as of the period end were as follows:


	September 30, 2020		December 31, 2019
Off-balance sheet arrangements	$	77,856	$	103,818

Accounts receivable factored and related costs throughout the period were as follows:


	Off-Balance Sheet Arrangements
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Accounts receivable factored	$	124,910	$	108,957	$	352,103	$	376,944
Costs	120		218		591		691

During the quarter, the Factor changed to an alternative remittance and settlement process provided for under the factoring agreement, which resulted in the Company having an insignificant receivable due from the Factor. As of December 31, 2019, cash collections on behalf of the Factor that have yet to be remitted were $21,485 and are reflected in cash and cash equivalents in the condensed consolidated balance sheet.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~Amounts outstanding under receivable transfer agreements entered into by various locations were as follows:~~

September 30, 2017 December 31, 2016
Without recourse $ 62,594
$ 56,936
With recourse 5,018
5,258

~~Accounts receivable factored and related costs were as follows:~~

Without Recourse With Recourse
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016 2017 2016 2017 2016
Accounts receivable factored $ 98,244
$ 120,220
$ 390,354
$ 381,190
$ 6,326
$ 7,550
$ 20,432
$ 18,078
Costs 452
391
1,517
1,286
29
55
74
185

~~Repurchase of accounts receivable~~

During the three months ended September 30, 2017, the Company repurchased $12,043 of its accounts receivable in Europe that were previously sold to certain third party financial institutions through receivable purchase agreements. In addition, the Company repurchased $19,378 of its receivables in Europe in October 2017. The repurchases were made as part of the Company’s transition to a pan-European program under a single third party financial institution, which is expected to be completed in the fourth quarter of 2017.

~~10.~~13. Pension and Postretirement Benefits Other Than Pensions

The components of net periodic benefit (income) cost for the ~~three and nine months ended September 30, 2017 and 2016 for the~~ Company’s defined benefit plans and other postretirement benefit plans were as follows:


	Pension Benefits													Pension Benefits
	Three Months Ended September 30,													Three Months Ended September 30,
	2017						2016							2020				2019
	U.S.			Non-U.S.			U.S.			Non-U.S.				U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	204		$	1,018		$	202		$	861		Service cost	$	213	$	884	$	189	$	931
Interest cost	2,925			1,140			3,145			1,267			Interest cost	2,033		736		2,952		924
Expected return on plan assets	(4,003		)	(694		)	(3,959		)	(788		)	Expected return on plan assets	(3,421)		(580)		(4,155)		(599)
Amortization of prior service cost and actuarial loss	468			760			429			555			Amortization of prior service cost and actuarial loss	485		833		781		589
Settlement	—			5,717			—			—

Net periodic benefit (income) cost	$	(406	)	$	7,941		$	(183	)	$	1,895		Net periodic benefit (income) cost	$	(690)	$	1,873	$	(233)	$	1,845

	Pension Benefits													Pension Benefits
	Nine Months Ended September 30,													Nine Months Ended September 30,
	2017						2016							2020				2019
	U.S.			Non-U.S.			U.S.			Non-U.S.				U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	612		$	2,926		$	606		$	2,575		Service cost	$	639	$	2,838	$	567	$	2,985
Interest cost	8,775			3,268			9,435			3,805			Interest cost	6,099		2,277		8,856		3,047
Expected return on plan assets	(12,009		)	(2,001		)	(11,877		)	(2,367		)	Expected return on plan assets	(10,263)		(1,716)		(12,465)		(1,785)
Amortization of prior service cost and actuarial loss	1,404			2,171			1,287			1,664			Amortization of prior service cost and actuarial loss	1,455		2,417		2,343		1,798
Settlement	—			5,717			—			—

Net periodic benefit (income) cost	$	(1,218	)	$	12,081		$	(549	)	$	5,677		Net periodic benefit (income) cost	$	(2,070)	$	5,816	$	(699)	$	6,045












	Other Postretirement Benefits
	Three Months Ended September 30,
	2020				2019
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	26	$	97	$	26	$	93
Interest cost	170		175		202		182
Amortization of prior service credit and actuarial (gain) loss	(483)		108		(566)		94

Net periodic benefit (income) cost	$	(287)	$	380	$	(338)	$	369
	Other Postretirement Benefits
	Nine Months Ended September 30,
	2020				2019
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	78	$	286	$	92	$	301
Interest cost	510		516		663		564
Amortization of prior service credit and actuarial (gain) loss	(1,449)		319		(1,874)		225

Net periodic benefit (income) cost	$	(861)	$	1,121	$	(1,119)	$	1,090

The service cost component of net periodic benefit (income) cost is included in cost of products sold and selling, administrative and engineering expenses in the condensed consolidated statements of operations. All other components of net periodic benefit (income) cost are included in other expense, net in the condensed consolidated statements of operations for all periods presented.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Other Postretirement Benefits
Three Months Ended September 30,
2017 2016
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 79
$ 110
$ 90
$ 94
Interest cost 324
179
346
172
Amortization of prior service credit and actuarial gain (479 ) (4 ) (507 ) (16 )
Other 1
—
1
—
Net periodic benefit (income) cost $ (75 ) $ 285
$ (70 ) $ 250

Other Postretirement Benefits
Nine Months Ended September 30,
2017 2016
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 237
$ 316
$ 270
$ 280
Interest cost 972
516
1,038
510
Amortization of prior service credit and actuarial gain (1,437 ) (12 ) (1,521 ) (47 )
Other 3
—
3
—
Net periodic benefit (income) cost $ (225 ) $ 820
$ (210 ) $ 743

~~U.K Pension Settlement~~

During 2016, the Company undertook an initiative to de-risk pension obligations in the U.K. by purchasing a bulk annuity policy designed to match the liabilities of the plan, and subsequently entered into a wind-up process. During the three months ended September 30, 2017, the Company completed the wind-up process, resulting in a non-cash settlement charge of $5,717 and administrative expenses of $185, both of which are recorded in selling, administration & engineering expenses in the condensed consolidated statements of net income. As a result of the settlement, the Company’s overall projected benefit obligation as of December 31, 2016 was reduced by $17,100.

~~Contributions~~

~~The Company made a discretionary contribution of $3,500 to its U.S. pension plan in the three months ended September 30, 2017.~~

~~11.~~14. Other ~~Expense,~~Income (Expense), Net

The components of other ~~expense,~~income (expense), net were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Foreign currency gains (losses)	$	2,626	$	(73)	$	(4,397)	$	(1,529)
Components of net periodic benefit cost other than service cost	(56)		(404)		(165)		(1,372)
Factoring costs	(120)		(218)		(591)		(691)
Miscellaneous income (expense)	334		181		(204)		501
Other income (expense), net	$	2,784	$	(514)	$	(5,357)	$	(3,091)

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

This 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 “Forward-Looking Statements” below 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 in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2019 filed with the U.S. Securities and Exchange Commission (“~~2016~~2019 Annual Report”) ~~see~~, including Item 1A. “Risk Factors.” The following should be read in conjunction with our ~~2016~~2019 Annual Report and the other information included herein. Our discussion of trends and conditions supplements and updates such discussion included in our ~~2016~~2019 Annual Report. References in this quarterly report on Form 10-Q (the “Report”) to “we,” “our,” or the “Company” refer to Cooper-Standard Holdings Inc., together with its consolidated subsidiaries.

Executive Overview

Our Business

We design, manufacture and sell sealing, fuel and brake delivery, and fluid transfer ~~and anti-vibration~~ systems for use primarily in passenger vehicles and light trucks manufactured by global automotive original equipment manufacturers (“OEMs”) ~~and replacement markets.~~. We are primarily a “Tier 1” supplier, with approximately 83% of our sales in 2019 made directly to major OEMs. We operate our business along ~~four~~the following reportable segments: North America, Europe, Asia Pacific and South America. WeAll other business activities are ~~primarily a “Tier 1” supplier, with approximately 84%~~reported in Corporate, eliminations and other.

During the first quarter of 2019 and in prior periods, we also operated an anti-vibration systems (“AVS”) product line. On April 1, 2019, we completed the divestiture of our ~~sales in 2016 made directly to major OEMs.~~AVS product line.

Recent Trends and Conditions

General Economic Conditions and Outlook

The global automotive industry is susceptible to uncertain economic conditions that could adversely impact new vehicle ~~demand.~~demand and production. Business conditions may vary significantly from period to period or region to region. The global COVID-19 pandemic created an unusually high degree of economic disruption and uncertainty during the first nine months of 2020. Although most automotive manufacturing operations continued production during the third quarter, many industries remain significantly impacted by policies, regulations, risks and concerns surrounding the novel coronavirus, which is continuing to drive significant uncertainty for the broader economic outlook and for the automotive industry around the world. Economists at the International Monetary Fund (IMF) believe global economic activity is likely to remain subdued until perceived health risks abate. They are now expecting the global economy to contract by approximately 4.4% in 2020.

In North America, ~~while~~economic conditions and consumer confidence have improved compared to the ~~U.S.~~second quarter but continue to be negatively impacted by concerns over the COVID-19 pandemic and related government-imposed restrictions. Uncertainty related to the outcome of the presidential election in the United States will also likely weigh on consumer confidence in the region through the fourth quarter of 2020.

The United States government has taken historic measures to provide fiscal stimulus to the economy ~~has been relatively stable, market indicators show signs~~in an effort to sustain businesses, limit job losses and preempt deeper declines in consumer confidence during the pandemic. Further stimulus actions are being considered. Despite these efforts, IMF economists now expect economic contraction of ~~softening consumer demand. The mix of vehicles produced continues to shift away from passenger cars into crossover utility vehicles and light trucks.~~approximately 4.7% for the North America region in 2020.

In ~~Europe, the continuing economic recovery is driving increased demand for light vehicles. Certain countries within~~ the European region, ~~are faced with an uncertain~~the IMF is projecting economic contraction of approximately 8.3% for 2020. Current and ~~potentially volatile~~potential future impacts of the COVID-19 pandemic will continue to weigh on the economies of the region. Due to the pandemic, certain European governments mandated closures of broad segments of the economy in the first half of the year. Partial re-opening of the closed sectors has occurred at varying times and rates across the region. More recently, however, a resurgence of COVID-19 cases is causing some governments to consider further shutdown actions. While automotive manufacturers have resumed production, on-going health risks, geopolitical ~~climate, which~~concerns and the implementation of new environmental regulations in the automotive industry will likely continue to impact vehicle demand and economic growth.

In the Asia Pacific region, the IMF expects China’s economic growth rate to slow to just 1.8% in 2020. The post-COVID-19 economic recovery in the country is continuing, driven, in part, by a new infrastructure initiative that is focused on

accelerating the digital transformation of the country’s industries. The retail sector has also been improving in the third quarter, pointing to improved consumer confidence. Finally, the manufacturers purchasing managers index (PMI) reached a nine-year high in September, suggesting a strong industrial growth environment through the remainder of the year.

In South America, the IMF estimates that the Brazilian economy will contract by approximately 5.8% in 2020 as compared to 2019. Economic activity rebounded in the third quarter but not sufficiently to offset the sharp decline in the second quarter that was driven by the COVID-19 pandemic. The Brazilian government has extended certain economic assistance programs to the end of the year to help support consumers. This spending will add to the country’s already high national debt level and could ~~impact~~lead to lower consumer confidence and foreign investment in the region going forward. We remain cautious for the mid to long-term outlook given the long history of political instability and economic ~~growth.~~volatility in the region.

~~The Chinese government continues~~Raw Materials

Our business is susceptible to ~~manage~~inflationary pressures with respect to raw materials which may place operational and profitability burdens on the ~~nation’s economy with a goal of sustaining growth. Overall economic growth, consumer preferences~~entire supply chain. Costs related to raw materials, such as steel, aluminum, and ~~an expanding middle class in China~~oil and oil-derived commodities, continue to ~~drive crossover utility vehicle demand higher, while demand for passenger cars is expected~~be volatile. In addition, we continue to ~~decline slightly year over year.~~

~~Finally, due~~expect commodity cost volatility to ~~continued volatility in Brazil,~~have an impact on future earnings and operating cash flows. As such, on an ongoing basis, we ~~remain cautious about consumer confidence~~work with our customers and ~~vehicle demand in this region.~~suppliers to mitigate both inflationary pressures and our material-related cost exposures.

Production Levels

Our business is directly affected by the automotive vehicle production rates in North America, Europe, Asia Pacific and South America. ~~New vehicle demand is driven by macroeconomic and other factors, such~~Beginning in the first quarter of 2020, as interest rates, manufacturer and dealer sales incentives, fuel prices, consumer confidence, employment levels, income growth trends and government and tax incentives. The industry could face uncertaintiesa result of COVID-19, we experienced the shutdown of effectively all of our facilities in Asia Pacific coinciding with the shutdown of our customer facilities in that ~~may adversely impact consumer demand~~region. Facility shutdowns then occurred in March 2020 for ~~vehicles as well as the future production environment.~~

Ina majority of our facilities in North America, ~~light vehicle inventory~~Europe and South America.

Production resumed in ~~the U.S. had risen significantly above normalized levels at~~Asia Pacific by the end of the first quarter of 2020, albeit at a lower capacity, and has steadily increased in production capacity throughout the year. For our North America and Europe facilities, production resumed in May 2020 at a lower capacity and has increased through the subsequent months. Finally, for our South America facilities, production resumed in the second quarter, ~~of 2017. Production cuts by OEMs in~~but has increased more slowly compared to the ~~third quarter of 2017 were successful in bringing inventory closer~~other regions. We are collaborating closely with our customers as production volume continues to ~~normalized~~increase and approach pre-COVID-19 levels, while also adhering to enhanced safety standards and ~~more aligned with consumer demand. Even in view of lower inventory levels, we expect overall light vehicle production in the fourth quarter of 2017~~measures to be slightly lower than in the fourth quarter of 2016, driven largely by continued lower production of passenger cars. European light vehicle production has seen modest year-over-year growth through the first three quarters of 2017 and we expect this trend to continue through the fourth quarter of 2017. In Asia Pacific, we expect light vehicle production to continue to grow sequentially at modest levels through the remainder of 2017, driven mainly by China.

protect our employees.

Light vehicle production in certain regions for the three and nine months ended September 30, ~~2017~~2020 and ~~2016 was:~~2019 was as follows:


	Three Months Ended September 30,			Nine Months Ended September 30,
(In millions of units)	2020(1)	2019(1)	% Change	2020(1)	2019(1)	% Change
North America	4.0	4.0	0.5%	9.2	12.5	(26.5)%
Europe	4.3	4.7	(7.7)%	11.3	16.0	(29.5)%
Asia Pacific	10.9	11.0	(1.4)%	27.7	33.6	(17.8)%
Greater China	6.4	5.8	10.6%	15.8	17.3	(8.8)%
South America	0.7	0.9	(21.4)%	1.5	2.5	(40.9)%

Three Months Ended September 30, Nine Months Ended September 30,
(In millions of units)
2017⁽¹⁾

2016⁽¹⁾
% Change
2017⁽¹⁾

2016⁽¹⁾
% Change
North America 4.0
4.4
(9.7)% 13.0
13.5
(3.7)%
Europe 5.0
4.7
5.2% 16.6
16.2
2.4%
Asia Pacific⁽²⁾
11.9
11.5
3.5% 36.0
34.7
3.6%
South America 0.9
0.7
26.1% 2.4
2.0
20.9%


~~(1)~~	~~Production data based on IHS Automotive, October 2017.~~


~~(2)~~	~~Includes Greater China units of 6.4 for both the three months ended September 30, 2017 and 2016, and 19.5 and 19.0 for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Industry Overview~~(1)Production data based on IHS Automotive, October 2020.

~~Competition in~~The COVID-19 pandemic has emerged as the biggest risk factor facing the automotive ~~supplier industry is intense~~industry. In the first half of the year, total vehicle production decreased substantially across the globe. Plant shutdowns have greatly slowed production and have been accompanied by decreased demand for vehicles, as new vehicle sales are highly dependent on strong consumer confidence and low unemployment. While the outlook for the fourth quarter of 2020 and the full year 2021 remains uncertain, the global economy has ~~increased in recent years as OEMs have demonstrated a preference for stronger relationships with fewer suppliers. Because~~begun to rebound from the impacts of ~~a growing emphasis on global~~the pandemic. Lower unemployment rates, improving consumer confidence and lower than normal light vehicle ~~platforms, automotive suppliers with a global manufacturing footprint capable of fully servicing customers around the world will typically~~inventory levels could all have a ~~competitive advantage over smaller, regional competitors. This dynamic is likely to result in further consolidation of competing suppliers within our industry over time.~~positive impact on light vehicle production 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 innovative solutions to meet evolving technologies aimed at improved emissions and fuel economy.

Increased competitiveness in the industry, as well as customer focus on costs, has resulted in pressure on suppliers for price reductions, reducing the overall profitability of the industry. Consolidations and market share shifts among vehicle manufacturers continue to put additional pressures on the supply chain. These pricing and market pressures will continue to drive our focus on reducing our overall cost structure through continuous improvement initiatives, capital redeployment, restructuring and other cost management processes.

In addition to the above, other factors will present opportunities for automotive suppliers who are positioned for the changing environment, including autonomous and connected vehicles, evolving government regulation, and consumer preference for environmentally friendly products and technology, including hybrid and electric vehicle architectures.

Results of Operations


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		Change		2020		2019		Change
	(dollar amounts in thousands)
Sales	$	683,200	$	739,518	$	(56,318)	$	1,678,557	$	2,382,211	$	(703,654)
Cost of products sold	598,714		659,313		(60,599)		1,611,299		2,088,631		(477,332)
Gross profit	84,486		80,205		4,281		67,258		293,580		(226,322)
Selling, administration & engineering expenses	60,059		63,020		(2,961)		199,001		224,164		(25,163)
Gain on sale of business, net	(2,314)		1,730		(4,044)		(2,314)		(188,180)		185,866
Amortization of intangibles	1,669		4,250		(2,581)		9,632		13,173		(3,541)
Restructuring charges	6,186		5,572		614		23,236		29,214		(5,978)
Impairment of assets held for sale	—		—		—		86,470		—		86,470
Other impairment charges	100		1,958		(1,858)		1,240		4,146		(2,906)
Operating profit (loss)	18,786		3,675		15,111		(250,007)		211,063		(461,070)
Interest expense, net of interest income	(17,985)		(10,351)		(7,634)		(40,993)		(33,858)		(7,135)
Equity in earnings (losses) of affiliates	738		1,515		(777)		(842)		5,764		(6,606)
Other income (expense), net	2,784		(514)		3,298		(5,357)		(3,091)		(2,266)
Income (loss) before income taxes	4,323		(5,675)		9,998		(297,199)		179,878		(477,077)
Income tax (benefit) expense	(2,386)		745		(3,131)		(55,485)		47,001		(102,486)
Net income (loss)	6,709		(6,420)		13,129		(241,714)		132,877		(374,591)
Net (income) loss attributable to noncontrolling interests	(2,328)		1,543		(3,871)		1,288		2,036		(748)
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	4,381	$	(4,877)	$	9,258	$	(240,426)	$	134,913	$	(375,339)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Change 2017 2016 Change
(dollar amounts in thousands)
Sales $ 869,016
$ 855,656
$ 13,360
$ 2,680,212
$ 2,597,457
$ 82,755
Cost of products sold 718,187
690,984
27,203
2,187,058
2,101,000
86,058
Gross profit 150,829
164,672
(13,843 ) 493,154
496,457
(3,303 )
Selling, administration & engineering expenses 94,145
92,368
1,777
267,883
268,498
(615 )
Amortization of intangibles 3,432
3,457
(25 ) 10,563
9,974
589
Impairment charges —
—
—
4,270
—
4,270
Restructuring charges 9,909
10,430
(521 ) 28,220
33,468
(5,248 )
Other operating loss —
—
—
—
155
(155 )
Operating profit 43,343
58,417
(15,074 ) 182,218
184,362
(2,144 )
Interest expense, net of interest income (10,256 ) (10,114 ) (142 ) (31,788 ) (29,861 ) (1,927 )
Equity in earnings of affiliates 660
1,386
(726 ) 3,735
5,823
(2,088 )
Loss on refinancing and extinguishment of debt —
—
—
(1,020 ) —
(1,020 )
Other expense, net (451 ) (518 ) 67
(3,275 ) (8,589 ) 5,314
Income before income taxes 33,296
49,171
(15,875 ) 149,870
151,735
(1,865 )
Income tax expense 7,838
12,525
(4,687 ) 40,258
43,312
(3,054 )
Net income 25,458
36,646
(11,188 ) 109,612
108,423
1,189
Net income attributable to noncontrolling interests (818 ) (284 ) (534 ) (2,810 ) (549 ) (2,261 )
Net income attributable to Cooper-Standard Holdings Inc. $ 24,640
$ 36,362
$ (11,722 ) $ 106,802
$ 107,874
$ (1,072 )

Three Months Ended September 30, ~~2017~~2020 Compared with Three Months Ended September 30, ~~2016~~2019

~~Sales.~~Sales

Sales for the three months ended September 30, ~~2017 increased $13.4 million, or 1.6%~~2020 decreased 7.6%, compared to the three months ended September 30, ~~2016, primarily~~2019. The decline was driven by the ~~acquisition~~decrease in vehicle production volume and the divestiture of ~~AMI Industries’ fuel~~our European rubber fluid transfer and ~~brake business, consolidation~~specialty sealing businesses and Indian operations.


	Three Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume / Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Total sales	$	683,200	$	739,518	$	(56,318)	$	(8,958)	$	2,234	$	(49,594)

* Net of ~~a previously unconsolidated joint venture and favorable foreign exchange, partially offset by~~ customer price ~~reductions.~~reductions

~~Cost~~

Gross Profit


	Three Months Ended September 30,								Variance Due To:
	2020			2019			Change		Volume / Mix*		Foreign Exchange		Cost Increases / (Decreases)**
	(dollar amounts in thousands)
Cost of products sold	$	598,714		$	659,313		$	(60,599)	$	(806)	$	3,246	$	(63,039)
Gross profit	84,486			80,205			4,281		(8,152)		(1,012)		13,445
Gross profit percentage of sales	12.4		%	10.8		%

* Net of ~~Products Sold.~~customer price reductions

** Includes the net impact of divestitures

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation, ~~and amortization~~warranty costs and other direct operating expenses. ~~Cost of products sold for the three months ended September 30, 2017 increased $27.2 million, or 3.9%, compared to the three months ended September 30, 2016. Cost~~The Company’s material cost of products sold was ~~impacted by commodity price pressures, transactional foreign exchange pressure, general inflation~~approximately 49% and ~~acquisitions. These items were partially offset by continuous improvement and material cost savings. Materials comprise the largest component of our cost of products sold and represented approximately~~ 50% of ~~the~~ total cost of products sold for the three months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The change in the cost of products sold was driven by vehicle volume and mix, the divestiture of our European rubber fluid transfer and specialty sealing businesses and Indian operations, continuous improvement and lean manufacturing, material cost reductions, commodity price fluctuations, foreign exchange and wage inflation.

~~Gross Profit.~~Gross profit for the three months ended September 30, ~~2017 decreased $13.8~~2020 increased $4.3 million or ~~8.4%,~~5.3% compared to the three months ended September 30, ~~2016. As a percentage of sales, gross profit was 17.4% and 19.2% for the three months ended September 30, 2017 and 2016, respectively.~~2019. The ~~decrease in gross profit~~increase was driven ~~primarily~~ by ~~customer price reductions, commodity price pressures,~~net favorable operational performance, restructuring savings and ~~unfavorable vehicle production mix.~~material cost reductions. These items were partially offset by ~~continuous improvement,~~wage inflation, employee incentives and ~~material cost savings.~~foreign exchange.

Selling, Administration and ~~Engineering.~~Engineering Expense. Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Sales, administration and engineering expense for the three months ended September 30, ~~2017~~2020 was ~~$94.1 million, or 10.8%~~8.8% of sales compared to ~~$92.4 million, or 10.8% of sales,~~8.5% for the three months ended September 30, ~~2016.~~2019. The increase in rate was driven by the decline in total sales. Selling, administration and engineering ~~expense~~expenses were lower by $3.0 million. The decrease in amount was primarily due to savings generated from salaried headcount initiatives including net divestitures and lower travel expenses, partially offset by general inflation and higher variable employee compensation expenses.

Gain on Sale of Business, Net. The gain on sale of business of $2.3 million for the three months ended September 30, ~~2017 increased as a result of non-cash settlement charges relating~~2020 related to the ~~wind-up~~net effect of our ~~U.K. pension plan~~2020 divestitures, which included the European fluid transfer and specialty sealing business, Indian operations, the deconsolidation of ~~$5.7~~a joint venture in our Asia Pacific region, and the finalized adjustments related to the sale of our AVS product line. The gain on sale of business for the three months ended September 30, 2019 included a $1.7 million ~~and investments~~adjustment, decreasing the amount of the gain recognized on the sale of the AVS business in the second quarter of 2019, primarily due to ~~support growth and innovation, partially offset~~working capital adjustments.

Amortization of Intangibles. Intangible amortization for the three months ended September 30, 2020 decreased $2.6 million compared to the three months ended September 30, 2019. The decrease was primarily driven by ~~lower compensation related costs.~~a customer relationship intangible asset in the North America region that was fully amortized during the second quarter of 2020.

Restructuring.Restructuring charges for the three months ended September 30, ~~2017 decreased $0.5~~2020 increased $0.6 million compared to the three months ended September 30, ~~2016.~~2019. The ~~decrease~~increase was ~~primarily~~ driven ~~by lower restructuring expenses related to our~~

~~European initiatives of $3.4 million, partially offset~~ by higher restructuring charges ~~attributed to~~in North America, ~~and Asia Pacific of $2.9 million.~~primarily related to plant closures.

~~Other Expense, Net.~~ ~~Other expense~~Impairment Charges. Non-cash impairment charges for the three months ended September 30, ~~2017~~2020 decreased ~~$0.1~~$1.9 million compared to the three months ended September 30, ~~2016,~~2019, primarily related to tooling machinery and equipment charges due to ~~other miscellaneous income, partially offset by increased foreign currency losses.~~the termination of certain customer programs in the Asia Pacific region in the third quarter of 2019.

~~Income Tax~~Interest Expense,~~. Income tax~~ Net. Net interest expense for the three months ended September 30, ~~2017~~2020 increased $7.6 million compared to the three months ended September 30, 2019, primarily due to higher outstanding debt balances including our recently issued Senior Secured Notes.

Other Income (Expense), Net. Other income for the three months ended September 30, 2020 increased $3.3 million compared to the three months ended September 30, 2019, primarily due to higher foreign currency gains.

Income Tax (Benefit) Expense. Income tax benefit for the three months ended September 30, 2020 was ~~$7.8~~$2.4 million on earnings before income taxes of ~~$33.3~~$4.3 million. This compares to an income tax expense of ~~$12.5~~$0.7 million on ~~earnings~~losses before income taxes of ~~$49.2~~$5.7 million for the ~~same period of 2016.~~three months ended September 30, 2019. The effective tax rate for the three months ended September 30, ~~2017~~2020 compared to the three months ended September 30, 2016 was lower primarily due to nonrecurring discrete items, including the impact of participating in a foreign tax amnesty program, recorded in the three months ended September 30, 2017. The income tax rate for the three months ended September 30, 2017 varied from statutory rates2019 differed primarily due to the ~~impact~~geographic mix of ~~income taxes on foreign earnings taxed at rates lower than the U.S. statutory rate,~~

pre-tax losses, the inability to record a tax benefit for pre-tax losses in certain foreign jurisdictions, as well as benefits recorded as a result of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) net operating loss (“NOL”) carry back provision that allows NOLs generated to be carried back up to five years at the ~~extent not offset by other categories~~tax rates in effect during those periods, rather than carried forward at current federal tax rates of 21%. We have included a $19.8 million benefit in the estimated annual effective tax rate for this CARES Act provision which was used to calculate the income tax ~~credits, income tax incentives, excess tax benefits related to share-based compensation and other permanent items.~~benefit recorded in the three months ended September 30, 2020.

Nine Months Ended September 30, ~~2017~~2020 Compared with Nine Months Ended September 30, ~~2016~~2019

~~Sales.~~Sales

Sales for the nine months ended September 30, ~~2017 increased $82.8 million, or 3.2%~~2020 decreased 29.5%, compared to the nine months ended September 30, ~~2016, primarily~~2019. The decline was mainly driven by the decrease in vehicle production volume due to ~~improved volume~~government imposed global shutdowns related to the COVID-19 pandemic, net divestitures, foreign exchange and ~~mix in all regions, the acquisition of AMI Industries’ fuel and brake business and consolidation of a previously unconsolidated joint venture, partially offset by~~ customer price ~~reductions and unfavorable foreign exchange.~~reductions.

~~Cost~~


	Nine Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume / Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Total sales	$	1,678,557	$	2,382,211	$	(703,654)	$	(557,327)	$	(18,003)	$	(128,324)

* Net of ~~Products Sold.~~customer price reductions

Gross Profit


	Nine Months Ended September 30,								Variance Due To:
	2020			2019			Change		Volume / Mix*		Foreign Exchange		Cost Increases / (Decreases)**
	(dollar amounts in thousands)
Cost of products sold	$	1,611,299		$	2,088,631		$	(477,332)	$	(311,037)	$	(15,548)	$	(150,747)
Gross profit	67,258			293,580			(226,322)		(246,290)		(2,455)		22,423
Gross profit percentage of sales	4.0		%	12.3		%

* Net of customer price reductions

** Includes the net impact of divestitures

Cost of products sold ~~for the nine months ended September 30, 2017 increased $86.1 million, or 4.1%, compared to the nine months ended September 30, 2016. Cost~~is primarily comprised of ~~products sold increased primarily due to inflation, commodity price pressures, higher production volumes~~material, labor, manufacturing overhead, freight, depreciation, warranty costs and ~~acquisitions. These items were partially offset by continuous improvement and~~other direct operating expenses. The Company’s material ~~cost savings. Materials comprise the largest component of our~~ cost of products sold was approximately 45% and ~~represented approximately~~ 51% ~~and 50%~~ of ~~the~~ total cost of products sold for the nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The change in the cost of products sold was driven by government imposed global shutdowns related to the COVID-19 pandemic, the sale of our AVS product line, the divestiture of our European rubber fluid transfer and specialty sealing businesses and Indian operations, continuous improvement and lean manufacturing, material cost reductions, commodity price fluctuations, foreign exchange, and wage inflation.

~~Gross Profit.~~Gross profit for the nine months ended September 30, ~~2017~~2020 decreased ~~$3.3 million, or 0.7%,~~77.1% compared to the nine months ended September 30, ~~2016.~~2019. The decrease ~~in gross profit~~ was driven ~~primarily~~ by ~~inflation, commodity price pressures and unfavorable~~the decline in vehicle production ~~mix. As a percentage of sales, gross profit was 18.4%~~volume due to government imposed global shutdowns related to the COVID-19 pandemic, customer price reductions, employee incentives and ~~19.1% for the nine months ended September 30, 2017~~wage inflation. These items were partially offset by net favorable operational performance, restructuring savings, foreign exchange and ~~2016, respectively.~~material cost reductions.

Selling, Administration and ~~Engineering.~~Engineering Expense. Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Sales, administration and engineering expense for the nine months ended September 30, ~~2017~~2020 was ~~$267.9 million or 10.0%~~11.9% of sales compared to ~~$268.5 million, or 10.3% of sales,~~9.4% for the nine months ended September 30, ~~2016. Selling, administration~~2019. This increase in rate was primarily due to the significant decline in total sales. The decrease in amount was primarily due to savings generated from salaried headcount initiatives, net divestitures and ~~engineering expense for the nine months ended September 30, 2017 was favorable as a result of~~ lower ~~compensation related costs,~~travel expenses, partially offset by ~~non-cash settlement charges relating to the wind-up~~general inflation and higher variable employee compensation expenses.

Gain on Sale of ~~our U.K. pension plan~~Business, Net. The gain on sale of ~~$5.7 million, and investments to support growth and innovation.~~

~~Impairment charges.~~ ~~Impairment charges~~business of ~~$4.3~~$2.3 million for the nine months ended September 30, ~~2017 resulted from our decision~~2020 related to ~~divest two~~the net effect of our ~~inactive~~2020 divestitures, which included certain European ~~sites based~~businesses and our Indian operations, the deconsolidation of a joint venture in our Asia Pacific region, and the finalized adjustments related to the sale of our AVS product line. The gain on ~~current real estate market conditions.~~sale of business of $188.2 million for the nine months ended September 30, 2019 related to the sale of our AVS product line within our North America, Europe and Asia Pacific segments.

Amortization of Intangibles. Intangible amortization for the nine months ended September 30, 2020 decreased $3.5 million compared to the nine months ended September 30, 2019. The decrease was primarily driven by a customer relationship intangible asset in the North America region that was fully amortized during the second quarter of 2020.

Restructuring.Restructuring charges for the nine months ended September 30, ~~2017~~2020 decreased ~~$5.2~~$6.0 million compared to the nine months ended September 30, ~~2016.~~2019. The decrease was ~~primarily driven by~~a result of lower ~~expenses~~restructuring charges in Europe, Asia Pacific and Corporate and other.

Impairment Charges. Non-cash impairment charges for the nine months ended September 30, 2020 increased $83.6 million compared to the nine months ended September 30, 2019. The increase primarily related to ~~our European initiatives~~reducing the carrying value of ~~$7.8 million, partially offset by higher restructuring charges attributed~~the divested assets to ~~North America and Asia Pacific of $2.6 million.~~fair value less costs to sell. Fair value was determined using a market approach, estimated based on expected proceeds.

Interest Expense, Net.Net interest expense for the nine months ended September 30, ~~2017~~2020 increased ~~$1.9~~$7.1 million compared to the nine months ended September 30, ~~2016, which resulted~~2019, primarily ~~from~~due to higher ~~interest rates related to the new~~outstanding debt balances including our recently issued Senior Secured Notes.

~~Loss on Refinancing and Extinguishment of Debt.~~ Loss on refinancing and extinguishment of debt of $1.0 million for the nine months ended September 30, 2017 resulted from the partial write off of new and unamortized debt issuance costs and unamortized original issue discount related to the amendment of the Term Loan Facility.

Other Expense, Net. Other expense for the nine months ended September 30, ~~2017 decreased $5.3~~2020 increased $2.3 million compared to the nine months ended September 30, ~~2016. The decrease was~~2019, primarily due to ~~the nonrecurrence of underwriting fees related to the secondary offering of $5.9 million recorded in the nine months ended September 30, 2016 and other miscellaneous income,~~higher foreign currency losses, partially offset by ~~increased foreign currency losses.~~lower benefit related costs.

Income Tax ~~Expense~~. (Benefit) Expense. Income tax ~~expense~~benefit for the nine months ended September 30, ~~2017~~2020 was ~~$40.3~~$55.5 million on ~~earnings~~losses before income taxes of ~~$149.9~~$297.2 million. This compares to income tax expense of ~~$43.3~~$47.0 million on earnings before income taxes of ~~$151.7~~$179.9 million for the ~~same period of 2016.~~nine months ended September 30, 2019. The effective tax rate for the nine months ended September 30, ~~2017~~2020 compared to the nine months ended September 30, 2016 was lower primarily due to nonrecurring discrete items, including the impact of participating in a foreign tax amnesty program, recorded in the nine months ended September 30, 2017. The income tax rate for the nine months ended September 30, 2017 varied from statutory rates2019 differed primarily due to the ~~impact~~geographic mix of ~~income taxes~~pre-tax losses driven by the impairment charge on ~~foreign earnings taxed at rates lower than the U.S. statutory rate,~~divested entities, the inability to record a tax benefit for pre-tax losses in certain foreign jurisdictions, as well as benefits recorded as a result of the CARES Act net operating loss carry back provision. We have included a $19.8 million benefit in the estimated annual effective tax rate for this CARES Act provision which was used to calculate the ~~extent not offset by other categories of~~ income tax ~~credits, income~~benefit recorded in the nine months ended September 30, 2020. Additionally, a discrete expense of $13.4 million for the initial recognition of valuation allowances against net deferred tax ~~incentives, excess tax benefits related to share-based compensation and other permanent items.~~assets in certain foreign jurisdictions was recorded in the nine months ended September 30, 2020.

Segment Results of Operations

Our business is organized into the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company uses Segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We have defined adjusted EBITDA as net income before interest, taxes, depreciation, amortization, restructuring expense, and special items.

The following ~~table presents~~tables present sales and segment ~~profit (loss)~~adjusted EBITDA for each of the reportable ~~segments for the three and nine months ended September 30, 2017 and 2016:~~segments.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 Change 2017 2016 Change
(dollar amounts in thousands)
Sales to external customers
North America $ 437,406
$ 450,795
$ (13,389 ) $ 1,403,270
$ 1,361,183
$ 42,087
Europe 254,399
242,773
11,626
776,346
794,411
(18,065 )
Asia Pacific 148,493
137,174
11,319
421,926
380,483
41,443
South America 28,718
24,914
3,804
78,670
61,380
17,290
Consolidated $ 869,016
$ 855,656
$ 13,360
$ 2,680,212
$ 2,597,457
$ 82,755

Segment profit (loss)
North America $ 44,214
$ 55,031
$ (10,817 ) $ 170,971
$ 169,857
$ 1,114
Europe (9,024 ) (5,632 ) (3,392 ) (20,633 ) (7,510 ) (13,123 )
Asia Pacific 3,050
3,037
13
11,036
6,073
4,963
South America (4,944 ) (3,265 ) (1,679 ) (11,504 ) (16,685 ) 5,181
Consolidated income before income taxes $ 33,296
$ 49,171
$ (15,875 ) $ 149,870
$ 151,735
$ (1,865 )

Three Months Ended September 30, ~~2017~~2020 Compared with Three Months Ended September 30, ~~2016~~2019

~~North America.~~Sales ~~for the three months ended September 30, 2017 decreased $13.4 million, or 3.0%, compared to the three months ended September 30, 2016, primarily due to decreased volume~~


	Three Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume/ Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Sales to external customers
North America	$	359,007	$	372,104	$	(13,097)	$	(11,812)	$	(1,285)	$	—
Europe	146,029		187,438		(41,409)		(13,526)		7,448		(35,331)
Asia Pacific	131,063		123,139		7,924		20,377		1,810		(14,263)
South America	17,580		25,220		(7,640)		(1,448)		(6,192)		—
Total Automotive	653,679		707,901		(54,222)		(6,409)		1,781		(49,594)
Corporate, eliminations and other	29,521		31,617		(2,096)		(2,549)		453		—
Consolidated	$	683,200	$	739,518	$	(56,318)	$	(8,958)	$	2,234	$	(49,594)

* Net of customer price reductions

•Volume and ~~unfavorable~~ mix, ~~and~~net of customer price reductions, ~~partially offset~~is driven by the ~~acquisition~~regional mix of ~~AMI Industries’ fuel~~vehicles in Europe, North America and ~~brake business.~~ China.

•The impact of foreign currency exchange primarily relates to the Euro and Brazilian Real.

Segment ~~profit for the three months ended September 30, 2017 decreased by $10.8 million, primarily due to lower volume~~adjusted EBITDA


	Three Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases		Divestitures
	(dollar amounts in thousands)
Segment adjusted EBITDA
North America	$	58,115	$	59,819	$	(1,704)	$	(7,544)	$	562	$	6,062	$	(784)
Europe	(1,466)		6,269		(7,735)		(5,960)		(375)		(1,488)		88
Asia Pacific	12,246		(12,080)		24,326		6,321		1,726		14,480		1,799
South America	(2,680)		(2,678)		(2)		1,863		(1,781)		(84)		—
Total Automotive	66,215		51,330		14,885		(5,320)		132		18,970		1,103
Corporate, eliminations and other	(2,081)		2,491		(4,572)		(2,832)		205		(3,775)		1,830
Consolidated adjusted EBITDA	$	64,134	$	53,821	$	10,313	$	(8,152)	$	337	$	15,195	$	2,933

* Net of customer price reductions

•Volume and ~~unfavorable~~ mix, net of customer price reductions, is driven by the regional mix of vehicles in Europe, North America and ~~continued investments to support innovation, partially offset~~China.

•The impact of foreign currency exchange is driven by ~~operational efficiencies~~the Chinese Renminbi, Brazilian Real, Euro, Polish Zloty, and ~~net material cost savings.~~Czech Koruna.

~~Europe.~~ ~~Sales for the three months ended September 30, 2017 increased $11.6 million, or 4.8%, compared to the three months ended September 30, 2016, primarily~~

•The Cost (Increases) / Decreases category above includes:

◦Reduction in compensation-related expenses due to ~~favorable foreign exchange~~salaried headcount initiatives, purchasing savings through lean initiatives, and ~~improved volume~~restructuring savings;

◦Wage and ~~mix. Segment loss for the three months ended September 30, 2017 increased by $3.4~~variable employee compensation increases;

◦The non-recurrence of prior year one-time impact of commercial settlements in Asia Pacific;

◦Net manufacturing efficiencies of $10 million, primarily ~~due to non-cash settlement charges relating to the wind-up of~~driven by our ~~U.K. pension plan of $5.7 million~~North America and ~~commodity price pressures, partially offset by lower restructuring expense, improved volume and mix and operational efficiencies, including restructuring savings.~~Asia Pacific segments.

~~Asia Pacific.~~ Sales for the three months ended September 30, 2017 increased $11.3 million, or 8.3%, compared to the three months ended September 30, 2016, primarily due to improved volume and mix and the consolidation of a previously unconsolidated joint venture, partially offset by customer price reductions. Segment profit for the three months ended September 30, 2017 was flat compared to the three months ended September 20, 2016. Continuous improvement and material cost savings were offset by customer price reductions, wage inflation, and higher engineering costs to support growth in the region.

~~South America.~~ Sales for the three months ended September 30, 2017 increased $3.8 million, or 15.3%, compared to the three months ended September 30, 2016, primarily due to improved volume and mix and favorable foreign exchange, partially

offset by customer price reductions. Segment loss for the three months ended September 30, 2017 increased by $1.7 million primarily due to a $3.1 million pre-tax charge for costs associated with a foreign tax amnesty program, of which $0.2 million was paid in cash, and customer price reductions, partially offset by continuous improvement, volume and mix.

Nine Months Ended September 30, ~~2017~~2020 Compared with Nine Months Ended September 30, ~~2016~~2019

~~North America.~~Sales ~~for the nine months ended September 30, 2017 increased $42.1 million, or 3.1%, compared to the nine months ended September 30, 2016, primarily due to improved volume~~


	Nine Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume/ Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Sales to external customers
North America	$	820,145	$	1,198,943	$	(378,798)	$	(321,792)	$	(2,175)	$	(54,831)
Europe	410,076		634,867		(224,791)		(167,710)		685		(57,766)
Asia Pacific	316,133		367,086		(50,953)		(29,847)		(5,379)		(15,727)
South America	41,932		73,581		(31,649)		(20,572)		(11,077)		—
Total Automotive	1,588,286		2,274,477		(686,191)		(539,921)		(17,946)		(128,324)
Corporate, eliminations and other	90,271		107,734		(17,463)		(17,406)		(57)		—
Consolidated	$	1,678,557	$	2,382,211	$	(703,654)	$	(557,327)	$	(18,003)	$	(128,324)

* Net of customer price reductions

•Volume and mix, ~~and the acquisition~~net of AMI Industries’ fuel and brake business, partially offset by customer price reductions. Segment profit for the nine months ended September 30, 2017 increased by $1.1 million, primarily due to continuous improvement, net material cost savings, favorable foreign exchange and acquisitions, partially offset by customer price reductions, is mainly driven by the impact of the decline in vehicle production ~~mix and continued investments to support innovation.~~

~~Europe.~~ ~~Sales for the nine months ended September 30, 2017 decreased $18.1 million, or 2.3%, compared~~volume driven by government imposed global shutdowns related to the ~~nine months ended September 30, 2016,~~COVID-19 pandemic.

•The impact of foreign currency exchange primarily ~~due~~relates to the Brazilian Real, Chinese Renminbi, Canadian Dollar and Mexican Peso.

Segment adjusted EBITDA


	Nine Months Ended September 30,						Variance Due To:
	2020		2019		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases		Divestitures
	(dollar amounts in thousands)
Segment adjusted EBITDA
North America	$	52,260	$	172,853	$	(120,593)	$	(140,772)	$	174	$	24,542	$	(4,537)
Europe	(47,492)		21,540		(69,032)		(74,178)		635		6,978		(2,467)
Asia Pacific	(6,983)		(14,313)		7,330		(17,735)		1,139		22,717		1,209
South America	(11,608)		(4,817)		(6,791)		(4,283)		(6,465)		3,957		—
Total Automotive	(13,823)		175,263		(189,086)		(236,968)		(4,517)		58,194		(5,795)
Corporate, eliminations and other	(7,516)		663		(8,179)		(9,322)		(1,492)		805		1,830
Consolidated adjusted EBITDA	$	(21,339)	$	175,926	$	(197,265)	$	(246,290)	$	(6,009)	$	58,999	$	(3,965)

* Net of customer price reductions

•Volume and unfavorable foreign exchange, partially offset by improvement in volume and mix. Segment loss for the nine months ended September 30, 2017 increased by $13.1 million, primarily due to non-cash settlement charges relating to the wind-upmix, net of ~~our U.K. pension plan of $5.7 million, impairment charges recorded in the first quarter of 2017,~~ customer price reductions ~~commodity price pressure, product mix and foreign exchange, partially offset~~primarily includes the impact of the decline in vehicle production volume as driven by ~~lower restructuring expense and operational efficiencies, including restructuring savings.~~

~~Asia Pacific. Sales for the nine months ended September 30, 2017 increased $41.4 million, or 10.9% compared~~government imposed global shutdowns related to the ~~nine months ended September 30, 2016, primarily~~COVID-19 pandemic.

•The impact of foreign currency exchange is driven by the Brazilian Real, Euro, Chinese Renminbi, Brazilian Real, Euro, Polish Zloty, and Czech Koruna.

•The Cost (Increases) / Decreases category above includes:

◦Reduction in compensation-related expenses, due to salaried headcount initiatives, purchasing savings through lean initiatives, and restructuring savings;

◦Commodity cost fluctuations, wage increases and variable employee compensation increases;

◦The non-recurrence of prior year one-time impact of commercial settlements in Asia Pacific;

◦Net manufacturing efficiencies of $45 million, weakened by the ~~consolidation~~impact of a previously unconsolidated joint venture and improved volume and mix, partially offset by unfavorable foreign exchange and customer price reductions. Segment profit for the nine months ended September 30, 2017 increased by $5.0 millionCOVID-19, primarily driven by ~~continuous improvement~~our European, North America and ~~material cost savings, partially offset by customer price reductions, higher engineering costs to support growth in the region and wage inflation.~~Asia Pacific segments.

~~South America.~~ Sales for the nine months ended September 30, 2017 increased $17.3 million, or 28.2%, compared to the nine months ended September 30, 2016, primarily due to improved volume and mix and favorable foreign exchange. Segment loss for the nine months ended September 30, 2017 improved by $5.2 million primarily due to continuous improvement and net material cost savings and improved volume and mix, partially offset by a $3.1 million pre-tax charge for costs associated with a foreign tax amnesty program, of which $0.2 million was paid in cash.

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks

We intend to fund our ongoing working capital, capital expenditures, debt service and other funding requirements through a combination of cash flows from operations, cash on hand, borrowings under our senior asset-based revolving credit facility (“ABL Facility”) and receivables factoring. The Company utilizes intercompany loans and equity contributions to fund its worldwide operations. There may be country-specific regulations which may restrict or result in increased costs in the repatriation of these funds. See Note 7.10. “Debt” to the unaudited condensed consolidated financial statements included in Part 1,I, Item 1 of this Report for additional information.

We continue to take aggressive action to preserve cash and enhance liquidity, including significantly decreasing our capital expenditures. Based on ~~our~~those actions and current ~~and anticipated levels of operations and the condition in our markets and industry,~~projections for increasing OEM customer production, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital, capital expenditures, debt service and other funding requirements for the next twelve ~~months. However,~~months, despite the challenges presented by the COVID-19 pandemic. We continuously monitor and forecast our liquidity situation, take the necessary actions to preserve our liquidity and evaluate other financial alternatives that may be available to us should the need arise. 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 ABL Facility, depend on our future operating performance and cash ~~flow~~flows 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, including the impact of COVID-19, and other factors.

Cash Flows

Operating Activities. Net cash ~~provided by~~used in operations was ~~$104.6~~$26.5 million for the nine months ended September 30, ~~2017,~~2020, compared to ~~$182.0~~net cash provided by operations of $29.9 million for the nine months ended September 30, ~~2016.~~2019. The ~~change~~net outflow was primarily ~~driven by an increase in receivables~~ due to ~~customer payment timing and repurchase of receivables as part of the transition to a pan-European factoring program, increased inventory and higher payments related to incentive compensation,~~decreased cash earnings, partially offset by ~~increased cash earnings and reduced cash paid for restructuring and taxes.~~working capital improvements.

Investing Activities. Net cash used in investing activities was ~~$136.7~~$89.5 million for the nine months ended September 30, ~~2017,~~2020, compared to ~~$150.7~~net cash provided by investing activities of $113.9 million for the nine months ended September 30, ~~2016.~~2019. Significant decreases in capital expenditures occurred throughout 2020, in order to preserve liquidity in response to the COVID-19 pandemic. Additionally, lower capital expenditures are expected in the fourth quarter of 2020. Cash ~~used in~~provided by investing activities in 2019 consisted

primarily of gross proceeds of $243.4 million from the sale of our AVS product line, partially offset by capital ~~spending of $137.4 million and $116.8~~spending.

Financing Activities. Net cash provided by financing activities totaled $225.1 million for the nine months ended September 30, ~~2017 and 2016, respectively. We anticipate that we will spend approximately $165 million~~2020, compared to ~~$175 million on capital expenditures in 2017.~~

~~Financing Activities.~~ ~~Net~~net cash used in financing activities ~~totaled $52.1~~of $78.3 million for the nine months ended September 30, ~~2017, compared~~2019. The inflow was primarily due to ~~$41.3~~proceeds from issuance of the Senior Secured Notes during the nine months ended September 30, 2020. There were no share repurchases during the nine months ended September 30, 2020. Cash used for share repurchases was $36.6 million for the nine months ended September 30, ~~2016. The increase was primarily due to increased repurchase activity under our share repurchase program, certain paydowns of foreign bank loans in 2017 and decreased warrant exercises.~~2019.

Share Repurchase Program

In ~~March 2016,~~June 2018, our Board of Directors approved a ~~securities~~new common stock repurchase program (the ~~“Program”~~“2018 Program”) authorizing us to repurchase, in the aggregate, up to ~~$125~~$150.0 million of our outstanding common ~~stock or warrants to purchase common~~ stock. Under the 2018 Program, repurchases may be made on the open market, or through private transactions, accelerated share repurchases, round lot or block transactions on the New York Stock Exchange or otherwise, as determined by ~~our management~~us and in accordance with prevailing market conditions and federal securities laws and regulations.

In March 2016, we purchased $23.8 million of our common stock (350,000 shares at $68.00 per share) from the Selling Stockholders (as described in Note 15. “Common Stock” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report). In 2017, we repurchased $31.5 million of our common stock (306,072 shares at an average purchase price of $102.76 per share, excluding commissions) in the open market, of which $30.7 million was settled in cash during the nine months ended September 30, 2017. We expect to fund any future repurchases from cash on hand and future cash flows from operations. The specific timing and amount of any future repurchase will vary based on market and business conditions and other factors. We are not obligated to acquire a particular amount of securities, and the 2018 Program may be

discontinued at any time at our discretion. As of September 30, ~~2017,~~2020, we ~~have~~had approximately ~~$69.7~~$98.7 million of repurchase authorization remaining under the 2018 Program. We currently have no plans to repurchase shares in the foreseeable future.

We did not make any repurchases during the nine months ended September 30, 2020.

2019 Repurchases

In May 2019, we entered into an accelerated share repurchase (“ASR”) agreement with a third-party financial institution to repurchase our common stock pursuant to the 2018 Program. Under the ASR agreement, we made an up-front payment of $30.0 million and received an initial delivery of 626,305 shares of our common stock in the second quarter of 2019. The repurchase was completed in the third quarter of 2019 when we received final delivery of an additional 72,875 shares. A total of 699,180 shares were repurchased at a weighted average purchase price of $42.91 per share.

In addition to the repurchase under the ASR agreement, during the nine months ended September 30, 2019, we repurchased 85,000 shares at an average purchase price of $69.85 per share, excluding commissions, for a total cost of $5.9 million.

Non-GAAP Financial Measures

In evaluating our business, management considers EBITDA and Adjusted EBITDA to be 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 significant 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 other 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 is used by management in their assessments of performance and in forecasting and budgeting for our company.

In addition, we believe EBITDA and Adjusted 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 income tax expense (benefit), interest expense, net of interest income, depreciation and amortization or EBITDA, as adjusted for items that management does not consider to be reflective of our core operating performance. These adjustments include, but are not limited to, restructuring costs, impairment charges, non-cash fair value adjustments and acquisition-related costs.

EBITDA and Adjusted EBITDA are not financial measurements recognized under U.S. GAAP, and when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA as a supplement to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, nor as an alternative to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of our results of operations as reported under U.S. GAAP. These limitations include:

•they do not reflect 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 ABL Facility, Term Loan Facility, Senior Notes and Senior Secured Notes;

•they do not reflect certain tax payments that may 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 industry, 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 comparative measure correspondingly decreases.

In addition, in 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 special items.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(dollar amounts in thousands)
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	4,381	$	(4,877)	$	(240,426)	$	134,913
Income tax (benefit) expense	(2,386)		745		(55,485)		47,001
Interest expense, net of interest income	17,985		10,351		40,993		33,858
Depreciation and amortization	36,504		37,495		116,727		111,968
EBITDA	$	56,484	$	43,714	$	(138,191)	$	327,740
Impairment of assets held for sale	—		—		86,470		—
Restructuring charges	6,186		5,572		23,236		29,214
Project costs (1)	—		335		4,234		2,003
Other impairment charges (2)	100		1,958		947		4,146
Lease termination costs (3)	83		512		684		1,003
Gain on sale of business, net (4)	(2,314)		1,730		(2,314)		(188,180)
Divested noncontrolling interest debt extinguishment	3,595		—		3,595		—
Adjusted EBITDA	$	64,134	$	53,821	$	(21,339)	$	175,926

(1)Project costs recorded in selling, administration and engineering expense related to divestitures in 2020 and acquisitions and divestiture costs in 2019.

(2)Non-cash impairment charges of $947 related to fixed assets, net of approximately $293 attributable to our noncontrolling interests for the nine months ended September 30, 2020.

(3)Lease termination costs no longer recorded as restructuring charges in accordance with ASC 842.

(4)Gain on sale of business primarily related to divestitures in 2020. In the third quarter of 2019, there were working capital adjustments to the net gain on sale of business, which related to the divestiture of the AVS product line in 2019.

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(dollar amounts in thousands)
Net income attributable to Cooper-Standard Holdings Inc. $ 24,640
$ 36,362
$ 106,802
$ 107,874
Income tax expense 7,838
12,525
40,258
43,312
Interest expense, net of interest income 10,256
10,114
31,788
29,861
Depreciation and amortization 34,368
31,325
99,413
91,699
EBITDA $ 77,102
$ 90,326
$ 278,261
$ 272,746
Restructuring charges 9,909
10,430
28,220
33,468
Settlement charges ⁽¹⁾
5,902
—
5,902
—
Foreign tax amnesty program ⁽²⁾
3,121
—
3,121
—
Impairment charges ⁽³⁾
—
—
4,270
—
Loss on refinancing and extinguishment of debt ⁽⁴⁾
—
—
1,020
—
Secondary offering underwriting fees and other expenses ⁽⁵⁾
—
—
—
6,500
Other —
—
—
155
Adjusted EBITDA $ 96,034
$ 100,756
$ 320,794
$ 312,869


~~(1)~~	~~Non-cash settlement charges of $5.7 million and administrative fees of $0.2 million relating to the U.K. pension plan.~~


~~(2)~~	~~Relates to indirect taxes recorded in cost of products sold.~~


~~(3)~~	~~Impairment charges related to fixed assets.~~


~~(4)~~	~~Loss on refinancing and extinguishment of debt related to the May 2017 amendment of the Term Loan Facility.~~


~~(5)~~	~~Fees and other expenses associated with the March 2016 secondary offering.~~

Contingencies and Environmental Matters

The information concerning contingencies, including environmental contingencies and the amount currently held in reserve for environmental matters, contained in Note ~~18.~~21. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report, is incorporated herein by ~~references.~~reference.

Recently Issued Accounting Pronouncements

See Note ~~1. “Overview”~~2. “New Accounting Pronouncements” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report.

Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the nine months ended September 30, ~~2017.~~2020.

Forward-Looking Statements

This quarterly report on Form 10-Q 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. Our use of words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “outlook”, “guidance”, “forecast,” or future or conditional verbs, such as “will,” “should,” “could,” “would,” or “may,” and variations of such words or similar expressions are intended to identify

forward-looking statements. All forward-looking statements 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. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties ~~and other factors~~ 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. Among other items, such factors may include: the impact, and expected continued impact, of the recent COVID-19 outbreak on our financial condition and results of operations; significant risks to our liquidity presented by the COVID-19 pandemic risk; prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; competitive threats and commercial risks associated with our diversification strategy through Advanced Technology Group; possible variability of our working capital requirements; risks associated with our international ~~operations;~~operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet ~~customers'~~customers’ needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal proceedings, claims or investigations against us; work stoppages or other labor disruptions; the ability of our intellectual property to withstand legal challenges; cyber-attacks, ordata privacy concerns, other disruptions in, or the inability to implement upgrades to, our information technology systems; the possible volatility of our annual effective tax rate; changes in our assumptions as a result of IRS issuing guidance on the Tax Cuts and Jobs Act; the possibility of a failure to maintain effective controls and procedures; the possibility of future impairment charges to our goodwill and long-lived assets; ~~and~~ our dependence on our subsidiaries for cash to satisfy our obligations.

You should not place undue reliance on these forward-looking statements. WeOur forward-looking statements speak only as of the date of this quarterly report on Form 10-Q, and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This quarterly report on Form 10-Q also contains estimates and other information that is based on industry publications, surveys, and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~There~~Except for the broad effects of COVID-19 on the global economy and major financial markets, which has and could continue to cause interest rates, currency exchange rates and commodity prices to fluctuate, there have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously disclosed in the Company’s ~~2016~~2019 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure 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) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) 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. Based on that evaluation, the Company’s Chief Executive Officer along with the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this Report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, ~~2017~~2020 that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1A.Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, other than as updated in Part II, “Item 1A. Risk Factors,” in our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2020 and June 30, 2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company is authorized to purchase, in the aggregate, up to $150 million of our outstanding common stock under our common stock repurchase program, which was effective in November 2018. As of September 30, 2020, we had approximately $98.7 million of repurchase authorization remaining under our ongoing common stock share repurchase program as discussed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Share Repurchase Program,” and Note ~~15.~~18. “Common Stock” to the unaudited condensed consolidated financial statements included in Part 1,I, Item 1 of this ~~Report, we have approximately $69.7 million of repurchase authorization remaining under our ongoing common stock share repurchase program.~~Report.

A summary of our shares of common stock repurchased during the three months ended September 30, ~~2017~~2020 is shown ~~below~~:below:


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2020 through July 31, 2020	800	$	12.55	—	$	98.7
August 1, 2020 through August 31, 2020	—	—		—	98.7
September 1, 2020 through September 30, 2020	—	—		—	98.7
Total	800			—

(1)Includes shares repurchased by the Company to satisfy employee tax withholding requirements due upon the vesting of restricted stock awards.

Period
Total Number of Shares Purchased⁽¹⁾
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2017 through July 31, 2017 71,671
$ 103.63
71,663
$ 84.5
August 1, 2017 through August 31, 2017 76,038
$ 100.56
76,000
$ 76.8
September 1, 2017 through September 30, 2017 66,003
$ 107.02
66,000
$ 69.7
Total 213,712
$ 103.58
213,663
$ 69.7


~~(1)~~	~~Includes 49 shares repurchased by the Company to satisfy employee tax withholding requirements due upon the vesting of restricted stock awards.~~

Item 6. Exhibits



Exhibit No.
~~Exhibit~~ ~~No.~~	Description of Exhibit

31.1*		Certification of Principal Executive Officer Pursuant to 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 Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).

32**		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH***		Inline XBRL Taxonomy Extension Schema Document

101.CAL***		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF***		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB***		Inline XBRL Taxonomy Label Linkbase Document

101.PRE***		Inline XBRL Taxonomy Extension Presentation Linkbase Document



104***						Cover Page Interactive Data File, formatted in Inline XBRL


*			Filed with this Report.
**			Furnished with this Report.
***			Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

SIGNATURES

Pursuant to the requirements 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.

~~COOPER-STANDARD HOLDINGS INC.~~

November ~~1, 2017~~6, 2020

/S/ JONATHAN P. BANAS

Date

Jonathan P. Banas

Chief Financial Officer

(Principal Financial Officer)

~~INDEX TO EXHIBITS~~



~~Exhibit~~ ~~No.~~		~~Description of Exhibit~~

31.1*		~~Certification of Principal Executive Officer Pursuant to 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 Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).~~

32**		~~Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

101.INS***		~~XBRL Instance Document~~

101.SCH***		~~XBRL Taxonomy Extension Schema Document~~

101.CAL***		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

101.DEF***		~~XBRL Taxonomy Extension Definition Linkbase Document~~

101.LAB***		~~XBRL Taxonomy Label Linkbase Document~~

101.PRE***		~~XBRL Taxonomy Extension Presentation Linkbase Document~~



*	~~Filed with this Report.~~
**	~~Furnished with this Report.~~
~~***~~	~~Submitted electronically with this Report in accordance with the provisions of Regulation S-T.~~



Delaware						20-1945088
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)



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



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



			Page

		PART I. FINANCIAL INFORMATION

Item 1.		Financial Statements (unaudited)
		Condensed Consolidated Statements of ~~Net Income~~Operations	3
		Condensed Consolidated Statements of Comprehensive Income (Loss)	4
		Condensed Consolidated Balance Sheets	5
		Condensed Consolidated ~~Statement~~Statements of Changes in Equity	6
		Condensed Consolidated Statements of Cash Flows	7
		Notes to Condensed Consolidated Financial Statements	8
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	2331
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3143
Item 4.		Controls and Procedures	3144

		PART II. OTHER INFORMATION

Item 1A.		Risk Factors	45
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	3245

Item 6.		Exhibits	3346
SIGNATURES			3447
~~INDEX TO EXHIBITS AND EXHIBITS~~	35



	Gain (Loss) Recognized in AOCI
	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
Forward foreign exchange contracts	$	(763	)	$	854	$	1,860		$	(3,384	)
Interest rate swaps	22			131		(27		)	(2,123		)
Total	$	(741	)	$	985	$	1,833		$	(5,507	)



	September 30, 2017		December 31, 2016
Without recourse	$	62,594	$	56,936
With recourse	5,018		5,258



	Three Months Ended September 30, 2017
	Cumulative currency translation adjustment				Benefit plan liabilities				Fair value change of derivatives				Total
Balance as of June 30, 2017	$	(119,405	)		$	(100,340	)		$	113			$	(219,632	)
Other comprehensive income (loss) before reclassifications	16,047			⁽¹⁾	(1,714		)	⁽²⁾	(619		)	⁽³⁾	13,714
Amounts reclassified from accumulated other comprehensive income (loss)	—				5,677			⁽⁴⁾	(347		)	⁽⁵⁾	5,330
Balance as of September 30, 2017	$	(103,358	)		$	(96,377	)		$	(853	)		$	(200,588	)


~~(1)~~	~~Includes $4,314 of other comprehensive income related to intra-entity foreign currency balances that are of a long-term investment nature.~~


~~(4)~~	~~Includes losses related to the U.K. pension settlement of $6,288 and actuarial losses of $901, offset by prior service credits of $84, net of tax of $1,428. See Note 10.~~



	Three Months Ended September 30, 2016
	Cumulative currency translation adjustment				Benefit plan liabilities				Fair value change of derivatives				Total
Balance as of June 30, 2016	$	(120,780	)		$	(84,595	)		$	(4,766	)		$	(210,141	)
Other comprehensive income (loss) before reclassifications	2,681			⁽¹⁾	(497		)	⁽²⁾	828			⁽³⁾	3,012
Amounts reclassified from accumulated other comprehensive income (loss)	—				348			⁽⁴⁾	1,053			⁽⁵⁾	1,401
Balance as of September 30, 2016	$	(118,099	)		$	(84,744	)		$	(2,885	)		$	(205,728	)


~~(1)~~	~~Includes $511 of other comprehensive income related to intra-entity foreign currency balances that are of a long-term investment nature.~~


~~(4)~~	~~Includes actuarial losses of $555, offset by prior service credits of $79, net of tax of $128. See Note 10.~~



	Nine Months Ended September 30, 2017
	Cumulative currency translation adjustment				Benefit plan liabilities				Fair value change of derivatives				Total
Balance as of December 31, 2016	$	(143,481	)		$	(97,612	)		$	(1,470	)		$	(242,563	)
Other comprehensive income (loss) before reclassifications	40,123			⁽¹⁾	(5,428		)	⁽²⁾	1,242			⁽³⁾	35,937
Amounts reclassified from accumulated other comprehensive income (loss)	—				6,663			⁽⁴⁾	(625		)	⁽⁵⁾	6,038
Balance as of September 30, 2017	$	(103,358	)		$	(96,377	)		$	(853	)		$	(200,588	)


~~(1)~~	~~Includes $10,484 of other comprehensive income related to intra-entity foreign currency balances that are of a long-term investment nature.~~



	Nine Months Ended September 30, 2016
	Cumulative currency translation adjustment				Benefit plan liabilities				Fair value change of derivatives				Total
Balance as of December 31, 2015	$	(130,661	)		$	(84,124	)		$	(2,280	)		$	(217,065	)
Other comprehensive income (loss) before reclassifications	12,562			⁽¹⁾	(1,638		)	⁽²⁾	(3,803		)	⁽³⁾	7,121
Amounts reclassified from accumulated other comprehensive income (loss)	—				1,018			⁽⁴⁾	3,198			⁽⁵⁾	4,216
Balance as of September 30, 2016	$	(118,099	)		$	(84,744	)		$	(2,885	)		$	(205,728	)


~~(1)~~	~~Includes $9,699 of other comprehensive income related to intra-entity foreign currency balances that are of a long-term investment nature.~~


~~(4)~~	~~Includes actuarial losses of $1,636 offset by prior service credits of $246, net of tax of $372. See Note 10.~~



	September 30, 2017		December 31, 2016
Segment assets
North America	$	1,030,321	$	985,809
Europe	648,588		582,385
Asia Pacific	653,688		611,849
South America	57,794		46,125
Eliminations and other	245,205		265,534
Consolidated	$	2,635,596	$	2,491,702



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2017 through July 31, 2017	71,671	$	103.63	71,663	$	84.5
August 1, 2017 through August 31, 2017	76,038	$	100.56	76,000	$	76.8
September 1, 2017 through September 30, 2017	66,003	$	107.02	66,000	$	69.7
Total	213,712	$	103.58	213,663	$	69.7