Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Principles of combination and consolidation | ' |
|
Principles of combination and consolidation – The consolidated financial statements include the accounts of the Company and the wholly-owned and less than wholly-owned subsidiaries controlled by the Company. All material intercompany accounts and transactions have been eliminated. Acquired businesses are included in the consolidated financial statements from the dates of acquisition. |
|
The equity method of accounting is followed for investments in which the Company does not have control, but does have the ability to exercise significant influence over operating and financial policies. Generally this occurs when ownership is between 20% to 50%. The cost method is followed in those situations where the Company’s ownership is less than 20% and the Company does not have the ability to exercise significant influence. |
|
The Company’s investment in Nishikawa Standard Company (“NISCO”), a 40% owned joint venture in the United States, is accounted for under the equity method. This investment is in the Company’s North America segment. This investment totaled $17,424 and $17,162 at December 31, 2012 and 2013, respectively, and is included in other assets in the accompanying consolidated balance sheets. In 2012, the Company received from NISCO a dividend of $800, all of which was related to earnings. In 2013, the Company received from NISCO a dividend of $4,000, consisting of $1,880 related to earnings and a $2,120 return of capital. |
|
The Company’s investment in Guyoung, a 17% owned joint venture in Korea, is accounted for under the cost method. This investment is in the Company’s Asia Pacific segment. This investment totaled $2,014 and $1,886 at December 31, 2012 and 2013, respectively, and is included in other assets in the accompanying consolidated balance sheets. During 2013, the Company sold shares of its investment in Guyoung which decreased the ownership percentage from 20% to 17%. |
|
The Company’s investment in Huayu-Cooper Standard Sealing Systems Co. Ltd. (“Huayu”), a 47.5% owned joint venture in China, is accounted for under the equity method. This investment is in the Company’s Asia Pacific segment. This investment totaled $26,815 and $29,270 at December 31, 2012 and 2013, respectively, and is included in other assets in the accompanying consolidated balance sheets. In 2012, the Company received from Huayu a dividend of $2,519 all of which was related to earnings. In 2013, the Company received from Huayu a dividend of $2,094, all of which was related to earnings. |
|
|
|
The Company’s investment in NISCO Thailand, a 20% owned joint venture in Thailand, is accounted for under the equity method. This investment is in the Company’s Asia Pacific segment. This investment totaled $13,056 and $14,839 at December 31, 2012 and 2013, respectively, and is included in other assets in the accompanying consolidated balance sheets. In 2012, the Company received from NISCO Thailand a dividend of $82, all of which was related to earnings. In 2013, the Company received from NISCO Thailand a dividend of $1,374, all of which was related to earnings. |
|
The Company’s investment in Sujan Barre Thomas AVS Private Limited, a 50% owned joint venture in India, is accounted for under the equity method. This investment is in the Company’s Europe segment. This investment totaled $2,944 and $3,329 at December 31, 2012 and 2013, respectively, and is included in other assets in the accompanying consolidated balance sheets. |
Foreign currency | ' |
Foreign currency – The financial statements of foreign subsidiaries are translated to U.S. dollars at the end-of-period exchange rates for assets and liabilities and at a weighted average exchange rate for each period for revenues and expenses. Translation adjustments for those subsidiaries whose local currency is their functional currency are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Transaction related gains and losses arising from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized in earnings as incurred, except for those intercompany balances which are designated as long-term. |
Cash and cash equivalents | ' |
Cash and cash equivalents – The Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts receivable | ' |
Accounts receivable – The Company records trade accounts receivable when revenue is recorded in accordance with its revenue recognition policy and relieves accounts receivable when payments are received from customers. Generally the Company does not require collateral for its accounts receivable. |
Allowance for doubtful accounts | ' |
Allowance for doubtful accounts – The allowance for doubtful accounts is established through charges to the provision for bad debts when it is probable that the outstanding receivable will not be collected. The Company evaluates the adequacy of the allowance for doubtful accounts on a periodic basis. The evaluation includes historical trends in collections and write-offs, management’s judgment of the probability of collecting accounts and management’s evaluation of business risk. This evaluation is inherently subjective, as it requires estimates that are susceptible to revision as more information becomes available. The allowance for doubtful accounts was $3,727 and $6,317 at December 31, 2012 and 2013, respectively. |
Advertising expense | ' |
Advertising expense – Expenses incurred for advertising are generally expensed when incurred. Advertising expense was $1,463 for 2011, $1,839 for 2012 and $3,059 for 2013. |
Inventories | ' |
Inventories – Inventories are valued at lower of cost or market. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. The Company records inventory reserves for inventory in excess of production and/or forecasted requirements and for obsolete inventory in production. As of December 31, 2012 and 2013, inventories are reflected net of reserves of $20,987 and $19,954, respectively. |
|
| | | | | | | | |
| | December 31, | |
| | 2012 | | | 2013 | |
Finished goods | | $ | 37,415 | | | $ | 48,787 | |
Work in process | | | 32,383 | | | | 38,929 | |
Raw materials and supplies | | | 73,455 | | | | 92,050 | |
| | | | | | | | |
| | $ | 143,253 | | | $ | 179,766 | |
| | | | | | | | |
Derivative financial instruments | ' |
Derivative financial instruments – Derivative financial instruments are utilized by the Company to reduce foreign currency exchange and interest rate risks. The Company has established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities. On the date the derivative is established, the Company designates the derivative as either a fair value hedge, a cash flow hedge, or a net investment hedge in accordance with its established policy. The Company does not enter into financial instruments for trading or speculative purposes. |
Income taxes | ' |
Income taxes – Income tax expense in the consolidated statements of net income is calculated in accordance with ASC Topic 740, Accounting for Income Taxes, which requires the recognition of deferred income taxes using the liability method. |
Deferred tax assets or liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax laws and rates. A valuation allowance is provided on deferred tax assets if the Company determines that it is more likely than not that the asset will not be realized. |
Long-lived assets | ' |
Long-lived assets – Property, plant, and equipment are recorded at cost and depreciated using primarily the straight-line method over their estimated useful lives. Leasehold improvements are amortized over the expected life of the asset or term of the lease, whichever is shorter. Intangibles with finite lives, which include technology and customer relationships, are amortized over their estimated useful lives. The Company evaluates the recoverability of long-lived assets when events and circumstances indicate that the assets may be impaired and the undiscounted net cash flows estimated to be generated by those assets are less than their carrying value. If the net carrying value exceeds the fair value, an impairment loss exists and is calculated based on a discounted cash flow analysis or estimated salvage value. Discounted cash flows are estimated using internal budgets and assumptions regarding discount rates and other factors. |
Pre-Production Costs Related to Long Term Supply Arrangements | ' |
Pre-Production Costs Related to Long Term Supply Arrangements – Costs for molds, dies, and other tools owned by the Company to produce products under long-term supply arrangements are recorded at cost in property, plant, and equipment and amortized over the lesser of three years or the term of the related supply agreement. The amounts capitalized were $2,593 and $2,026 at December 31, 2012 and 2013, respectively. The Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer. Reimbursable tooling costs included in other assets in the accompanying consolidated balance sheets were $3,877 and $13,786 at December 31, 2012 and 2013, respectively. Reimbursable tooling costs are recorded in tooling receivable in the accompanying consolidated balance sheets if considered a receivable in the next twelve months. Tooling receivable for customer-owned tooling for the years ended December 31, 2012 and 2013 was $116,947 and $156,205, respectively, of which $78,403 and $99,687, respectively, was not yet invoiced to the customer. |
Goodwill | ' |
|
Goodwill – Goodwill is not amortized but is tested for impairment, either annually or when events or circumstances indicate that impairment may exist, by reporting unit which is determined in accordance with ASC 350 “Intangibles-Goodwill and Other.” The Company utilizes an income approach to estimate the fair value of each of its reporting units. The income approach is based on projected debt-free cash flow which is discounted to the present value using discount factors that consider the timing and risk of cash flows. The Company believes that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating cash flow performance. Fair value is estimated using recent automotive industry and specific platform production volume projections, which are based on both third-party and internally-developed forecasts, as well as commercial, wage and benefit, inflation and discount rate assumptions. Other significant assumptions include the weighted average cost of capital, terminal value growth rate, terminal value margin rates, future capital expenditures and changes in future working capital requirements. While there are inherent uncertainties related to the assumptions used and to management’s application of these assumptions to this analysis, the Company believes that the income approach provides a reasonable estimate of the fair value of its reporting units. The guideline public company method, a form of the market approach, was used to corroborate the results of the Company’s income approach conclusions. The Company conducts its annual goodwill impairment analysis as of October 1st of each year. |
|
The Company may first assess qualitative factors to determine if it is necessary to perform the two-step goodwill impairment test. The Company also has the option to bypass the qualitative assessment and proceed directly to the first step of the goodwill test. For 2013, the Company decided to bypass the qualitative assessment and proceed directly to the first step of the goodwill impairment test. The first step of the goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value exceeds the carrying value, then the Company concludes that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, the Company would recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value. The 2013 annual goodwill impairment analysis resulted in no impairment. |
Revenue Recognition and Sales Commitments | ' |
|
Revenue Recognition and Sales Commitments – Revenue is recognized when there is evidence of a sales agreement, the delivery of the goods has occurred, the sales price is fixed and deliverable and collectability is reasonably assured. The Company generally enters into agreements with their customers to produce products at the beginning of a vehicle’s life. Although such agreements do not generally provide for minimum quantities, once they enter into such agreements, fulfillment of their customers’ purchasing requirements can be their obligation for an extended period or the entire production life of the vehicle. These agreements generally may be terminated by their customer at any time. Historically, terminations of these agreements have been minimal. In certain limited instances, the Company may be committed under existing agreements to supply products to their customers at selling prices which are not sufficient to cover the direct cost to produce such products. In such situations, they recognize losses as they are incurred. |
|
The Company receives blanket purchase orders from many of its customers on an annual basis. Generally, such purchase orders and related documents set forth the annual terms, including pricing, related to a particular vehicle model. Such purchase orders generally do not specify quantities. The Company recognizes revenue based on the pricing terms included in the annual purchase orders as products are shipped to the customers. As part of certain agreements, the Company is asked to provide its customers with annual cost reductions. The Company accrues for such amounts as a reduction of revenue as products are shipped to the customers. In addition, the Company generally has ongoing adjustments to pricing arrangements with its customers based on the related content and cost of the products. Such pricing accruals are adjusted as they are settled with the customers. |
|
Amounts billed to customers related to shipping and handling are included in sales in the Company’s consolidated statements of net income. Shipping and handling costs are included in cost of sales in the Company’s consolidated statements of net income. |
Research and development | ' |
Research and development – Costs are charged to selling, administration and engineering expenses as incurred and totaled $83,906 for 2011, $94,171 for 2012 and $103,475 for 2013. |
Stock-based compensation | ' |
Stock-based compensation – The Company measures stock-based compensation expense at fair value in accordance with U.S. GAAP and recognizes such expenses over the vesting period of the stock-based employee awards. See Note 18. “Stock-Based Compensation” for additional information. |
Use of estimates | ' |
Use of estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of (1) revenues and expenses during the reporting period and (2) assets and liabilities, as well as disclosure of contingent assets and liabilities, at the date of the financial statements. Actual results could differ from those estimates. |
Reclassifications | ' |
Reclassifications – Certain amounts in prior periods’ financial statements have been reclassified to conform to the current year presentation. In the Company’s balance sheet as of December 31, 2012, $32,616 was reclassified from accounts receivable, net to other current assets to conform to the current period presentation. |
Recent accounting pronouncements | ' |
|
Recent accounting pronouncements |
|
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This ASU requires that a liability related to an unrecognized tax benefit be offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if certain criteria are met. The guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this ASU is not expected to have a material impact on the consolidated financial statements. |
|
In July 2013, the FASB issued ASU 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes. This ASU permits use of the Fed Funds Effective Swap Rate (OIS) as a U.S. benchmark interest rate for hedge accounting purposes and removes the restriction on using different benchmark rates for similar hedges. The guidance is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this ASU had no impact on the consolidated financial statements. |
|
In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU requires companies to present the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income, but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. The guidance is effective for fiscal years beginning after December 15, 2012. The Company adopted this guidance effective January 1, 2013. The effects of adoption were not significant and the additional required disclosures are included in Note 12. “Accumulated Other Comprehensive Income (Loss).” |
|
In July 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-lived Intangible Assets for Impairment. This ASU permits companies to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired before performing the quantitative impairment test. This ASU is effective for fiscal years beginning after September 15, 2012. The Company adopted this guidance effective January 1, 2013. The impact of the adoption of this ASU did not have a material impact on the consolidated financial statements. |
|
In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities, which requires additional disclosures regarding offsetting and related arrangements. The issuance of ASU 2013-01, Balance Sheet (Topic 210): Clarifying the scope of Disclosures about Offsetting Assets and Liabilities, limited the scope of ASU 2011-11 to derivatives, repurchase agreements and securities lending transactions to the extent that they are offset in the financial statements or subject to an enforceable master netting or similar agreement. The provisions of these updates were effective as of January 1, 2013. The adoption of this ASU had no impact on the consolidated financial statements. |