Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-04329 | |
Entity Registrant Name | COOPER TIRE & RUBBER CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 34-4297750 | |
Entity Address, Address Line One | 701 Lima Avenue | |
Entity Address, City or Town | Findlay | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45840 | |
City Area Code | 419 | |
Local Phone Number | 423-1321 | |
Title of 12(b) Security | Common Stock, $1 par value per share | |
Trading Symbol | CTB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 50,282,390 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000024491 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 531,694 | $ 619,163 |
Cost of products sold | 475,781 | 530,904 |
Gross profit | 55,913 | 88,259 |
Selling, general and administrative expense | 51,211 | 56,855 |
Restructuring expense | 10,930 | 4,973 |
Operating (loss) profit | (6,228) | 26,431 |
Interest expense | (5,007) | (8,314) |
Interest income | 1,696 | 3,380 |
Other pension and postretirement benefit expense | (4,210) | (9,362) |
Other non-operating income | 1,773 | 1,380 |
(Loss) Income before income taxes | (11,976) | 13,515 |
Income tax (benefit) provision | (659) | 6,337 |
Net (loss) income | (11,317) | 7,178 |
Net income attributable to noncontrolling shareholders' interests | 274 | 199 |
Net (loss) income attributable to Cooper Tire & Rubber Company | $ (11,591) | $ 6,979 |
(Loss) Earnings per share: | ||
Basic (in dollars per share) | $ (0.23) | $ 0.14 |
Diluted (in dollars per share) | $ (0.23) | $ 0.14 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net (loss) income | $ (11,317) | $ 7,178 |
Other comprehensive (loss) income: | ||
Cumulative currency translation adjustments | (37,794) | 9,307 |
Currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | (37,794) | 9,307 |
Financial instruments: | ||
Change in the fair value of derivatives | (4,111) | (1,121) |
Income tax benefit on derivative instruments | 1,037 | 333 |
Financial instruments, net of tax | (3,074) | (788) |
Postretirement benefit plans: | ||
Amortization of actuarial loss | 8,149 | 9,233 |
Amortization of prior service cost (credit) | 236 | (102) |
Actuarial loss | (31,490) | 0 |
Income tax provision on postretirement benefit plans | 6,039 | (2,041) |
Foreign currency translation effect | 4,708 | (1,460) |
Postretirement benefit plans, net of tax | (12,358) | 5,630 |
Other comprehensive (loss) income | (64,974) | 14,149 |
Comprehensive (loss) income | (76,291) | 21,327 |
Less: Comprehensive (loss) income attributable to noncontrolling shareholders' interests | (270) | 1,178 |
Comprehensive (loss) income attributable to Cooper Tire & Rubber Company | (76,021) | 20,149 |
Noncontrolling Shareholders’ Interests in Consolidated Subsidiaries | ||
Net (loss) income | 274 | 199 |
Other comprehensive (loss) income: | ||
Cumulative currency translation adjustments | (11,748) | 0 |
Currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | $ (11,748) | 0 |
Postretirement benefit plans: | ||
Other comprehensive (loss) income | $ 979 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 433,362 | $ 391,332 |
Notes receivable | 13,676 | 535 |
Accounts receivable, less allowances of $10,449 at 2020 and $8,109 at 2019 | 509,280 | 544,257 |
Inventories: | ||
Finished goods | 356,544 | 326,839 |
Work in process | 24,937 | 28,250 |
Raw materials and supplies | 120,123 | 109,132 |
Total inventories | 501,604 | 464,221 |
Other current assets | 46,224 | 52,635 |
Total current assets | 1,504,146 | 1,452,980 |
Property, plant and equipment: | ||
Land and land improvements | 51,183 | 53,516 |
Buildings | 345,257 | 344,142 |
Machinery and equipment | 2,014,913 | 2,042,578 |
Molds, cores and rings | 262,913 | 262,444 |
Total property, plant and equipment | 2,674,266 | 2,702,680 |
Less: Accumulated depreciation | 1,652,114 | 1,655,438 |
Property, plant and equipment, net | 1,022,152 | 1,047,242 |
Operating lease right-of-use assets, net of accumulated amortization of $32,293 at 2020 and $26,121 at 2019 | 86,878 | 80,752 |
Goodwill | 18,851 | 18,851 |
Intangibles, net of accumulated amortization of $128,403 at 2020 and $123,735 at 2019 | 108,181 | 111,356 |
Deferred income tax assets | 33,162 | 29,336 |
Investment in joint venture | 48,472 | 48,912 |
Other assets | 10,875 | 12,909 |
Total assets | 2,832,717 | 2,802,338 |
Current liabilities: | ||
Short-term borrowings | 277,844 | 12,296 |
Accounts payable | 230,675 | 276,732 |
Accrued liabilities | 208,767 | 302,477 |
Income taxes payable | 2,485 | 2,304 |
Current portion of long-term debt and finance leases | 15,477 | 10,265 |
Total current liabilities | 735,248 | 604,074 |
Long-term debt and finance leases | 301,920 | 309,148 |
Noncurrent operating leases | 61,249 | 55,371 |
Postretirement benefits other than pensions | 227,249 | 227,216 |
Pension benefits | 146,095 | 126,707 |
Other long-term liabilities | 165,102 | 149,065 |
Deferred income tax liabilities | 114 | 3,024 |
Equity: | ||
Preferred stock, $1 par value; 5,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $1 par value; 300,000,000 shares authorized; 87,850,292 shares issued at 2020 and 2019 | 87,850 | 87,850 |
Capital in excess of par value | 15,226 | 22,175 |
Retained earnings | 2,508,052 | 2,524,963 |
Accumulated other comprehensive loss | (512,010) | (447,580) |
Parent stockholders' equity before treasury stock | 2,099,118 | 2,187,408 |
Less: Common shares in treasury at cost (37,567,907 at 2020 and 37,647,058 at 2019) | (921,406) | (922,783) |
Total parent stockholders' equity | 1,177,712 | 1,264,625 |
Noncontrolling shareholders' interests in consolidated subsidiaries | 18,028 | 63,108 |
Total equity | 1,195,740 | 1,327,733 |
Total liabilities and equity | $ 2,832,717 | $ 2,802,338 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 10,449 | $ 8,109 |
Accumulated amortization of operating lease | 32,293 | 26,121 |
Accumulated amortization of intangibles | $ 128,403 | $ 123,735 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 87,850,292 | 87,850,292 |
Treasury stock, shares (in shares) | 37,567,907 | 37,647,058 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities: | ||
Net (loss) income | $ (11,317) | $ 7,178 |
Adjustments to reconcile net income (loss) to net cash used in operations: | ||
Depreciation and amortization | 37,807 | 37,298 |
Stock-based compensation | 390 | 869 |
Change in LIFO inventory reserve | (8,563) | (168) |
Amortization of unrecognized postretirement benefits | 8,385 | 9,131 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable | 11,772 | 2,278 |
Inventories | (41,123) | (81,354) |
Other current assets | (7,848) | (2,170) |
Accounts payable | (20,422) | 2,740 |
Accrued liabilities | (91,414) | (63,228) |
Other items | 7,964 | (8,986) |
Net cash used in operating activities | (114,369) | (96,412) |
Investing activities: | ||
Additions to property, plant and equipment and capitalized software | (54,827) | (59,867) |
Proceeds from the sale of assets | 65 | 38 |
Net cash used in investing activities | (54,762) | (59,829) |
Financing activities: | ||
Issuances of short-term debt | 273,587 | 6,608 |
Repayment of short-term debt | (4,308) | 0 |
Repayment of long-term debt and finance lease obligations | (2,594) | (797) |
Acquisition of noncontrolling shareholder interest | (62,272) | 0 |
Payments of employee taxes withheld from share-based awards | (910) | (1,158) |
Payment of dividends to Cooper Tire & Rubber Company stockholders | (5,277) | (5,262) |
Issuance of common shares related to stock-based compensation | 177 | 0 |
Net cash provided by (used in) financing activities | 198,403 | (609) |
Effects of exchange rate changes on cash | (875) | (1,058) |
Net change in cash, cash equivalents and restricted cash | 28,397 | (157,908) |
Cash, cash equivalents and restricted cash at beginning of period | 413,125 | 378,246 |
Cash, cash equivalents and restricted cash at end of period | 441,522 | 220,338 |
Total cash, cash equivalents and restricted cash | $ 441,522 | $ 220,338 |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. There is typically a year-round demand for the Company's products, however, passenger car and light truck ("light vehicle") replacement tire sales are generally strongest during the third and fourth quarters of the year. Winter tires are sold principally during the months of May through November. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020 . The Company consolidates into its financial statements the accounts of the Company, all wholly-owned subsidiaries, and any partially-owned subsidiary that the Company has the ability to control. Control generally equates to ownership percentage, whereby investments that are more than 50 percent owned are consolidated, investments in affiliates of 50 percent or less but greater than 20 percent are accounted for using the equity method. The Company does not consolidate any entity for which it has a variable interest based solely on power to direct the activities and significant participation in the entity’s expected results that would not otherwise be consolidated based on control through voting interests. Further, the Company’s joint ventures are businesses established and maintained in connection with the Company’s operating strategy. All intercompany transactions and balances have been eliminated. On April 5, 2019, Cooper Tire & Rubber Company Vietnam Holding, LLC ("Cooper Vietnam"), a wholly owned subsidiary of the Company, and Sailun (Vietnam) Co., Ltd. ("Sailun Vietnam") established a joint venture in Vietnam, ACTR Company Limited ("ACTR"), which will produce and sell truck and bus radial ("TBR") tires. The Company’s investment in the joint venture represents a 35 percent ownership interest and is accounted for under the equity method. The Company invested $49,001 into the joint venture in 2019. The new joint venture is expected to begin commercially producing tires in 2020. Earnings per common share – Net income per share is computed on the basis of the weighted average number of common shares outstanding each period. When applicable, diluted earnings per share includes the dilutive effect of stock options and other stock units. The following table sets forth the computation of basic and diluted earnings per share: (Number of shares and dollar amounts in thousands except per share amounts) Three Months Ended March 31, 2020 2019 Numerator Numerator for basic and diluted earnings per share - income from continuing operations available to common stockholders $ (11,591 ) $ 6,979 Denominator Denominator for basic earnings per share - weighted average shares outstanding 50,236 50,100 Effect of dilutive securities - stock options and other stock units — 278 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 50,236 50,378 (Loss) Earnings per share: Basic $ (0.23 ) $ 0.14 Diluted (0.23 ) 0.14 Anti-dilutive shares excluded from computation of diluted loss per share 294 — Anti-dilutive shares are excluded from the computation of earnings per share at March 31, 2020 , as the inclusion of such items would decrease loss per share. All stock options and other stock units outstanding were included in the computation of diluted earnings per share at March 31, 2019 . Tariffs - The Company is subject to tariffs on the import of tires, raw materials and tire-manufacturing equipment in certain of the jurisdictions in which it operates. Tariff costs are included within inventory as they pertain to tires and raw materials, while tariffs on tire-manufacturing equipment are included as part of the cost of fixed assets. Material components of the Company's tariff costs include: • Passenger Car and Light Truck Tire Tariffs - Antidumping and countervailing duty investigations into certain passenger car and light truck tires imported from the PRC into the United States were initiated on July 14, 2014. The determinations announced in both investigations were affirmative and resulted in the imposition of significant additional duties from each. The rates are subject to review annually and a material change in the new rates could have a significant impact on the Company's results. • Truck and Bus Tire Tariffs – Antidumping and countervailing duty investigations into certain TBR tires imported from the PRC into the U.S. were initiated on January 29, 2016. On February 22, 2017, the International Trade Commission ("ITC") made a final determination that the U.S. market had not suffered material injury because of imports of TBR tires from the PRC. However, on November 1, 2018, the Court of International ("CIT") remanded the case back to the ITC for reconsideration. On January 30, 2019, the ITC reversed its earlier decision and made an affirmative determination of material injury. On February 15, 2019, the determination was published in the Federal Register and countervailing duties of 42.16 percent were imposed on the Company's TBR tire imports into the U.S. from China. The ITC’s re-determination, along with comments from the parties regarding the re-determination, were filed with the CIT. The CIT affirmed the ITC re-determination on February 18, 2020. The rates are subject to review annually and a material change in the new rates could have a significant impact on the Company's results. • Section 301 Tariffs - Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, passenger, light truck and truck and bus tires, raw materials and tire-manufacturing equipment from the PRC imported into the U.S. became subject to additional 10 percent duties effective September 24, 2018. These tariffs increased to 25 percent effective May 10, 2019. • Duty Drawbacks - The enactment in December 2018 of the Modernized Drawback Final Rule under the Trade Enforcement and Trade Facilitation Act of 2015 expanded the Company's ability to recover Section 301 and Ad Valorem duties paid on goods imported into the US when such goods, or similar items, are subsequently exported. Recent Accounting Pronouncements Each change to U.S. GAAP is established by the Financial Accounting Standards Board (“FASB”) in the form of an accounting standards update (“ASU”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. Accounting Pronouncements – Recently adopted Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. Such modifications to disclosures center around Level 3 fair value measurements and investments in entities that calculate net asset value. This standard is effective for interim and annual reporting periods beginning after December 15, 2019 and has been adopted by the Company effective January 1, 2020. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Internal-Use Software In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard is effective for interim and annual reporting periods beginning after December 15, 2019 and has been adopted prospectively by the Company effective January 1, 2020. Capitalization of implementation costs incurred in a service contract hosting arrangement affects Intangibles, net of accumulated amortization, Cost of products sold, and Selling, general, and administrative expense within the condensed consolidated financial statements. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Accounting for Income Taxes On December 18, 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," to, among other provisions, eliminate certain exceptions related to intra-period tax allocation and loss benefit limitations in interim periods, as well as certain rules pertaining to deferred taxes for equity method investees. This ASU also simplifies rules pertaining to franchise taxes and other taxes partially based on income, and changes the timing of when an entity recognizes effects of enacted tax law changes. This standard becomes effective in fiscal years beginning after December 15, 2020; however, the Company has chosen to early adopt in the period ended March 31, 2020. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Accounting Pronouncements – To be adopted Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, "Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. For example, disclosures around the effect of a one-percentage-point change in assumed health care costs will be removed and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period will be added. This standard is effective for fiscal years ending after December 15, 2020, and early adoption is permitted. These amendments must be applied on a retrospective basis for all periods presented. The Company is currently evaluating the impact the new standard will have on its condensed consolidated financial statements . Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)," which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard and the impact it will have on the condensed consolidated financial statements . |
COVID-19
COVID-19 | 3 Months Ended |
Mar. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 | COVID-19 In March 2020, the World Health Organization categorized Coronavirus Disease 2019 (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The Company’s priorities during the COVID-19 pandemic are protecting the health and safety of its employees, responsibilities to our broader communities, and commitments to our customers and other key stakeholders. The Company’s condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse accounting impacts on the Company’s first quarter 2020 results of operations. Given the dynamic nature of the COVID-19 pandemic and related market conditions, the Company cannot reasonably estimate the period of time that these events will persist or the full extent of the impact they will have on the business. The Company continues to take actions designed to mitigate the adverse effects of this rapidly changing market environment. On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) which includes modifications to the limitation on business interest expense and net operating loss provisions, and provides a payment delay of employer payroll taxes during 2020 after the date of enactment. The Company's payment of employer payroll taxes after enactment otherwise due in 2020 will be delayed, with 50 percent due by December 31, 2021, and the remaining 50 percent by December 31, 2022. The Company continues to evaluate the potential applicability and related impact of the CARES Act. The CARES Act did not have a material impact on the Company’s condensed consolidated financial statements as of March 31, 2020. |
Current Expected Credit Losses
Current Expected Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Current Expected Credit Losses | Current Expected Credit Losses In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments," which changes accounting requirements for the recognition of credit losses from an incurred or probable impairment methodology to a current expected credit losses (CECL) methodology. This standard is effective for interim and annual reporting periods beginning after December 15, 2019 and was adopted effective January 1, 2020. Trade receivables (including the allowance for credit losses) is the only financial instrument in scope for ASU 2016-13 currently held by the Company. In implementing the standard, the Company amended its policy to utilize an expected loss methodology based on credit risk in place of the incurred loss methodology based on aging. The Company's updated policy includes the regular review of its outstanding accounts receivable portfolio to assess risk and likelihood of credit loss. This review includes consideration of potential credit loss over the asset's contractual life, along with historical experience, current conditions and forecasts based on management's judgment. The Company also performs periodic credit evaluations of customers’ financial conditions in order to assess credit worthiness and maintain appropriate credit limits. Accounts receivable, net of the allowance for credit losses, are $509,280 and $544,257 as of March 31, 2020 and December 31, 2019 , respectively. The Company recorded provisions for credit losses for receivables of $10,449 and $8,109 for the same periods. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Restructuring | Restructuring Corporacion de Occidente SA de CV On January 24, 2020, the Company acquired the remaining 41.57 percent noncontrolling ownership interest in Corporacion de Occidente SA de CV ("COOCSA"), making COOCSA a wholly-owned subsidiary in the Americas Segment. In this transaction, the Company acquired the remaining outstanding voting common stock of COOCSA for a total cash price of $54,500 . In addition, subsequent to the acquisition, payments of $15,984 were made to members of the prior joint venture workforce in connection with services rendered. In accordance with ASC 810, "Consolidation", the excess of the purchase price over the non-controlling shareholder interest was recorded as a decrease to Capital in excess of par value to reflect the additional ownership. Payments to members of the joint venture workforce in connection with services rendered included $7,772 paid to members that were also shareholders of the non-controlling interest. This amount was also treated as part of the overall purchase price under ASC 810. In addition to the payments made to the joint venture workforce for services rendered, the Company also incurred $2,712 of other costs associated with the transaction. For the quarter ended March 31, 2020 , the Company incurred restructuring expense of $10,930 comprised of: Three Months Ended March 31, 2020 Joint venture workforce services rendered $ 8,218 Professional and other costs 2,712 Total restructuring expense $ 10,930 At March 31, 2020 , the Company's accrued restructuring balance is $300 , composed of accrued professional and other costs. The Company does not anticipate further restructuring costs related to this transaction in 2020. Cooper Tire Europe On January 17, 2019, Cooper Tire Europe, a wholly owned subsidiary of the Company, committed to a plan to cease light vehicle tire production at its Melksham, U.K. facility, which is included in the International Segment. The phasing out of light vehicle tire production was substantially completed in the third quarter of 2019. Approximately 300 roles were eliminated at the site. Cooper Tire Europe now obtains light vehicle tires to meet customer needs from other production sites within the Company’s global production network. Approximately 400 roles remain in Melksham to support the functions that continue there, including motorsports and motorcycle tire production, a materials business, Cooper Tire Europe headquarters, sales and marketing, and the Europe Technical Center. Costs related to the decision to cease light vehicle tire production at the Melksham, U.K. facility were $4,973 for the quarter ended March 31, 2019 and $8,315 for the full year ended December 31, 2019. In connection with this business realignment, a one-time payment from the U.S. to Serbia was made during the fourth quarter of 2019 in order to allow the Serbian operations to improve their financial standing and serve as a reliable and fully operational contract manufacturer for the U.S. Three Months Ended March 31, 2019 Melksham employee severance costs $ 4,163 Asset write-downs & other costs 810 Total restructuring expense $ 4,973 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Accounting policy Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives or rebates. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. This occurs with shipment or delivery, depending on the underlying terms with the customer. The transaction price will include estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. At the time of sale, the Company estimates provisions for different forms of variable consideration (discounts and rebates) based on historical experience, current conditions and contractual obligations, as applicable. Payment terms with customers vary by region and customer, but are generally 30-90 days. The Company does not have significant financing components or significant payment terms. Incidental items that are immaterial in the context of the contract are expensed as incurred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and not as a separate performance obligation. Therefore, such items are accrued upon recognition of revenue. Nature of goods and services The following is a description of principal activities, separated by reportable segments, from which the Company generates its revenue. See Note 15 - Business Segments for additional details on the Company's reportable segments. The Company’s reportable segments have the following revenue characteristics: • Americas Tire Operations - The Americas Tire Operations segment manufactures and markets passenger car and light truck tires. The segment also markets and distributes racing, motorcycle and TBR tires. • International Tire Operations - The International Tire Operations segment manufactures and markets passenger car, light truck, motorcycle, racing and TBR tires and tire retread material for global markets. Disaggregation of revenue In the following tables, revenue is disaggregated by major market channel for the three months ended March 31, 2020 and 2019 , respectively: Three Months Ended March 31, 2020 Americas International Eliminations Total Light Vehicle (1) $ 404,636 $ 71,082 $ (10,714 ) $ 465,004 Truck and bus radial 41,004 17,309 (17,034 ) 41,279 Other (2) 11,415 13,996 — 25,411 Net sales $ 457,055 $ 102,387 $ (27,748 ) $ 531,694 Three Months Ended March 31, 2019 Americas International Eliminations Total Light Vehicle (1) $ 454,014 $ 105,320 $ (19,322 ) $ 540,012 Truck and bus radial 50,086 23,696 (20,236 ) 53,546 Other (2) 10,836 14,769 — 25,605 Net sales $ 514,936 $ 143,785 $ (39,558 ) $ 619,163 (1) Light vehicle includes passenger car and light truck tires (2) Other includes motorcycle and racing tires, wheels, tire retread material, and other items Contract balances Contract liabilities relate to customer payments received in advance of shipment. As the Company does not generally have rights to consideration for work completed but not billed at the reporting date, the Company does not have any contract assets. Accounts receivable are not considered contract assets under the revenue standard as contract assets are conditioned upon the Company's future satisfaction of a performance obligation. Accounts receivable, in contrast, are unconditional rights to consideration. Significant changes in the contract liabilities balance during the three months ended March 31, 2020 are as follows: Contract Liabilities Contract liabilities at beginning of year $ 1,080 Increases to deferred revenue for cash received in advance from customers 1,813 Decreases due to recognition of deferred revenue (1,440 ) Contract liabilities at March 31, 2020 $ 1,454 Transaction price allocated to remaining performance obligations For the three months ended March 31, 2020 and 2019 , revenue recognized from performance obligations related to prior periods is not material . Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material . The Company applies the practical expedient in ASC 606 "Revenue from Contracts with Customers" and does not disclose information about remaining performance obligations that have original expected durations of one year or less. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventory costs are determined using the last-in, last-out ("LIFO") method for substantially all U.S. inventories. The current cost of the U.S. inventories under the FIFO method was $411,466 and $365,585 at March 31, 2020 and December 31, 2019 , respectively. These FIFO values have been reduced by approximately $79,053 and $87,616 at March 31, 2020 and December 31, 2019 , respectively, to arrive at the LIFO value reported on the Condensed Consolidated Balance Sheets . The remaining inventories have been valued under the FIFO method. All LIFO inventories are valued at the lower of cost or market. All other inventories are stated at the lower of cost or net realizable value. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes For the three month period ended March 31, 2020 , the Company recorded income tax benefit of $659 (effective tax rate of negative 5.5 percent ) compared to an income tax provision of $6,337 (effective tax rate of 46.9 percent ) for the same period in 2019 . The 2020 and 2019 three month period (benefit) provision for income tax is calculated using a forecasted multi-jurisdictional annual effective tax rate to determine a blended annual effective tax rate. The Company is subject to the U.S. federal statutory rate of 21 percent. The effective tax rate for the three month period ended March 31, 2020 was influenced by $4,361 of additional unrecognized tax benefit related to the tax deductibility of certain business expenses incurred during the quarter, the projected mix of earnings in international jurisdictions with differing tax rates and jurisdictions where valuation allowances are recorded. The effective tax rate for the three month period ended March 31, 2019 includes net discrete tax expense of $2,417 recorded during the quarter, which primarily consist of additional 2017 transition tax and unrecognized tax benefits as a result of final U.S. federal tax guidance issued during the quarter pertaining to the one-time mandatory deemed repatriation under the 2017 Tax Act. The Company continues to maintain valuation allowances pursuant to ASC 740, “Accounting for Income Taxes,” against portions of its U.S. and non-U.S. deferred tax assets at March 31, 2020 as it cannot assure the future realization of the associated tax benefits prior to their reversal or expiration. In the U.S., the Company has offset its net operating loss carryforward deferred tax asset by a valuation allowance of $1,378 . In addition, the Company has recorded valuation allowances of $24,467 related to non-U.S. net operating losses and other deferred tax assets for a total valuation allowance of $25,845 . In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company will continue to reassess the possibility of releasing all or part of the valuation allowances currently in place when the associated deferred tax assets are deemed to be realizable. If the evidence suggests that deferred tax assets for these operations will more likely than not be able to be realized in the future, release of a portion or all of the valuation allowance in place for these entities could occur. Such release could materially impact the Company's effective tax rate in the period in which the release occurs. The Company maintains an ASC 740-10, “Accounting for Uncertainty in Income Taxes,” liability for unrecognized tax benefits. At March 31, 2020 , the Company’s liability, exclusive of penalty and interest, totals approximately $14,532 . The Company accrued $4,361 of additional unrecognized tax benefit related to the tax deductibility of certain business expenses incurred and an immaterial amount of interest expense during the three month period ended March 31, 2020 . Based upon the outcome of tax examinations, judicial proceedings, or expiration of statutes of limitations, it is possible that the ultimate resolution of the Company's unrecognized tax benefits may result in a payment that is materially different from the current estimate of the tax liabilities. The Company operates in multiple jurisdictions throughout the world. The Company has effectively settled U.S. federal tax examinations for tax years before 2016 and state and local examinations for tax years before 2012 , with limited exceptions. Furthermore, the Company’s non-U.S. subsidiaries are generally no longer subject to income tax examinations in major foreign taxing jurisdictions for tax years prior to 2014 . Certain of the Company's state income tax returns in various jurisdictions are currently under examination and it is possible that these examinations will conclude within the next twelve months. However, it is not possible to estimate net increases or decreases in the Company’s unrecognized tax benefits related to these exams during the next twelve months. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt On June 27, 2019, the Company amended its revolving credit facility ("Credit Facility") with a consortium of several banks that provides up to $700,000 and is set to expire in June 2024 . Of this amended borrowing capacity, $200,000 was allocated to a Delayed Draw Term Loan A ("Term Loan A"), while the remaining $500,000 was allocated to the Credit Facility. The Term Loan A funds were drawn in December 2019 and used primarily to pay for the unsecured notes which matured at that time. The Credit Facility also includes a $110,000 letter of credit sub-facility. The Company may elect, with lender consent, to increase the commitments under the Credit Facility or incur one or more tranches of term loans in an aggregate amount of up to $300,000 (or an unlimited increase if the Proforma Secured Net Leverage Ratio is less than 1.75 x). The Company may elect to add certain foreign subsidiaries as additional borrowers under the Credit Facility, subject to the satisfaction of certain conditions. On July 11, 2019 , the Company entered into forward-starting interest rate swaps to effectively hedge the cash flow exposure associated with the Company's Term Loan A variable-rate borrowings. See Note 9 - Fair Value Measurement for further information. The Company has an accounts receivable securitization facility that provides up to $150,000 based on available collateral and expires in February 2021 . Pursuant to the terms of the facility, the Company is permitted to sell certain of its domestic trade receivables on a continuous basis to its wholly-owned, bankruptcy-remote subsidiary, Cooper Receivables LLC (“CRLLC”). In turn, CRLLC may sell an undivided ownership interest in the purchased trade receivables, without recourse, to a PNC Bank administered, asset-backed commercial paper conduit. The accounts receivable securitization facility has no significant financial covenants until available credit is less than specified amounts. At March 31, 2020, $250,000 of the available Credit Facility and $20,000 of the accounts receivable securitization facility were drawn to provide funds for working capital and general corporate purposes. The Company had no borrowings under the revolving credit facility or the accounts receivable securitization facility at December 31, 2019 . Amounts used to secure letters of credit totaled $21,490 at March 31, 2020 and $21,651 at December 31, 2019 . The Company’s additional borrowing capacity, net of borrowings and amounts used to back letters of credit, and based on eligible collateral through use of its credit facility with its bank group and its accounts receivable securitization facility at March 31, 2020 , was $308,310 . The Company’s consolidated operations in Asia have renewable unsecured credit lines that provide up to $46,238 of borrowings and do not contain financial covenants. The additional borrowing capacity on the Asian credit lines, based on eligible collateral and the short-term notes payable, totaled $38,394 at March 31, 2020 . The following is a summary of the Company's debt and finance leases as of March 31, 2020 and December 31, 2019 . Principal Balance Weighted Average Interest Rate Principal Balance Weighted Average Interest Rate Current Long-Term Current Long-Term Maturity Date March 31, 2020 December 31, 2019 Secured revolver June, 2024 $ 250,000 $ — 3.083% $ — $ — n/a AR securitization February, 2021 20,000 — 1.918% — — n/a Asia short term notes Various maturities 7,844 — 4.656% 12,296 — 4.701% 277,844 — 12,296 $ — Term loan A June, 2024 10,000 185,000 2.615% 10,000 187,500 3.300% Unsecured notes March, 2027 — 116,880 7.625% — 116,880 7.625% Finance leases and other Various maturities 5,477 1,213 5.431% 265 5,998 2.613% 15,477 303,093 10,265 310,378 Less, Unamortized debt issuance costs — 1,173 — 1,230 $ 293,321 $ 301,920 $ 22,561 $ 309,148 Additional Credit Capacity Secured revolver $ 250,000 AR securitization 130,000 Asia short term notes 38,394 418,394 Less, amounts used to secure letters of credit and other unavailable funds 71,690 $ 346,704 The Company’s revolving credit facilities contain restrictive covenants which limit or preclude certain actions based upon the measurement of certain financial covenant metrics. However, the covenants are structured such that the Company expects to have sufficient flexibility to conduct its operations. The Company was in compliance with all of its debt covenants as of March 31, 2020 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Derivative financial instruments are utilized by the Company to reduce foreign currency exchange risks. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. The Company does not enter into financial instruments for trading or speculative purposes. The derivative financial instruments include non-designated and cash flow hedges of foreign currency exposures. The change in values of the non-designated foreign currency hedges offset the exchange rate fluctuations related to assets and liabilities recorded on the Condensed Consolidated Balance Sheets. The cash flow hedges offset exchange rate fluctuations on the foreign currency-denominated intercompany loans and forecasted cash flows. The Company presently hedges exposures in various currencies, generally for transactions expected to occur within the next 12 months . Additionally, the Company utilizes cash flow hedges that hedge already recognized intercompany loans with maturities of up to two years . The notional amount of these foreign currency derivative instruments at March 31, 2020 and December 31, 2019 was $154,165 and $167,915 , respectively. The counterparties to each of these agreements are major commercial banks. The Company uses non-designated foreign currency forward contracts to hedge its net foreign currency monetary assets and liabilities primarily resulting from non-functional currency denominated receivables and payables of certain U.S. and foreign entities. Foreign currency forward contracts are also used to hedge variable cash flows associated with forecasted sales and purchases denominated in currencies that are not the functional currency of certain entities. The forward contracts have maturities of less than twelve months pursuant to the Company’s policies and hedging practices. These forward contracts meet the criteria for and have been designated as cash flow hedges. Accordingly, the effective portion of the change in fair value of such forward contracts of $3,014 and $(1,033) as of March 31, 2020 and December 31, 2019 , respectively, are recorded as a separate component of stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets and reclassified into earnings as the hedged transactions occur. The Company utilizes cross-currency interest rate swaps to hedge the principal and interest repayment of some intercompany loans. The Company also utilizes designated foreign currency forward contracts to hedge the principal amounts of certain intercompany loans. The fair value of these contracts is $(698) and $(994) at March 31, 2020 and December 31, 2019 , respectively. These contracts have maturities of up to two years and meet the criteria for and have been designated as cash flow hedges. Spot to spot changes are recorded in income and all other effective changes are recorded as a separate component of stockholders' equity. The Company assesses hedge effectiveness prospectively and retrospectively, based on regression of the change in foreign currency exchange rates. Time value of money is included in effectiveness testing. On July 11, 2019 , in order to hedge its Term Loan A variable rate debt, with an interest rate indexed to LIBOR plus 150 basis points, the Company entered into forward-starting interest rate swaps with effective dates of December 2, 2019 and termination dates of June 27, 2024. The initial notional amount of these swaps is $200,000 and decreases quarterly by varying amounts over the life of the swaps, in accordance with the Term Loan A repayment schedule. The net quarterly payments made for the period ended as of March 31, 2020 were immaterial . The interest rate swaps effectively fix the variable interest rate component on the notional amount of these swaps at 1.720% . The swaps qualify for hedge accounting and, therefore, changes in the fair value of the swaps have been recorded in accumulated other comprehensive income in the amount of $(9,211) and $(1,032) at March 31, 2020 and December 31, 2019. The Company assesses hedge effectiveness prospectively and retrospectively, based on regression of the period to period change in swap and hedged item values. The derivative instruments are subject to master netting arrangements with the counterparties to the contracts. The following table presents the location and amounts of derivative instrument fair values in the Condensed Consolidated Balance Sheets : Assets/(liabilities) March 31, 2020 December 31, 2019 Designated as hedging instruments: Gross amounts recognized $ (10,135 ) $ (3,208 ) Gross amounts offset 3,240 149 Net amounts $ (6,895 ) $ (3,059 ) Not designated as hedging instruments: Gross amounts recognized $ (645 ) $ (1,118 ) Gross amounts offset 65 76 Net amounts $ (580 ) $ (1,042 ) Net amounts presented: Accrued liabilities $ (302 ) $ (2,420 ) Other long-term liabilities (7,173 ) (1,681 ) The following table presents the location and amount of gains and losses on derivative instruments designated as cash flow hedges in the Condensed Consolidated Statements of Operations : Three Months Ended March 31, 2020 2019 Amount of Loss Recognized in Other Comprehensive Income on Derivatives $ (3,601 ) $ (1,183 ) Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Net sales $ 180 $ 399 Interest expense (30 ) (32 ) Other non-operating income 360 (429 ) $ 510 $ (62 ) The following table presents the location and amount of losses on foreign exchange contract derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Operations . Three Months Ended March 31, 2020 2019 Other non-operating income (expense) $ 6,248 $ (1,006 ) The Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into the three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within the different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities recorded on the Condensed Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows: Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access. Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following. a. Quoted prices for similar assets or liabilities in active markets; b. Quoted prices for identical or similar assets or liabilities in non-active markets; c. Pricing models whose inputs are observable for substantially the full term of the asset or liability; and d. Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability. Level 3. Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. The valuation of foreign currency derivative instruments was determined using widely accepted valuation techniques. This analysis reflected the contractual terms of the derivatives, including the period to maturity, and used observable market-based inputs, including forward points. The Company incorporated credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. Although the Company determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as current credit ratings, to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2020 and December 31, 2019 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety were to be classified in Level 2 of the fair value hierarchy. The valuation of stock-based liabilities was determined using the Company's stock price, and as a result, these liabilities are classified in Level 1 of the fair value hierarchy. The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 : March 31, 2020 Total (Liabilities) Quoted Prices Significant Significant Foreign Currency Derivative $ 1,736 $ — $ 1,736 $ — Interest Rate Swaps (9,211 ) — (9,211 ) — Stock-based Liabilities (9,600 ) (9,600 ) — — December 31, 2019 Total Liabilities Quoted Prices in Active Markets for Identical Assets Level (1) Significant Other Observable Inputs Level (2) Significant Unobservable Inputs Level (3) Foreign Currency Derivative $ (3,069 ) $ — $ (3,069 ) $ — Interest Rate Swaps (1,032 ) — (1,032 ) — Stock-based Liabilities (14,971 ) (14,971 ) — — The fair value of Cash and cash equivalents , Notes receivable , restricted cash included in Other current assets , Short-term borrowings and Current portion of long-term debt and finance leases at March 31, 2020 and December 31, 2019 are equal to their corresponding carrying values as reported on the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 , respectively. Each of these classes of assets and liabilities is classified within Level 1 of the fair value hierarchy. The fair value of Long-term debt and finance leases is $307,547 and $292,719 at March 31, 2020 and December 31, 2019 , respectively, and is classified within Level 1 of the fair value hierarchy. The carrying value of Long-term debt is $301,920 and $309,148 as reported on the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 , respectively. |
Pensions and Postretirement Ben
Pensions and Postretirement Benefits Other than Pensions | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Pensions and Postretirement Benefits Other than Pensions | Pensions and Postretirement Benefits Other than Pensions The following tables disclose the amount of net periodic benefit costs for the three months ended March 31, 2020 and 2019 , respectively, for the Company’s defined benefit plans and other postretirement benefits: Pension Benefits - Domestic Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Service cost $ 2,497 $ 2,244 Interest cost 8,308 9,875 Expected return on plan assets (14,194 ) (11,990 ) Amortization of actuarial loss 7,221 8,284 Amortization of prior service cost 192 — Net periodic benefit cost $ 4,024 $ 8,413 Pension Benefits - International Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Interest cost $ 2,099 $ 2,821 Expected return on plan assets (2,218 ) (2,947 ) Amortization of actuarial loss 1,034 949 Amortization of prior service cost 66 — Net periodic benefit cost $ 981 $ 823 Other Post Retirement Benefits Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Service cost $ 360 $ 393 Interest cost 1,830 2,472 Amortization of actuarial gain (106 ) (102 ) Amortization of prior service credit (22 ) — Net periodic benefit cost $ 2,062 $ 2,763 At March 31, 2020 , an amendment to a domestic pension plan resulted in a retroactive increase in benefit levels for plan participants and has been accounted for as a prior service cost deferred in Other comprehensive loss, to be amortized as a component of net periodic benefit cost in future periods. The domestic pension plan projected benefit obligation increased $2,582 as a result of the amendment as of March 31, 2020 . |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The following tables provide a quarterly reconciliation of the equity accounts attributable to Cooper Tire & Rubber Company and to the noncontrolling shareholders' interests for the year to date as of March 31, 2020 and 2019 : Common Stock $1 Par Value Capital in Excess of Par Value Retained Earnings Cumulative Other Comprehensive Loss Common Shares in Treasury Total Parent Stockholders’ Equity Noncontrolling Shareholders’ Interests in Consolidated Subsidiary Total Stockholders’ Equity Balance at December 31, 2019 $ 87,850 $ 22,175 $ 2,524,963 $ (447,580 ) $ (922,783 ) $ 1,264,625 $ 63,108 $ 1,327,733 Net (loss) income — — (11,591 ) — — (11,591 ) 274 (11,317 ) Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest — — — (52,682 ) — (52,682 ) (544 ) (53,226 ) Stock compensation plans — (1,235 ) (43 ) — 1,377 99 — 99 Cash dividends - 0.105 per share — (5,277 ) — — (5,277 ) — (5,277 ) Acquisition of noncontrolling shareholders' interest — (5,714 ) — (11,748 ) — (17,462 ) (44,810 ) (62,272 ) Balance at March 31, 2020 $ 87,850 $ 15,226 $ 2,508,052 $ (512,010 ) $ (921,406 ) $ 1,177,712 $ 18,028 $ 1,195,740 Common Stock $1 Par Value Capital in Excess of Par Value Retained Earnings Cumulative Other Comprehensive (Loss) Income Common Shares in Treasury Total Parent Stockholders’ Equity Noncontrolling Shareholders’ Interests in Consolidated Subsidiary Total Stockholders’ Equity Balance at December 31, 2018 $ 87,850 $ 21,124 $ 2,449,714 $ (461,589 ) $ (925,056 ) $ 1,172,043 $ 60,400 $ 1,232,443 Net income — — 6,979 — — 6,979 199 7,178 Other comprehensive income — — — 13,170 — 13,170 979 14,149 Stock compensation plans — (1,579 ) (64 ) — 1,353 (290 ) — (290 ) Cash dividends - 0.105 per share — — (5,262 ) — — (5,262 ) — (5,262 ) Balance at March 31, 2019 $ 87,850 $ 19,545 $ 2,451,367 $ (448,419 ) $ (923,703 ) $ 1,186,640 $ 61,578 $ 1,248,218 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) by Component | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | Changes in Accumulated Other Comprehensive Income (Loss) by Component The following tables provide a quarterly reconciliation of each component of accumulated other comprehensive (loss) income in the accompanying schedule of Accumulated other comprehensive loss: Cumulative Translation Adjustment Derivative Instruments Post- retirement Benefits Total Ending Balance, December 31, 2019 $ (58,186 ) $ (549 ) $ (388,845 ) $ (447,580 ) Other comprehensive (loss) income before reclassifications (48,998 ) (3,601 ) (31,490 ) (84,089 ) Foreign currency translation effect — — 4,708 4,708 Income tax effect — 984 7,857 8,841 Amount reclassified from accumulated other comprehensive (loss) income Cash flow hedges — (510 ) — (510 ) Amortization of prior service credit — — 236 236 Amortization of actuarial losses — — 8,149 8,149 Income tax effect — 53 (1,818 ) (1,765 ) Other comprehensive loss (48,998 ) (3,074 ) (12,358 ) (64,430 ) Ending Balance, March 31, 2020 $ (107,184 ) $ (3,623 ) $ (401,203 ) $ (512,010 ) Cumulative Translation Adjustment Derivative Instruments Post- retirement Benefits Total Ending Balance, December 31, 2018 $ (62,133 ) $ 2,150 $ (401,606 ) $ (461,589 ) Other comprehensive income (loss) before reclassifications 8,328 (1,183 ) — 7,145 Foreign currency translation effect — — (1,460 ) (1,460 ) Income tax effect — 245 — 245 Amount reclassified from accumulated other comprehensive income (loss) Cash flow hedges — 62 — 62 Amortization of prior service credit — — (102 ) (102 ) Amortization of actuarial losses — — 9,233 9,233 Income tax effect — 88 (2,041 ) (1,953 ) Other comprehensive income (loss) 8,328 (788 ) 5,630 13,170 Ending Balance, March 31, 2019 $ (53,805 ) $ 1,362 $ (395,976 ) $ (448,419 ) |
Comprehensive (Loss) Income Att
Comprehensive (Loss) Income Attributable to Noncontrolling Shareholders' Interests | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Comprehensive (Loss) Income Attributable to Noncontrolling Shareholders' Interests | Comprehensive (Loss) Income Attributable to Noncontrolling Shareholders’ Interests The following table provides the details of the comprehensive (loss) income attributable to noncontrolling shareholders' interests: Three Months Ended March 31, 2020 2019 Net income attributable to noncontrolling shareholders’ interests $ 274 $ 199 Other comprehensive (loss) income: Currency translation adjustments (544 ) 979 Comprehensive (loss) income attributable to noncontrolling shareholders’ interests $ (270 ) $ 1,178 |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | Contingent Liabilities Product Liability Claims The Company is a defendant in various product liability claims brought in numerous jurisdictions in which individuals seek damages resulting from motor vehicle accidents allegedly caused by defective tires manufactured by the Company. Each of the product liability claims faced by the Company generally involves different types of tires and circumstances surrounding the accident such as different applications, vehicles, speeds, road conditions, weather conditions, driver error, tire repair and maintenance practices, service life conditions, as well as different jurisdictions and different injuries. In addition, in many of the Company’s product liability lawsuits the plaintiff alleges that his or her harm was caused by one or more co-defendants who acted independently of the Company. Accordingly, both the claims asserted and the resolutions of those claims have an enormous amount of variability. The aggregate amount of damages asserted at any point in time is not determinable since often times when claims are filed, the plaintiffs do not specify the amount of damages. Even when there is an amount alleged, at times the amount is wildly inflated and has no rational basis. The fact that the Company is a defendant in product liability lawsuits is not surprising given the current litigation climate, which is largely confined to the United States. However, the fact that the Company is subject to claims does not indicate that there is a quality issue with the Company’s tires. The Company sells approximately 30 to 35 million passenger car, light truck, CUV, SUV, TBR and motorcycle tires per year in North America. The Company estimates that approximately 300 million Company-produced tires made up of thousands of different specifications are still on the road in North America. While tire disablements do occur, it is the Company’s and the tire industry’s experience that the vast majority of tire failures relate to service-related conditions, which are entirely out of the Company’s control, such as failure to maintain proper tire pressure, improper maintenance, improper repairs, road hazard and excessive speed. The Company accrues costs for product liability at the time a loss is probable and the amount of loss can be estimated. The Company believes the probability of loss can be established and the amount of loss can be estimated only after certain minimum information is available, including verification that Company-produced product were involved in the incident giving rise to the claim, the condition of the product purported to be involved in the claim, the nature of the incident giving rise to the claim and the extent of the purported injury or damages. In cases where such information is known, each product liability claim is evaluated based on its specific facts and circumstances. A judgment is then made to determine the requirement for establishment or revision of an accrual for any potential liability. Adjustments to estimated reserves are recorded in the period in which the change in estimate occurs. The liability often cannot be determined with precision until the claim is resolved. Pursuant to ASC 450 "Contingencies," the Company accrues the minimum liability for each known claim when the estimated outcome is a range of probable loss and no one amount within that range is more likely than another. The Company uses a range of losses because an average cost would not be meaningful since the product liability claims faced by the Company are unique and widely variable, and accordingly, the resolutions of those claims have an enormous amount of variability. The costs have ranged from zero dollars to $33 million in one case with no “average” that is meaningful. No specific accrual is made for individual unasserted claims or for premature claims, asserted claims where the minimum information needed to evaluate the probability of a liability is not yet known. However, an accrual for such claims based, in part, on management’s expectations for future litigation activity and the settled claims history is maintained. The Company periodically reviews such estimates and any adjustments for changes in reserves are recorded in the period in which the change in estimate occurs. Because of the speculative nature of litigation in the U.S., the Company does not believe a meaningful aggregate range of potential loss for asserted and unasserted claims can be determined. While the Company believes its reserves are reasonably stated, it is possible an individual claim from time to time may result in an aberration from the norm and could have a material impact. The time frame for the payment of a product liability claim is too variable to be meaningful. From the time a claim is filed to its ultimate disposition depends on the unique nature of the case, how it is resolved - claim dismissed, negotiated settlement, trial verdict or appeals process - and is highly dependent on jurisdiction, specific facts, the plaintiff’s attorney, the court’s docket and other factors. Given that some claims may be resolved in weeks and others may take five years or more, it is impossible to predict with any reasonable reliability the time frame over which the accrued amounts may be paid. The Company regularly reviews the probable outcome of outstanding legal proceedings and the availability and limits of the insurance coverage, and accrues for such legal proceedings at the time a loss is probable and the amount of the loss can be estimated. As part of its regular review, the Company monitors trends that may affect its ultimate liability and analyzes the developments and variables likely to affect pending and anticipated claims against the Company and the reserves for such claims. The Company utilizes claims experience, as well as trends and developments in the litigation climate, in estimating its required accrual. Based on the Company's quarterly reviews, coupled with normal activity, including the addition of another quarter of self-insured incidents, settlements and changes in the amount of reserves, the Company increased its accrual to $123,429 at March 31, 2020 from $117,219 at December 31, 2019 . For the quarter ended March 31, 2020 , the addition of another three months of self-insured incidents accounted for an increase of $9,334 in the Company's product liability reserve. Settlements, changes in the amount of reserves for cases where sufficient information is known to estimate a liability, and changes in assumptions decreased the liability by $485 for the three months ended March 31, 2020 . The Company paid $2,639 during 2020 to resolve cases and claims. The Company’s product liability reserve balance at March 31, 2020 totaled $123,429 (the current portion of $18,577 is included in Accrued liabilities and the long-term portion is included in Other long-term liabilities on the Condensed Consolidated Balance Sheets ), and the balance at December 31, 2019 totaled $117,219 (current portion of $25,366 ). The product liability expense reported by the Company includes amortization of insurance premium costs, adjustments to settlement reserves and legal costs incurred in defending claims against the Company. Legal costs are expensed as incurred and product liability insurance premiums are amortized over coverage periods. Product liability expenses are included in Cost of products sold in the Condensed Consolidated Statements of Operations . For the three months ended March 31, 2020 and 2019 , respectively, product liability expense was as follows: Three Months Ended March 31, 2020 2019 Product liability expense $ 11,548 $ 10,817 |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company has four segments under ASC 280, "Segments": • North America, composed of the Company’s operations in the United States and Canada; • Latin America, composed of the Company’s operations in Mexico, Central America and South America; • Europe; and • Asia. North America and Latin America meet the criteria for aggregation in accordance with ASC 280, as they are similar in their production and distribution processes and exhibit similar economic characteristics. The aggregated North America and Latin America segments are presented as “Americas Tire Operations” in the segment disclosure. The Americas Tire Operations segment manufactures and markets passenger car and light truck tires, primarily for sale in the U.S. replacement market. The segment also has a manufacturing operation in Mexico, COOCSA, which supplies passenger car and light truck tires to the Mexican, North American, Central American and South American markets. On January 24, 2020, the Company acquired the remaining noncontrolling ownership interest in COOCSA, making COOCSA a wholly-owned subsidiary. The segment also markets and distributes racing, TBR and motorcycle tires. The racing and motorcycle tires are manufactured by the Company’s European segment and by others. TBR tires are sourced from GRT and through off-take agreements with PCT, through mid-2021, and Sailun Vietnam, through December 31, 2020. On April 5, 2019, Cooper Vietnam and Sailun Vietnam established a joint venture in Vietnam, ACTR, which will produce and sell TBR tires. The new joint venture is expected to begin commercially producing tires in 2020. Major distribution channels and customers include independent tire dealers, wholesale distributors, regional and national retail tire chains, large retail chains that sell tires as well as other automotive products, mass merchandisers and digital channels. The segment does not currently sell its products directly to end users, except through three Company-owned retail stores. The segment sells a limited number of tires to OEMs. Both the Europe and Asia segments have been determined to be individually immaterial, as they do not meet the quantitative requirements for segment disclosure under ASC 280. In accordance with ASC 280, information about operating segments that are not reportable shall be combined and disclosed in an all other category separate from other reconciling items. As a result, these two segments have been combined in the segment operating results discussion. The results of the combined Europe and Asia segments are presented as “International Tire Operations.” The European operations include manufacturing operations in the U.K. and Serbia. The U.K. entity manufactures and markets motorcycle and racing tires and tire retread material for domestic and global markets. The Serbian entity manufactures passenger car and light truck tires primarily for the European markets and for export to the North American segment. The Asian operations are located in the PRC and Vietnam. Cooper Kunshan Tire manufactures passenger car and light truck tires both for the Chinese domestic market and for export to markets outside of the PRC. GRT, a joint venture manufacturing facility located in the PRC, serves as a global source of TBR tire production for the Company. The segment also procures certain TBR tires under off-take agreements with PCT, through mid-2021, and Sailun Vietnam, through December 31, 2020. On April 5, 2019, Cooper Vietnam and Sailun Vietnam established ACTR, which will produce and sell TBR tires. The segment sells a majority of its tires in the replacement market, with a portion also sold to OEMs. On January 17, 2019, Cooper Tire Europe, a wholly owned subsidiary of the Company, committed to a plan to cease light vehicle tire production at its Melksham, U.K. facility. The phasing out of light vehicle tire production was substantially completed in the third quarter of 2019. Approximately 300 roles were eliminated at the site. Cooper Tire Europe now obtains light vehicle tires to meet customer needs from other production sites within the Company’s global production network. Approximately 400 roles remain in Melksham to support the functions that continue there, including motorsports and motorcycle tire production, a materials business, Cooper Tire Europe headquarters, sales and marketing, and the Europe Technical Center. The following table details segment financial information: Three Months Ended March 31, 2020 2019 Net sales: Americas Tire External customers $ 449,486 $ 504,758 Intercompany 7,569 10,178 457,055 514,936 International Tire External customers 82,207 114,406 Intercompany 20,180 29,379 102,387 143,785 Eliminations (27,748 ) (39,558 ) Consolidated net sales $ 531,694 $ 619,163 Operating profit (loss): Americas Tire $ 10,416 $ 38,789 International Tire (10,279 ) (1,339 ) Unallocated corporate charges (6,951 ) (10,453 ) Eliminations 586 (566 ) Consolidated operating (loss) profit $ (6,228 ) $ 26,431 Interest expense $ (5,007 ) $ (8,314 ) Interest income 1,696 3,380 Other pension and postretirement benefit expense (4,210 ) (9,362 ) Other non-operating income 1,773 1,380 (Loss) Income before income taxes $ (11,976 ) $ 13,515 |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of consolidation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. There is typically a year-round demand for the Company's products, however, passenger car and light truck ("light vehicle") replacement tire sales are generally strongest during the third and fourth quarters of the year. Winter tires are sold principally during the months of May through November. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020 . The Company consolidates into its financial statements the accounts of the Company, all wholly-owned subsidiaries, and any partially-owned subsidiary that the Company has the ability to control. Control generally equates to ownership percentage, whereby investments that are more than 50 percent owned are consolidated, investments in affiliates of 50 percent or less but greater than 20 percent are accounted for using the equity method. The Company does not consolidate any entity for which it has a variable interest based solely on power to direct the activities and significant participation in the entity’s expected results that would not otherwise be consolidated based on control through voting interests. Further, the Company’s joint ventures are businesses established and maintained in connection with the Company’s operating strategy. All intercompany transactions and balances have been eliminated. |
Earnings per common share | Net income per share is computed on the basis of the weighted average number of common shares outstanding each period. When applicable, diluted earnings per share includes the dilutive effect of stock options and other stock units. |
Recent accounting pronouncements | Each change to U.S. GAAP is established by the Financial Accounting Standards Board (“FASB”) in the form of an accounting standards update (“ASU”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. Accounting Pronouncements – Recently adopted Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. Such modifications to disclosures center around Level 3 fair value measurements and investments in entities that calculate net asset value. This standard is effective for interim and annual reporting periods beginning after December 15, 2019 and has been adopted by the Company effective January 1, 2020. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Internal-Use Software In August 2018, the FASB issued ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)," which aligns the requirements for capitalizing implementation costs incurred in a service contract hosting arrangement with those of developing or obtaining internal-use software. This standard is effective for interim and annual reporting periods beginning after December 15, 2019 and has been adopted prospectively by the Company effective January 1, 2020. Capitalization of implementation costs incurred in a service contract hosting arrangement affects Intangibles, net of accumulated amortization, Cost of products sold, and Selling, general, and administrative expense within the condensed consolidated financial statements. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Accounting for Income Taxes On December 18, 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," to, among other provisions, eliminate certain exceptions related to intra-period tax allocation and loss benefit limitations in interim periods, as well as certain rules pertaining to deferred taxes for equity method investees. This ASU also simplifies rules pertaining to franchise taxes and other taxes partially based on income, and changes the timing of when an entity recognizes effects of enacted tax law changes. This standard becomes effective in fiscal years beginning after December 15, 2020; however, the Company has chosen to early adopt in the period ended March 31, 2020. The adoption of this standard did not materially impact the Company's condensed consolidated financial statements . Accounting Pronouncements – To be adopted Defined Benefit Plans In August 2018, the FASB issued ASU 2018-14, "Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. For example, disclosures around the effect of a one-percentage-point change in assumed health care costs will be removed and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period will be added. This standard is effective for fiscal years ending after December 15, 2020, and early adoption is permitted. These amendments must be applied on a retrospective basis for all periods presented. The Company is currently evaluating the impact the new standard will have on its condensed consolidated financial statements . Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)," which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard and the impact it will have on the condensed consolidated financial statements . |
Basis of Presentation and Con_3
Basis of Presentation and Consolidation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share: (Number of shares and dollar amounts in thousands except per share amounts) Three Months Ended March 31, 2020 2019 Numerator Numerator for basic and diluted earnings per share - income from continuing operations available to common stockholders $ (11,591 ) $ 6,979 Denominator Denominator for basic earnings per share - weighted average shares outstanding 50,236 50,100 Effect of dilutive securities - stock options and other stock units — 278 Denominator for diluted earnings per share - adjusted weighted average shares outstanding 50,236 50,378 (Loss) Earnings per share: Basic $ (0.23 ) $ 0.14 Diluted (0.23 ) 0.14 Anti-dilutive shares excluded from computation of diluted loss per share 294 — |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Restructuring and Related Costs | For the quarter ended March 31, 2020 , the Company incurred restructuring expense of $10,930 comprised of: Three Months Ended March 31, 2020 Joint venture workforce services rendered $ 8,218 Professional and other costs 2,712 Total restructuring expense $ 10,930 Three Months Ended March 31, 2019 Melksham employee severance costs $ 4,163 Asset write-downs & other costs 810 Total restructuring expense $ 4,973 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Major Market Channel | In the following tables, revenue is disaggregated by major market channel for the three months ended March 31, 2020 and 2019 , respectively: Three Months Ended March 31, 2020 Americas International Eliminations Total Light Vehicle (1) $ 404,636 $ 71,082 $ (10,714 ) $ 465,004 Truck and bus radial 41,004 17,309 (17,034 ) 41,279 Other (2) 11,415 13,996 — 25,411 Net sales $ 457,055 $ 102,387 $ (27,748 ) $ 531,694 Three Months Ended March 31, 2019 Americas International Eliminations Total Light Vehicle (1) $ 454,014 $ 105,320 $ (19,322 ) $ 540,012 Truck and bus radial 50,086 23,696 (20,236 ) 53,546 Other (2) 10,836 14,769 — 25,605 Net sales $ 514,936 $ 143,785 $ (39,558 ) $ 619,163 (1) Light vehicle includes passenger car and light truck tires (2) Other includes motorcycle and racing tires, wheels, tire retread material, and other items |
Schedule of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers | Significant changes in the contract liabilities balance during the three months ended March 31, 2020 are as follows: Contract Liabilities Contract liabilities at beginning of year $ 1,080 Increases to deferred revenue for cash received in advance from customers 1,813 Decreases due to recognition of deferred revenue (1,440 ) Contract liabilities at March 31, 2020 $ 1,454 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Financing Leases | The following is a summary of the Company's debt and finance leases as of March 31, 2020 and December 31, 2019 . Principal Balance Weighted Average Interest Rate Principal Balance Weighted Average Interest Rate Current Long-Term Current Long-Term Maturity Date March 31, 2020 December 31, 2019 Secured revolver June, 2024 $ 250,000 $ — 3.083% $ — $ — n/a AR securitization February, 2021 20,000 — 1.918% — — n/a Asia short term notes Various maturities 7,844 — 4.656% 12,296 — 4.701% 277,844 — 12,296 $ — Term loan A June, 2024 10,000 185,000 2.615% 10,000 187,500 3.300% Unsecured notes March, 2027 — 116,880 7.625% — 116,880 7.625% Finance leases and other Various maturities 5,477 1,213 5.431% 265 5,998 2.613% 15,477 303,093 10,265 310,378 Less, Unamortized debt issuance costs — 1,173 — 1,230 $ 293,321 $ 301,920 $ 22,561 $ 309,148 Additional Credit Capacity Secured revolver $ 250,000 AR securitization 130,000 Asia short term notes 38,394 418,394 Less, amounts used to secure letters of credit and other unavailable funds 71,690 $ 346,704 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Gross Position of Derivative Contracts in Consolidated Balance Sheets | The following table presents the location and amounts of derivative instrument fair values in the Condensed Consolidated Balance Sheets : Assets/(liabilities) March 31, 2020 December 31, 2019 Designated as hedging instruments: Gross amounts recognized $ (10,135 ) $ (3,208 ) Gross amounts offset 3,240 149 Net amounts $ (6,895 ) $ (3,059 ) Not designated as hedging instruments: Gross amounts recognized $ (645 ) $ (1,118 ) Gross amounts offset 65 76 Net amounts $ (580 ) $ (1,042 ) Net amounts presented: Accrued liabilities $ (302 ) $ (2,420 ) Other long-term liabilities (7,173 ) (1,681 ) |
Gains and Losses on Derivative Instruments in Consolidated Statements of Income | The following table presents the location and amount of gains and losses on derivative instruments designated as cash flow hedges in the Condensed Consolidated Statements of Operations : Three Months Ended March 31, 2020 2019 Amount of Loss Recognized in Other Comprehensive Income on Derivatives $ (3,601 ) $ (1,183 ) Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Net sales $ 180 $ 399 Interest expense (30 ) (32 ) Other non-operating income 360 (429 ) $ 510 $ (62 ) The following table presents the location and amount of losses on foreign exchange contract derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Operations . Three Months Ended March 31, 2020 2019 Other non-operating income (expense) $ 6,248 $ (1,006 ) |
Schedule of Fair Value Hierarchy for those Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 : March 31, 2020 Total (Liabilities) Quoted Prices Significant Significant Foreign Currency Derivative $ 1,736 $ — $ 1,736 $ — Interest Rate Swaps (9,211 ) — (9,211 ) — Stock-based Liabilities (9,600 ) (9,600 ) — — December 31, 2019 Total Liabilities Quoted Prices in Active Markets for Identical Assets Level (1) Significant Other Observable Inputs Level (2) Significant Unobservable Inputs Level (3) Foreign Currency Derivative $ (3,069 ) $ — $ (3,069 ) $ — Interest Rate Swaps (1,032 ) — (1,032 ) — Stock-based Liabilities (14,971 ) (14,971 ) — — |
Pensions and Postretirement B_2
Pensions and Postretirement Benefits Other than Pensions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs | The following tables disclose the amount of net periodic benefit costs for the three months ended March 31, 2020 and 2019 , respectively, for the Company’s defined benefit plans and other postretirement benefits: Pension Benefits - Domestic Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Service cost $ 2,497 $ 2,244 Interest cost 8,308 9,875 Expected return on plan assets (14,194 ) (11,990 ) Amortization of actuarial loss 7,221 8,284 Amortization of prior service cost 192 — Net periodic benefit cost $ 4,024 $ 8,413 Pension Benefits - International Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Interest cost $ 2,099 $ 2,821 Expected return on plan assets (2,218 ) (2,947 ) Amortization of actuarial loss 1,034 949 Amortization of prior service cost 66 — Net periodic benefit cost $ 981 $ 823 Other Post Retirement Benefits Three Months Ended March 31, 2020 2019 Components of net periodic benefit cost: Service cost $ 360 $ 393 Interest cost 1,830 2,472 Amortization of actuarial gain (106 ) (102 ) Amortization of prior service credit (22 ) — Net periodic benefit cost $ 2,062 $ 2,763 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Reconciliation of Beginning and End of Period Equity Accounts | The following tables provide a quarterly reconciliation of the equity accounts attributable to Cooper Tire & Rubber Company and to the noncontrolling shareholders' interests for the year to date as of March 31, 2020 and 2019 : Common Stock $1 Par Value Capital in Excess of Par Value Retained Earnings Cumulative Other Comprehensive Loss Common Shares in Treasury Total Parent Stockholders’ Equity Noncontrolling Shareholders’ Interests in Consolidated Subsidiary Total Stockholders’ Equity Balance at December 31, 2019 $ 87,850 $ 22,175 $ 2,524,963 $ (447,580 ) $ (922,783 ) $ 1,264,625 $ 63,108 $ 1,327,733 Net (loss) income — — (11,591 ) — — (11,591 ) 274 (11,317 ) Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest — — — (52,682 ) — (52,682 ) (544 ) (53,226 ) Stock compensation plans — (1,235 ) (43 ) — 1,377 99 — 99 Cash dividends - 0.105 per share — (5,277 ) — — (5,277 ) — (5,277 ) Acquisition of noncontrolling shareholders' interest — (5,714 ) — (11,748 ) — (17,462 ) (44,810 ) (62,272 ) Balance at March 31, 2020 $ 87,850 $ 15,226 $ 2,508,052 $ (512,010 ) $ (921,406 ) $ 1,177,712 $ 18,028 $ 1,195,740 Common Stock $1 Par Value Capital in Excess of Par Value Retained Earnings Cumulative Other Comprehensive (Loss) Income Common Shares in Treasury Total Parent Stockholders’ Equity Noncontrolling Shareholders’ Interests in Consolidated Subsidiary Total Stockholders’ Equity Balance at December 31, 2018 $ 87,850 $ 21,124 $ 2,449,714 $ (461,589 ) $ (925,056 ) $ 1,172,043 $ 60,400 $ 1,232,443 Net income — — 6,979 — — 6,979 199 7,178 Other comprehensive income — — — 13,170 — 13,170 979 14,149 Stock compensation plans — (1,579 ) (64 ) — 1,353 (290 ) — (290 ) Cash dividends - 0.105 per share — — (5,262 ) — — (5,262 ) — (5,262 ) Balance at March 31, 2019 $ 87,850 $ 19,545 $ 2,451,367 $ (448,419 ) $ (923,703 ) $ 1,186,640 $ 61,578 $ 1,248,218 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income (Loss) by Component (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Cumulative Other Comprehensive Income (Loss) in Accompanying Consolidated Statements of Equity | The following tables provide a quarterly reconciliation of each component of accumulated other comprehensive (loss) income in the accompanying schedule of Accumulated other comprehensive loss: Cumulative Translation Adjustment Derivative Instruments Post- retirement Benefits Total Ending Balance, December 31, 2019 $ (58,186 ) $ (549 ) $ (388,845 ) $ (447,580 ) Other comprehensive (loss) income before reclassifications (48,998 ) (3,601 ) (31,490 ) (84,089 ) Foreign currency translation effect — — 4,708 4,708 Income tax effect — 984 7,857 8,841 Amount reclassified from accumulated other comprehensive (loss) income Cash flow hedges — (510 ) — (510 ) Amortization of prior service credit — — 236 236 Amortization of actuarial losses — — 8,149 8,149 Income tax effect — 53 (1,818 ) (1,765 ) Other comprehensive loss (48,998 ) (3,074 ) (12,358 ) (64,430 ) Ending Balance, March 31, 2020 $ (107,184 ) $ (3,623 ) $ (401,203 ) $ (512,010 ) Cumulative Translation Adjustment Derivative Instruments Post- retirement Benefits Total Ending Balance, December 31, 2018 $ (62,133 ) $ 2,150 $ (401,606 ) $ (461,589 ) Other comprehensive income (loss) before reclassifications 8,328 (1,183 ) — 7,145 Foreign currency translation effect — — (1,460 ) (1,460 ) Income tax effect — 245 — 245 Amount reclassified from accumulated other comprehensive income (loss) Cash flow hedges — 62 — 62 Amortization of prior service credit — — (102 ) (102 ) Amortization of actuarial losses — — 9,233 9,233 Income tax effect — 88 (2,041 ) (1,953 ) Other comprehensive income (loss) 8,328 (788 ) 5,630 13,170 Ending Balance, March 31, 2019 $ (53,805 ) $ 1,362 $ (395,976 ) $ (448,419 ) |
Comprehensive (Loss) Income A_2
Comprehensive (Loss) Income Attributable to Noncontrolling Shareholders' Interests (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Comprehensive Income (Loss) Attributable to Noncontrolling Shareholders' Interests | The following table provides the details of the comprehensive (loss) income attributable to noncontrolling shareholders' interests: Three Months Ended March 31, 2020 2019 Net income attributable to noncontrolling shareholders’ interests $ 274 $ 199 Other comprehensive (loss) income: Currency translation adjustments (544 ) 979 Comprehensive (loss) income attributable to noncontrolling shareholders’ interests $ (270 ) $ 1,178 |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Product Liability Contingencies | For the three months ended March 31, 2020 and 2019 , respectively, product liability expense was as follows: Three Months Ended March 31, 2020 2019 Product liability expense $ 11,548 $ 10,817 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Financial Information | The following table details segment financial information: Three Months Ended March 31, 2020 2019 Net sales: Americas Tire External customers $ 449,486 $ 504,758 Intercompany 7,569 10,178 457,055 514,936 International Tire External customers 82,207 114,406 Intercompany 20,180 29,379 102,387 143,785 Eliminations (27,748 ) (39,558 ) Consolidated net sales $ 531,694 $ 619,163 Operating profit (loss): Americas Tire $ 10,416 $ 38,789 International Tire (10,279 ) (1,339 ) Unallocated corporate charges (6,951 ) (10,453 ) Eliminations 586 (566 ) Consolidated operating (loss) profit $ (6,228 ) $ 26,431 Interest expense $ (5,007 ) $ (8,314 ) Interest income 1,696 3,380 Other pension and postretirement benefit expense (4,210 ) (9,362 ) Other non-operating income 1,773 1,380 (Loss) Income before income taxes $ (11,976 ) $ 13,515 |
Basis of Presentation and Con_4
Basis of Presentation and Consolidation - Additional Information (Detail) - USD ($) $ in Thousands | May 10, 2019 | Feb. 15, 2019 | Sep. 24, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Apr. 05, 2019 |
Summary Of Significant Policies [Line Items] | ||||||
Minimum percentage of investment consolidated | 50.00% | |||||
Maximum percentage of cost method investments | 20.00% | |||||
Investment in joint venture | $ 48,472 | $ 48,912 | ||||
Unfavorable Regulatory Action | ||||||
Summary Of Significant Policies [Line Items] | ||||||
Loss contingency imposed | 42.16% | |||||
Section 301 Tariffs | ||||||
Summary Of Significant Policies [Line Items] | ||||||
Loss contingency imposed | 25.00% | 10.00% | ||||
TBR | ||||||
Summary Of Significant Policies [Line Items] | ||||||
Noncontrolling interest | 35.00% | |||||
GRT Acquisition | TBR | ||||||
Summary Of Significant Policies [Line Items] | ||||||
Investment in joint venture | $ 49,001 |
Basis of Presentation and Con_5
Basis of Presentation and Consolidation - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator | ||
Numerator for basic and diluted earnings per share - income from continuing operations available to common stockholders | $ (11,591) | $ 6,979 |
Denominator | ||
Denominator for basic earnings per share - weighted average shares outstanding (in shares) | 50,236 | 50,100 |
Effect of dilutive securities - stock options and other stock units (in shares) | 0 | 278 |
Denominator for diluted earnings per share - adjusted weighted average shares outstanding (in shares) | 50,236 | 50,378 |
(Loss) Earnings per share: | ||
Basic (in dollars per share) | $ (0.23) | $ 0.14 |
Diluted (in dollars per share) | $ (0.23) | $ 0.14 |
Diluted securities excluded from EPS amount (in shares) | 294 | 0 |
Current Expected Credit Losses
Current Expected Credit Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Credit Loss [Abstract] | ||
Accounts receivable, less allowances | $ 509,280 | $ 544,257 |
Allowances for accounts receivable | $ 10,449 | $ 8,109 |
Restructuring - Additional Info
Restructuring - Additional Information (Details) $ in Thousands | Jan. 25, 2020USD ($) | Jan. 17, 2019Employee | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Jan. 24, 2020USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Restructuring expense | $ 10,930 | $ 4,973 | |||||
Accrued restructuring balance | 300 | ||||||
Restructuring, expected number of positions eliminated | Employee | 300 | ||||||
Restructuring, remaining number of positions after elimination | Employee | 400 | ||||||
Other Restructuring | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Restructuring expense | 2,712 | ||||||
Joint Venture | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Restructuring expense | $ 10,930 | ||||||
Facility Closing | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Restructuring expense | $ 4,973 | ||||||
Restructuring, cost related to facility closing | $ 4,973 | $ 8,315 | |||||
COOCSA | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Noncontrolling interest, ownership percentage | 41.57% | ||||||
Equity method investment, total cash price | $ 54,500 | ||||||
Member Of Joint Venture | Other Restructuring | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Payments for restructuring | $ 15,984 | ||||||
Minority Interest Shareholder | Other Restructuring | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Payments for restructuring | $ 7,772 |
Restructuring - Restructuring a
Restructuring - Restructuring and Related Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | $ 10,930 | $ 4,973 |
Joint venture workforce services rendered | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | 8,218 | |
Professional and other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | 2,712 | |
Joint Venture | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | $ 10,930 | |
Melksham employee severance costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | 4,163 | |
Asset write-downs & other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | 810 | |
Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expense | $ 4,973 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Revenue Disaggregated by Major Market Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 531,694 | $ 619,163 |
Light vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 465,004 | 540,012 |
TBR | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 41,279 | 53,546 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 25,411 | 25,605 |
Americas Tire | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 449,486 | 504,758 |
International Tire | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 82,207 | 114,406 |
Operating Segments | Americas Tire | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 457,055 | 514,936 |
Operating Segments | Americas Tire | Light vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 404,636 | 454,014 |
Operating Segments | Americas Tire | TBR | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 41,004 | 50,086 |
Operating Segments | Americas Tire | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 11,415 | 10,836 |
Operating Segments | International Tire | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 102,387 | 143,785 |
Operating Segments | International Tire | Light vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 71,082 | 105,320 |
Operating Segments | International Tire | TBR | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 17,309 | 23,696 |
Operating Segments | International Tire | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13,996 | 14,769 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | (27,748) | (39,558) |
Eliminations | Light vehicle | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | (10,714) | (19,322) |
Eliminations | TBR | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | (17,034) | (20,236) |
Eliminations | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 0 | $ 0 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Changes in Contract Liabilities Balance (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Movement in Contract with Customer Liability [Roll Forward] | |
Contract liabilities at beginning of year | $ 1,080 |
Increases to deferred revenue for cash received in advance from customers | 1,813 |
Decreases due to recognition of deferred revenue | (1,440) |
Contract liabilities at end of period | $ 1,454 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Current cost of U.S. inventories under FIFO | $ 411,466 | $ 365,585 |
U.S. inventories, LIFO reserve | $ 79,053 | $ 87,616 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) provision | $ (659) | $ 6,337 |
Effective tax rate | 5.50% | 46.90% |
Additional unrecognized tax benefits | $ 4,361 | |
Net discrete tax benefits | $ 2,417 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowances | 25,845 | |
Recognition of unrecognized tax benefit upon which the effective rate would change | 14,532 | |
United States | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowances | 1,378 | |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowances | $ 24,467 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 27, 2019USD ($) | Feb. 15, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Line of credit, current | $ 277,844,000 | $ 12,296,000 | ||
Additional Credit Capacity | 418,394,000 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 500,000,000 | |||
Line of credit, current | 250,000,000 | |||
Additional Credit Capacity | 250,000,000 | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Amounts used to secure letters of credit | 21,490,000 | 21,651,000 | ||
AR securitization | ||||
Debt Instrument [Line Items] | ||||
Line of credit, current | 20,000,000 | |||
Additional Credit Capacity | 130,000,000 | |||
Bank Group And Accounts Receivable Securitization Facility | ||||
Debt Instrument [Line Items] | ||||
Additional Credit Capacity | 308,310,000 | |||
Asian Credit Lines | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 46,238,000 | |||
Line of credit, current | 7,844,000 | 12,296,000 | ||
Additional Credit Capacity | $ 38,394,000 | |||
Amended Accounts Receivable Facility | AR securitization | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | |||
Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 700,000,000 | |||
Increase in line credit facility (up to) | $ 300,000,000 | |||
Debt instrument, leverage ratio, maximum | 1.75 | |||
Line of credit, current | $ 0 | |||
Line of Credit | Term Loan A Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |||
Line of Credit | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 110,000,000 |
Debt - Debt and Financing Lease
Debt - Debt and Financing Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Line of credit, current | $ 277,844 | $ 12,296 |
Long-term debt and finance leases, excluding line of credit, current | 15,477 | 10,265 |
Long-term debt and finance leases, current | 293,321 | 22,561 |
Long-term debt and finance leases, non-current | 303,093 | 310,378 |
Less, Unamortized debt issuance costs | 1,173 | 1,230 |
Long-term debt and finance leases | 301,920 | 309,148 |
Additional Credit Capacity | 418,394 | |
Less, amounts used to secure letters of credit and other unavailable funds | 71,690 | |
Remaining available credit capacity | 346,704 | |
Term loan A | ||
Debt Instrument [Line Items] | ||
Long-term debt and finance leases, excluding line of credit, current | 10,000 | 10,000 |
Long-term debt and finance leases, non-current | $ 185,000 | $ 187,500 |
Weighted Average Interest Rate | 2.615% | 3.30% |
Unsecured notes | ||
Debt Instrument [Line Items] | ||
Long-term debt and finance leases, non-current | $ 116,880 | $ 116,880 |
Weighted Average Interest Rate | 7.625% | 7.625% |
Finance leases and other | ||
Debt Instrument [Line Items] | ||
Long-term debt and finance leases, excluding line of credit, current | $ 5,477 | $ 265 |
Long-term debt and finance leases, non-current | $ 1,213 | $ 5,998 |
Weighted Average Interest Rate | 5.431% | 2.613% |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit, current | $ 250,000 | |
Weighted Average Interest Rate | 3.083% | |
Additional Credit Capacity | $ 250,000 | |
AR securitization | ||
Debt Instrument [Line Items] | ||
Line of credit, current | $ 20,000 | |
Weighted Average Interest Rate | 1.918% | |
Additional Credit Capacity | $ 130,000 | |
Asian Credit Lines | ||
Debt Instrument [Line Items] | ||
Line of credit, current | $ 7,844 | $ 12,296 |
Weighted Average Interest Rate | 4.656% | 4.701% |
Additional Credit Capacity | $ 38,394 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Jul. 11, 2019 | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Gain (loss) of the effective portion of change in fair value of foreign currency forward contracts | $ 3,014,000 | $ (1,033,000) | |
Fair value of foreign currency contracts | (698,000) | (994,000) | |
Long-term debt and finance leases | 301,920,000 | 309,148,000 | |
Quoted Prices in Active Markets for Identical Assets Level (1) | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Fair value of long term debt | 307,547,000 | 292,719,000 | |
Foreign Currency Derivative | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Notional amount of derivative instruments | $ 154,165,000 | 167,915,000 | |
Foreign Currency Derivative | Maximum | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Maturity period of hedges | 12 months | ||
Interest Rate Swaps | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Notional amount of derivative instruments | $ 200,000,000 | ||
Variable interest rate of inters rate swap derivative instrument | 1.72% | ||
Derivatives Designated as Cash Flow Hedges | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Maturity period of hedges | 2 years | ||
Term Loan A Facility | Line of Credit | London Interbank Offered Rate (LIBOR) | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Basis points on Term Loan A | 1.50% | ||
Fair Value, Measurements, Recurring | Interest Rate Swaps | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Change in fair value of swaps | $ (9,211,000) | (1,032,000) | |
Fair Value, Measurements, Recurring | Interest Rate Swaps | Quoted Prices in Active Markets for Identical Assets Level (1) | |||
Fair Values Of Financial Assets And Liabilities Including Derivative Financial Instruments [Line Items] | |||
Change in fair value of swaps | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Gross Position of Derivative Contracts in Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Net amounts presented | $ (302) | $ (2,420) |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Net amounts presented | (7,173) | (1,681) |
Designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | (10,135) | (3,208) |
Gross amounts offset | 3,240 | 149 |
Net amounts | (6,895) | (3,059) |
Not designated as hedging instruments: | ||
Derivatives, Fair Value [Line Items] | ||
Gross amounts recognized | (645) | (1,118) |
Gross amounts offset | 65 | 76 |
Net amounts | $ (580) | $ (1,042) |
Fair Value Measurements - Gains
Fair Value Measurements - Gains and Losses on Derivative Instruments in Consolidated Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Other Comprehensive Income on Derivatives | $ (4,111) | $ (1,121) |
Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Other Comprehensive Income on Derivatives | (3,601) | |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 510 | |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (62) | |
Designated as Hedging Instrument | Net sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 180 | |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 399 | |
Designated as Hedging Instrument | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (30) | |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (32) | |
Designated as Hedging Instrument | Other non-operating income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 360 | |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (429) | |
Not designated as hedging instruments: | Foreign Currency Derivative | Other non-operating income | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ 6,248 | (1,006) |
Derivatives Designated as Cash Flow Hedges | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Other Comprehensive Income on Derivatives | $ (1,183) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Hierarchy for those Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Foreign Currency Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | $ 1,736 | $ (3,069) |
Interest Rate Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | (9,211) | (1,032) |
Stock-based Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | (9,600) | (14,971) |
Quoted Prices in Active Markets for Identical Assets Level (1) | Foreign Currency Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets Level (1) | Interest Rate Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets Level (1) | Stock-based Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | (9,600) | (14,971) |
Significant Other Observable Inputs Level (2) | Foreign Currency Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 1,736 | (3,069) |
Significant Other Observable Inputs Level (2) | Interest Rate Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | (9,211) | (1,032) |
Significant Other Observable Inputs Level (2) | Stock-based Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 0 | 0 |
Significant Unobservable Inputs Level (3) | Foreign Currency Derivative | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 0 | 0 |
Significant Unobservable Inputs Level (3) | Interest Rate Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | 0 | 0 |
Significant Unobservable Inputs Level (3) | Stock-based Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total derivative assets (liabilities) | $ 0 | $ 0 |
Pensions and Postretirement B_3
Pensions and Postretirement Benefits Other than Pensions - Components of Net Periodic Benefit Costs (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan amendment | $ 2,582 | |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 360 | $ 393 |
Interest cost | 1,830 | 2,472 |
Amortization of actuarial (gain) loss | (106) | (102) |
Amortization of prior service cost (credit) | (22) | 0 |
Net periodic benefit cost | 2,062 | 2,763 |
United States | Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 2,497 | 2,244 |
Interest cost | 8,308 | 9,875 |
Expected return on plan assets | (14,194) | (11,990) |
Amortization of actuarial (gain) loss | 7,221 | 8,284 |
Amortization of prior service cost (credit) | 192 | 0 |
Net periodic benefit cost | 4,024 | 8,413 |
International | Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | 2,099 | 2,821 |
Expected return on plan assets | (2,218) | (2,947) |
Amortization of actuarial (gain) loss | 1,034 | 949 |
Amortization of prior service cost (credit) | 66 | 0 |
Net periodic benefit cost | $ 981 | $ 823 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Beginning and End of Period Equity Accounts (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $ 1,327,733 | $ 1,232,443 |
Net (loss) income | (11,317) | 7,178 |
Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | (53,226) | |
Other comprehensive income | (64,974) | 14,149 |
Stock compensation plans | 99 | (290) |
Cash dividends | (5,277) | (5,262) |
Acquisition of noncontrolling shareholders' interest | (62,272) | |
Ending Balance | $ 1,195,740 | $ 1,248,218 |
Dividends paid (in dollars per share) | $ 0.105 | $ 0.105 |
Total Parent Stockholders’ Equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $ 1,264,625 | $ 1,172,043 |
Net (loss) income | (11,591) | 6,979 |
Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | (52,682) | |
Other comprehensive income | 13,170 | |
Stock compensation plans | 99 | (290) |
Cash dividends | (5,277) | (5,262) |
Acquisition of noncontrolling shareholders' interest | (17,462) | |
Ending Balance | 1,177,712 | 1,186,640 |
Common Stock $1 Par Value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 87,850 | 87,850 |
Ending Balance | 87,850 | 87,850 |
Capital in Excess of Par Value | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 22,175 | 21,124 |
Stock compensation plans | (1,235) | (1,579) |
Acquisition of noncontrolling shareholders' interest | (5,714) | |
Ending Balance | 15,226 | 19,545 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 2,524,963 | 2,449,714 |
Net (loss) income | (11,591) | 6,979 |
Stock compensation plans | (43) | (64) |
Cash dividends | (5,277) | (5,262) |
Ending Balance | 2,508,052 | 2,451,367 |
Cumulative Other Comprehensive (Loss) Income | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | (447,580) | (461,589) |
Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | (52,682) | |
Other comprehensive income | 13,170 | |
Acquisition of noncontrolling shareholders' interest | (11,748) | |
Ending Balance | (512,010) | (448,419) |
Common Shares in Treasury | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | (922,783) | (925,056) |
Stock compensation plans | 1,377 | 1,353 |
Ending Balance | (921,406) | (923,703) |
Noncontrolling Shareholders’ Interests in Consolidated Subsidiaries | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 63,108 | 60,400 |
Net (loss) income | 274 | 199 |
Other comprehensive loss, excluding currency loss charged to equity as part of acquisition of noncontrolling shareholder interest | (544) | |
Other comprehensive income | 979 | |
Acquisition of noncontrolling shareholders' interest | (44,810) | |
Ending Balance | $ 18,028 | $ 61,578 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income (Loss) by Component - Cumulative Other Comprehensive Loss in Accompanying Consolidated Statements of Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,264,625 | |
Other comprehensive (loss) income before reclassifications | (84,089) | $ 7,145 |
Foreign currency translation effect | 4,708 | (1,460) |
Income tax effect | 8,841 | 245 |
Amount reclassified from accumulated other comprehensive income (loss) | (510) | 62 |
Income tax effect | (1,765) | (1,953) |
Other comprehensive (loss) income | (64,430) | 13,170 |
Ending balance | 1,177,712 | |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (447,580) | (461,589) |
Ending balance | (512,010) | (448,419) |
Cumulative Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (58,186) | (62,133) |
Other comprehensive (loss) income before reclassifications | (48,998) | 8,328 |
Other comprehensive (loss) income | (48,998) | 8,328 |
Ending balance | (107,184) | (53,805) |
Derivative Instruments | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (549) | 2,150 |
Other comprehensive (loss) income before reclassifications | (3,601) | (1,183) |
Income tax effect | 984 | 245 |
Amount reclassified from accumulated other comprehensive income (loss) | (510) | 62 |
Income tax effect | 53 | 88 |
Other comprehensive (loss) income | (3,074) | (788) |
Ending balance | (3,623) | 1,362 |
Post- retirement Benefits | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (388,845) | (401,606) |
Other comprehensive (loss) income before reclassifications | (31,490) | |
Foreign currency translation effect | 4,708 | (1,460) |
Income tax effect | 7,857 | |
Income tax effect | (1,818) | (2,041) |
Other comprehensive (loss) income | (12,358) | 5,630 |
Ending balance | (401,203) | (395,976) |
Net Prior Service | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Amount reclassified from accumulated other comprehensive income (loss) | 236 | (102) |
Actuarial Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Amount reclassified from accumulated other comprehensive income (loss) | $ 8,149 | $ 9,233 |
Comprehensive (Loss) Income A_3
Comprehensive (Loss) Income Attributable to Noncontrolling Shareholders' Interests (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Net income attributable to noncontrolling shareholders' interests | $ 274 | $ 199 |
Other comprehensive (loss) income: | ||
Currency translation adjustments | (544) | 979 |
Comprehensive (loss) income attributable to noncontrolling shareholders’ interests | $ (270) | $ 1,178 |
Contingent Liabilities - Additi
Contingent Liabilities - Additional Information (Detail) Tire in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)Tire | Dec. 31, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Minimum estimated sale of passenger, light truck, SUV, radial medium truck and motorcycle tires per year in North America | Tire | 30 | |
Maximum estimated sale of passenger, light truck, SUV, radial medium truck and motorcycle tires per year in North America | Tire | 35 | |
Estimated number of Company produced tires of different specifications | Tire | 300 | |
Product liability expenses, minimum | $ 0 | |
Product liability expenses, maximum | 33,000,000 | |
Product liability reserve balance | 123,429,000 | $ 117,219,000 |
Increase in product liability reserve due to self insured incidents | 9,334,000 | |
Settlements and changes in amount of reserves estimated liability increase (decrease) | (485,000) | |
Company paid to resolve cases and claims | 2,639,000 | |
Current portion product liability reserve balance | $ 18,577,000 | $ 25,366,000 |
Contingent Liabilities - Produc
Contingent Liabilities - Product Liabilities Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Product liability expense | $ 11,548 | $ 10,817 |
Business Segments - Additional
Business Segments - Additional Information (Detail) | Jan. 17, 2019Employee | Mar. 31, 2020StoreSegment | Jan. 24, 2020 |
Segment Reporting [Abstract] | |||
Number of reportable segments | Segment | 4 | ||
Noncontrolling Interest [Line Items] | |||
Number of stores | Store | 3 | ||
Number of segments combined | Segment | 2 | ||
Restructuring, expected number of positions eliminated | Employee | 300 | ||
Restructuring, remaining number of positions after elimination | Employee | 400 | ||
COOCSA | |||
Noncontrolling Interest [Line Items] | |||
Noncontrolling interest, ownership percentage | 41.57% |
Business Segments - Segment Fin
Business Segments - Segment Financial Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 531,694 | $ 619,163 |
Operating profit (loss) | (6,228) | 26,431 |
Interest expense | (5,007) | (8,314) |
Interest income | 1,696 | 3,380 |
Other pension and postretirement benefit expense | (4,210) | (9,362) |
Other non-operating income | 1,773 | 1,380 |
(Loss) Income before income taxes | (11,976) | 13,515 |
Americas Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 449,486 | 504,758 |
International Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 82,207 | 114,406 |
Operating Segments | Americas Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 457,055 | 514,936 |
Operating profit (loss) | 10,416 | 38,789 |
Operating Segments | International Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 102,387 | 143,785 |
Operating profit (loss) | (10,279) | (1,339) |
Intercompany | ||
Segment Reporting Information [Line Items] | ||
Net sales | (27,748) | (39,558) |
Operating profit (loss) | 586 | (566) |
Intercompany | Americas Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 7,569 | 10,178 |
Intercompany | International Tire | ||
Segment Reporting Information [Line Items] | ||
Net sales | 20,180 | 29,379 |
Corporation | ||
Segment Reporting Information [Line Items] | ||
Operating profit (loss) | $ (6,951) | $ (10,453) |
Uncategorized Items - a20200331
Label | Element | Value |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | $ 6,669,000 |
Restricted Cash, Current | us-gaap_RestrictedCashCurrent | 6,410,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | 1,597,000 |
Restricted Cash, Noncurrent | us-gaap_RestrictedCashNoncurrent | $ 1,491,000 |