Cooper Tire & Rubber Company Reports Fourth Quarter and Full-Year 2013 Results

  Cooper Tire & Rubber Company Reports Fourth Quarter and Full-Year 2013
  Results

  *Second best full-year operating profit in Cooper’s 100-year history,
    excluding the divested automotive group. Fourth quarter operating profit
    of $47 million or 5.5% of net sales, and full-year operating profit of
    $241 million, or 7% of net sales
  *Fourth quarter net sales of $861 million and full-year net sales of $3.4
    billion
  *Fourth quarter net income of $0.31 per share attributable to Cooper Tire &
    Rubber Company
  *Full-year net income of $1.73 per share attributable to Cooper Tire &
    Rubber Company

Business Wire

FINDLAY, Ohio -- March 14, 2014

Cooper Tire & Rubber Company (NYSE: CTB) today reported results for the fourth
quarter and full year 2013. Fourth quarter net sales were $861 million, a
decrease of $201 million, or 19%, compared with the same period a year ago.
Operating profit for the fourth quarter was $47 million, which is $77 million
lower than fourth quarter 2012 and 5.5% of net sales. The company reported net
income attributable to Cooper Tire & Rubber Company of $0.31 per share, or $20
million, in the fourth quarter. This compares with $73 million, or $1.15 per
share, for the same period last year.

“Delivering operating profit of $241 million in 2013 and exiting the year with
a strong balance sheet is a testament to the dedication and commitment of
Cooper people worldwide and to the resilience of our business model,” said
Cooper Chairman, Chief Executive Officer and President Roy Armes. “These
results were achieved despite several unique challenges in 2013, the impact of
which will diminish as we move forward in 2014. I am proud of our organization
and confident in our strategic plan, which we believe will produce results
that create value for our shareholders over the long term.”

Fourth quarter profits compared with the prior year included $27 million in
unusual items related to the negative impacts of labor actions taken at the
Cooper Chengshan (Shandong) Tire Company, Ltd. (CCT) joint venture. This
figure included $25 million from lower volumes in the North America and
International business segments and $2 million of manufacturing inefficiencies
in the International business segment. Fourth quarter results also included $9
million of costs resulting from the now terminated merger agreement with
Apollo Tyres. In addition to these unusual items, unfavorable price and mix
reduced profits by $68 million and were only partially offset by $31 million
of lower raw material costs. Manufacturing costs were unfavorable by $10
million, including $11 million of costs from production curtailments in North
American plants. Lower volumes not related to CCT reduced profits by $8
million compared with the same period in 2012. Selling, general and
administrative costs, excluding merger related expenses, were $14 million
lower than the fourth quarter of 2012 reflecting lower incentive compensation
expenses and lower stock-based liabilities.

The company ended the fourth quarter with $398 million in cash and cash
equivalents, an increase of $46 million compared with the prior-year fourth
quarter balance of $352 million.

For the year ended Dec. 31, 2013, the company reported net sales of $3.4
billion, a decrease of $0.8 billion, or 18%, from 2012. Operating profit for
the full year 2013 was $241 million, or 7% of net sales. The company reported
net income of $1.73 per share on a diluted basis for the full year.

A summary presentation of information related to the quarter is posted on the
company's website at
http://coopertire.com/Investors/Financials/Quarterly-Summary.aspx.

North America Tire Operations

North America Tire Operations achieved net sales of $628 million during the
fourth quarter, down 23% from fourth quarter 2012 net sales of $811 million.
Lower sales resulted from lower unit volumes and unfavorable price and mix.
Unit shipments for the North American segment decreased 13% compared with the
prior-year fourth quarter. Cooper's total light vehicle tire shipments in the
United States were down 10% during the quarter compared with Rubber
Manufacturers Association (RMA) member shipments and total industry
shipments—which include estimates for non-RMA members—that increased 2% as
reported by the RMA.

Operating profit for the North American segment was $35 million for the fourth
quarter, or 5.5% of net sales. This is a decrease of $68 million compared with
fourth quarter 2012. Lower volumes caused by the issues at CCT contributed $13
million to this profit reduction. In addition, unfavorable price and mix of
$47 million was partially offset by $12 million in lower raw material costs.
Lower volume not attributable to issues at CCT reduced profit by $9 million.
Manufacturing costs were $8 million higher, which is more than explained by
$11 million of production curtailment effects. All other costs were $3 million
higher, reflecting increased distribution costs driven by carrying higher
inventories, and shipping inefficiencies related to the short-term effect of
ERP system deployments in U.S. operations.

For the year ended Dec. 31, 2013, the North American segment reported net
sales of $2.5 billion, $0.6 billion lower than the prior year. Operating
profit was $204 million for the year, compared with $296 million in 2012.

International Tire Operations

The company's International Tire Operations reported fourth quarter net sales
of $283 million, a decrease of $59 million, or 17%, compared with the same
period a year ago. The decrease reflects lower unit volumes of $36 million and
unfavorable pricing and mix of $31 million, which were partially offset by $8
million of favorable currency effects. Sales volumes in Asia decreased 13%,
while European sales volumes decreased 19%. Lower sales in Asia were driven by
the issues at CCT as well as reduced passenger tire exports, including
intercompany shipments. Lower European sales volumes reflect continued
challenging market conditions, which negatively impacted performance.

The International segment achieved fourth quarter operating profit of $22
million, or 7.7% of net sales, compared with $32 million, or 9.4% of net
sales, for the same period a year ago. Profits decreased $10 million, which
was more than explained by the issues at CCT, including $12 million from lower
volume and $2 million from manufacturing inefficiencies. In addition to these
impacts, raw materials costs were lower by $22 million, which was completely
offset by unfavorable pricing and mix of $22 million. All other costs and
currency effects were $4 million lower in the fourth quarter of 2013 compared
with the same period in 2012.

For the year ended Dec. 31, 2013, the International segment reported net sales
of $1.2 billion, a decrease of $0.3 billion from the prior year. Operating
profit was $84 million for the year compared with $144 million for 2012.

Outlook

Raw material prices decreased by 8% compared with the fourth quarter of 2012
and 1% from the third quarter to the fourth quarter of 2013. Management
anticipates first quarter 2014 raw material prices will be approximately 3%
lower than the fourth quarter of 2013. The long-term raw material outlook is
for prices to generally trend higher with periods of volatility. Capital
expenditures for 2014 are expected to be between $165 million and $175
million.

“We look forward to moving ahead in 2014,” Armes said. “With the merger
agreement terminated, operations at CCT returning to normal, and our ERP
deployments in the U.S. nearing completion, the challenges of 2013 are largely
behind us. Overall, we believe Cooper will begin to recover unit volumes this
year and grow volumes at a rate equal to or higher than the industry in key
markets. This will allow us to continue to effectively leverage our flexible
global manufacturing and distribution footprint to deliver on our strategic
plan objectives, which focus on driving stockholder value as a top priority.”

Fourth Quarter 2013 Conference Call Today at 11 a.m. EDT

Management will discuss the financial and operating results for the fourth
quarter and full year 2013 on a conference call for analysts and investors
today at 11 a.m. EDT. A live webcast of the call may be accessed on the
investor relations page of the company’s website at
http://coopertire.com/Investors.aspx or at
http://www.media-server.com/m/p/gjbhdo3i. Within two hours following the
conference call, the webcast will be archived and available for 30 days at
these websites.

Forward Looking Statements

This release contains what the Company believes are “forward-looking
statements,” as that term is defined under the Private Securities Litigation
Reform Act of 1995, regarding projections, expectations or matters that the
Company anticipates may happen with respect to the future performance of the
industries in which the Company operates, the economies of the United States
and other countries, or the performance of the Company itself, which involve
uncertainty and risk. Such “forward-looking statements” are generally, though
not always, preceded by words such as “anticipates,” “expects,” “will,”
“should,” “believes,” “projects,” “intends,” “plans,” “estimates,” and similar
terms that connote a view to the future and are not merely recitations of
historical fact. Such statements are made solely on the basis of the Company’s
current views and perceptions of future events, and there can be no assurance
that such statements will prove to be true.

It is possible that actual results may differ materially from those
projections or expectations due to a variety of factors, including but not
limited to:

  *volatility in raw material and energy prices, including those of rubber,
    steel, petroleum based products and natural gas and the unavailability of
    such raw materials or energy sources;
  *the failure of the Company’s suppliers to timely deliver products in
    accordance with contract specifications;
  *changes in economic and business conditions in the world;
  *failure to implement information technologies or related systems,
    including failure by the Company to successfully implement an ERP system;
  *increased competitive activity including actions by larger competitors or
    lower-cost producers;
  *the failure to achieve expected sales levels;
  *changes in the Company’s customer relationships, including loss of
    particular business for competitive or other reasons;
  *the ultimate outcome of litigation brought against the Company, including
    stockholders lawsuits relating to the Apollo merger as well as products
    liability claims, in each case which could result in commitment of
    significant resources and time to defend and possible material damages
    against the Company;
  *changes to tariffs or the imposition of new tariffs or trade restrictions;
  *changes in pension expense and/or funding resulting from investment
    performance of the Company’s pension plan assets and changes in discount
    rate, salary increase rate, and expected return on plan assets
    assumptions, or changes to related accounting regulations;
  *government regulatory and legislative initiatives including environmental
    and healthcare matters;
  *volatility in the capital and financial markets or changes to the credit
    markets and/or access to those markets;
  *changes in interest or foreign exchange rates;
  *an adverse change in the Company’s credit ratings, which could increase
    borrowing costs and/or hamper access to the credit markets;
  *the risks associated with doing business outside of the United States;
  *the failure to develop technologies, processes or products needed to
    support consumer demand;
  *technology advancements; the inability to recover the costs to develop and
    test new products or processes;
  *the impact of labor problems, including labor disruptions at the Company,
    its joint ventures, including CCT, or at one or more of its large
    customers or suppliers;
  *failure to attract or retain key personnel;
  *consolidation among the Company’s competitors or customers;
  *inaccurate assumptions used in developing the Company’s strategic plan or
    operating plans or the inability or failure to successfully implement such
    plans;
  *failure to successfully integrate acquisitions into operations or their
    related financings may impact liquidity and capital resources;
  *the ability to sustain operations at CCT, including obtaining financial
    and other operational data of CCT;
  *changes in the Company’s relationship with its joint-venture partners, or
    changes in the ownership structure of its joint ventures, including
    changes resulting from the previously announced agreement between the
    Company and the CCT joint-venture partner;
  *the inability to obtain and maintain price increases to offset higher
    production or material costs;
  *inability to adequately protect the Company’s intellectual property
    rights;
  *inability to use deferred tax assets; and
  *the ultimate outcome of legal actions brought by the Company against
    wholly-owned subsidiaries of Apollo Tyres Ltd.

It is not possible to foresee or identify all such factors. Any
forward-looking statements in this release are based on certain assumptions
and analyses made by the Company in light of its experience and perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. Prospective
investors are cautioned that any such statements are not a guarantee of future
performance and actual results or developments may differ materially from
those projected.

The Company makes no commitment to update any forward-looking statement
included herein or to disclose any facts, events or circumstances that may
affect the accuracy of any forward-looking statement. Further information
covering issues that could materially affect financial performance is
contained in the Company's periodic filings with the U. S. Securities and
Exchange Commission (“SEC”).

About Cooper Tire & Rubber Company

Cooper Tire & Rubber Company (NYSE: CTB)  is the parent company of a global
family of companies that specialize in the design, manufacture, marketing, and
sales of passenger car and light truck tires. Cooper has joint ventures,
affiliates and subsidiaries that also specialize in medium truck, motorcycle
and racing tires. Cooper's headquartersis in Findlay, Ohio, with
manufacturing, sales, distribution, technical and design facilities within its
family of companies located in 11 countries around the world. For more
information on Cooper, visit www.coopertire.com, www.facebook.com/coopertire
or www.twitter.com/coopertire.

                                                
Cooper Tire & Rubber Company
Consolidated Statements of Income

(Dollar amounts in thousands except per share amounts)

                       Quarter Ended               Year Ended
                       December 31                 December 31
                       2012          2013         2012          2013
                       (Unaudited)
                                                                  
Net sales              $1,062,470     $861,007     $4,200,836     $3,439,233
Cost of products       870,693       750,298     3,546,568     2,923,042  
sold
Gross profit           191,777        110,709      654,268        516,191
                                                                  
Selling, general and   67,542        63,733      257,306       275,477    
administrative
Operating profit       124,235        46,976       396,962        240,714
                                                                  
Interest expense       5,573          6,890        29,546         27,906
Interest income        646            103          2,560          810
Other income           (1,859     )   (60      )   (1,526     )   (647       )
(expense)
Income before income   117,449        40,129       368,450        212,971
taxes
                                                                  
Income tax expense     34,374        14,302      116,024       79,406     
                                                                  
Net income             83,075         25,827       252,426        133,565
                                                                  
Net income
attributable to
noncontrolling         10,131        6,212       32,055        22,552     
shareholders'
interests
                                                                  
Net income
attributable to        $72,944       $19,615     $220,371      $111,013   
Cooper Tire & Rubber
Company
                                                                  
Basic earnings per
share:
                                                                  
Net income
attributable to
Cooper Tire & Rubber   $1.16          $0.31        $3.52          $1.75
Company common
stockholders
                                                                  
Diluted earnings per
share:
                                                                  
Net income
attributable to
Cooper Tire & Rubber   $1.15          $0.31        $3.49          $1.73
Company common
stockholders
                                                                  
Weighted average shares outstanding
(000s):
Basic                  63,029         63,372       62,561         63,327
Diluted                63,764         64,294       63,224         64,282
Depreciation and       $32,722        $35,529      $128,916       $134,751
amortization
Capital expenditures   $63,859        $45,036      $187,336       $180,448
                                                                  
Segment information
Net sales
North American Tire    $810,995       $628,082     $3,095,558     $2,486,586
International Tire     341,645        282,778      1,575,998      1,241,529
Eliminations           (90,170    )   (49,853  )   (470,720   )   (288,882   )
                                                                  
Segment profit
(loss)
North American Tire    $103,183       $34,858      $295,900       $204,239
International Tire     32,208         21,668       143,589        83,990
Eliminations           1,355          471          (5,654     )   3,371
Unallocated            (12,511    )   (10,021  )   (36,873    )   (50,886    )
corporate charges
                                                                             

                                                            
CONSOLIDATED BALANCE SHEETS
                                                                   
                                                  December 31
                                                  2012             2013
                                                                   
Assets
Current assets:
Cash and cash equivalents                         $351,817         $397,731
Notes receivable                                  47,646           86,965
Accounts receivable                               415,460          360,405
Inventories                                       561,868          517,175
Other current assets                              72,904           92,514
Total current assets                              1,449,695        1,454,790
                                                                   
Net property, plant and equipment                 929,255          974,269
Goodwill                                          18,851           18,851
Restricted cash                                   7,741            2,759
Deferred income tax assets                        228,849          111,644
Intangibles and other assets                      166,769          175,834
                                                  $2,801,160       $2,738,147
                                                                   
                                                                   
Liabilities and Equity
Current liabilities:
Notes payable                                     $32,836          $22,105
Trade payables and accrued liabilities            601,689          513,512
Income taxes                                      18,297           11,098
Current portion of long-term debt                 2,319            17,868
Total current liabilities                         655,141          564,583
                                                                   
Long-term debt                                    336,142          320,959
Postretirement benefits other than pensions       291,546          238,653
Pension benefits                                  432,922          291,808
Other long-term liabilities                       168,967          157,918
Deferred income tax liabilities                   8,026            6,601
Equity                                            908,416          1,157,625
                                                  $2,801,160       $2,738,147

Contact:

Cooper Tire & Rubber Company
Investor Contact:
419-424-4165
investorrelations@coopertire.com
or
Media Contact:
Anne Roman, 419-429-7189
alroman@coopertire.com
 
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