XML 42 R27.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segments
 12 Months Ended
Dec. 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 ACTR, and through off-take agreements with PCT and Sailun Vietnam through December 31, 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 primarily 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, in the PRC, 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, and ACTR, a joint venture manufacturing facility located in Vietnam, serve as global sources of TBR tire production for the Company. The segment also procured certain TBR tires under off-take agreements with PCT and Sailun Vietnam. 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 substantially all 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:
Twelve Months Ended December 31,
202020192018
Net sales:
Americas Tire
External customers$2,148,828 $2,315,497 $2,330,457 
Intercompany22,061 38,229 32,189 
2,170,889 2,353,726 2,362,646 
International Tire
External customers372,246 437,143 477,621 
Intercompany109,409 96,860 163,355 
481,655 534,003 640,976 
Eliminations(131,470)(135,090)(195,560)
Consolidated net sales$2,521,074 $2,752,639 $2,808,062 
Operating profit (loss):
Americas Tire$280,349 $237,753 $229,500 
International Tire3,167 (13,390)(14,044)
Unallocated corporate charges(54,690)(49,968)(51,564)
Eliminations2,055 60 1,353 
Consolidated operating profit$230,881 $174,455 $165,245 
Interest expense$(22,707)$(31,189)$(32,181)
Interest income3,569 9,458 10,216 
Other pension and postretirement benefit expense(25,419)(41,567)(27,806)
Other non-operating income (expense)4,579 (1,485)(1,416)
Income before income taxes$190,903 $109,672 $114,058 
Depreciation and amortization expense:
Americas Tire (a)
$93,469 $95,761 $93,978 
International Tire41,654 31,654 34,564 
Corporate (a)
23,724 20,639 18,619 
Consolidated depreciation and amortization expense$158,847 $148,054 $147,161 
Segment assets:
Americas Tire$1,478,125 $1,543,779 $1,513,534 
International Tire736,877 739,076 662,226 
Corporate and other756,571 519,483 458,445 
Consolidated assets$2,971,573 $2,802,338 $2,634,205 
Expenditures for long-lived assets:
Americas Tire$114,565 $111,819 $112,444 
International Tire31,383 62,334 71,667 
Corporate5,250 28,569 9,188 
Consolidated expenditures for long-lived assets$151,198 $202,722 $193,299 
Geographic information for long-lived assets follows:
As of December 31,
202020192018
Net sales
United States$2,071,981 $2,175,599 $2,196,424 
Rest of world449,093 577,040 611,638 
Consolidated net sales$2,521,074 $2,752,639 $2,808,062 
Long-lived assets (b)
United States$714,139 $683,769 $595,768 
PRC232,553 239,889 232,339 
Rest of world222,816 204,336 173,814 
Consolidated long-lived assets$1,169,508 $1,127,994 $1,001,921 
(a) - Depreciation and amortization of $51,210 and $36,713 has been reclassified in 2019 and 2018, respectively, from Corporate to Americas Tire to properly present such expense as reflected in the segment results for the corresponding periods. .
(b) - Beginning in 2019, the company includes Right of Use Assets in the Long-lived assets for each segment.
The following customer of the Americas Tire Operations segment contributed ten percent or more of the Company’s total consolidated net sales in 2020, 2019 or 2018. Net sales and percentage of consolidated Company net sales for these customers in 2020, 2019 and 2018 were as follows:
202020192018
CustomerNet SalesConsolidated
Net Sales		Net SalesConsolidated
Net Sales		Net SalesConsolidated
Net Sales
American Tire Distributors, Inc.$329,631 13 %$311,559 11 %$310,070 11 %