Business Segments

3 Months Ended

Mar. 31, 2021

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 wheels and 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 China-based Qingdao Ge Rui Da Rubber Co., Ltd. ("GRT") and ACTR Company Limited ("ACTR"). TBR tires had also been sourced through off-take agreements with Prinx Chengshan (Shandong) Tire Company Ltd. ("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 People’s Republic of China ("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 through December 31, 2020. The segment sells a majority of its tires in the replacement market, with a portion also sold to OEMs.

The following table details segment financial information:

	Three Months Ended March 31,
	2021		2020
Net sales:
Americas Tire
External customers	$	554,300	$	449,486
Intercompany	8,021		7,569
	562,321		457,055
International Tire
External customers	101,527		82,207
Intercompany	37,842		20,180
	139,369		102,387
Eliminations	(45,863)		(27,748)
Consolidated net sales	$	655,827	$	531,694
Operating profit (loss):
Americas Tire	$	59,772	$	10,416
International Tire	3,207		(10,279)
Unallocated corporate charges	(23,032)		(6,951)
Eliminations	(2,169)		586
Consolidated operating profit (loss)	$	37,778	$	(6,228)
Interest expense	$	(5,130)	$	(5,007)
Interest income	699		1,696
Other pension and postretirement benefit expense	(2,846)		(4,210)
Other non-operating income	133		1,773
Income (Loss) before income taxes	$	30,634	$	(11,976)