-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, g1F+swIH09zGE/PUxnrxlGXMD0NoLg5DG0adJm0EbV2VOOWZgPO9FfdBp5ot9Knb LPnDBGK9gbh4iQmE2THmGw== 0000024491-95-000008.txt : 19950622 0000024491-95-000008.hdr.sgml : 19950622 ACCESSION NUMBER: 0000024491-95-000008 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950621 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COOPER TIRE & RUBBER CO CENTRAL INDEX KEY: 0000024491 STANDARD INDUSTRIAL CLASSIFICATION: TIRES AND INNER TUBES [3011] IRS NUMBER: 344297750 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-04329 FILM NUMBER: 95548333 BUSINESS ADDRESS: STREET 1: LIMA & WESTERN AVENUES CITY: FINDLAY STATE: OH ZIP: 45840 BUSINESS PHONE: 4194231321 10-K/A 1 FORM 10-K/A NO. 1 FOR THE PERIOD ENDING 12/31/94 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A No. 1 (Mark One) (X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 1994 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _________to________ Commission File Number 1-4329 COOPER TIRE & RUBBER COMPANY (Exact name of registrant as specified in its charter) DELAWARE 34-4297750 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Lima and Western Avenues, Findlay, Ohio 45840 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (419) 423-1321 Securities registered pursuant to Section 12(b) of the Act: (Name of each exchange on (Title of each class) which registered) Common Stock, $1 par per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) State the aggregate market value of the voting stock held by non-affiliates of the registrant (computed by reference to the closing price on the Composite Tape for securities listed on the New York Stock Exchange as of March 6, 1995). $2,351,188,600 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. (Class) (Outstanding at March 6, 1995) Common Stock, $1 par per share 83,638,872 DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated: Proxy statement dated March 21, 1995 - Part III EXHIBIT INDEX appears on the following two pages INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS (As amended June 21, 1995 to file financial statements and supplemental schedules for the employee benefit plans identified below as exhibits (99)) Page(s) FINANCIAL STATEMENTS: Reference --------- Consolidated Statements of Income for the years ended December 31, 1994, 1993 and 1992 Consolidated Balance Sheets at December 31, 1994 and 1993 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1994, 1993 and 1992 Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992 Notes to Consolidated Financial Statements Report of Independent Auditors SUPPLEMENTARY INFORMATION: Quarterly Financial Data (Unaudited) FINANCIAL STATEMENTS SCHEDULES: II Valuation and qualifying accounts EXHIBITS: (3) Certificate of Incorporation and Bylaws (i) Certificate of Incorporation, as restated and filed with the Secretary of State of Delaware on May 17, 1993, is incorporated herein by reference from Exhibit 3(i) of the Company's Form 10-Q for the quarter ended June 30, 1993 (ii) Bylaws, as amended May 5, 1987, are incorporated herein by reference from Exhibit 19 of the Company's Form 10-Q for the quarter ended June 30, 1987 (4) Description of the Common Stock of the Company (10) Description of management contracts, compensatory plans, contracts, or arrangements is incorporated herein by reference from pages 6 through 13 of the Company's Proxy Statement dated March 21, 1995. The following related documents are also incorporated by reference: a) 1981 Incentive Stock Option Plan - Form S-8 Registration Statement No. 2-77400, Exhibit 15(a) b) 1986 Incentive Stock Option Plan - Form S-8 Registration Statement No. 33-5483, Exhibit 4(a) c) Thrift and Profit Sharing Plan - Form S-8 Registration Statement No. 2-58577, Post-Effective Amendment No. 6, Exhibit 4 d) Employment Agreements - Form 10-K for fiscal year ended December 31, 1987, Exhibit 10 (continued) e) 1991 Stock Option Plan for Non-Employee Directors - Form S-8 Registration Statement No. 33-47980 and Appendix to the Company's Proxy Statement dated March 26, 1991 (11) Statement regarding computation of earnings per share is presented on page 28 of this Annual Report on Form 10-K (13) Annual report to security holders, Form 10-Q or quarterly report to security holders (23) Consent of Ernst & Young LLP (24) Powers of Attorney (27) Financial Data Schedule (99) Operations Review and Product Overview as published in the Company's Annual Report to Stockholders for its fiscal year ended December 31, 1994 Undertakings of the Company Financial statements and schedules of the Cooper Tire & Rubber Company Thrift and Profit Sharing Plan for the fiscal year ended December 31, 1994 1-14 Financial statements and schedule of the Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan for the fiscal year ended December 31, 1994 15-26 Financial statements and schedule of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant for the fiscal year ended December 31, 1994 27-37 Financial statements and schedule of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant for the fiscal year ended December 31, 1994 38-48 Financial statements and schedule of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant for the fiscal year ended December 31, 1994 49-60 Financial statements and schedule of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) for the fiscal year ended December 31, 1994 61-72 Financial statements and schedule of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) for the fiscal year ended December 31, 1994 73-83 All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedules, or because the information required is included in the financial statements or the notes thereto. SIGNATURES Registrant has duly caused this Form 10-K/A No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized. COOPER TIRE & RUBBER COMPANY PATRICK W. ROONEY, Chairman of the Board, President, Principal Executive Officer and Director J. ALEC REINHARDT, Executive Vice President and Director (Principal Financial Officer) JOHN FAHL, Vice President and Director JULIEN A. FAISANT, Vice President and Corporate Controller (Principal Accounting Officer) DELMONT A. DAVIS, Director EDSEL D. DUNFORD, Director DENNIS J. GORMLEY, Director IVAN W. GORR, Director JOSEPH M. MAGLIOCHETTI, Director ALLAN H. MELTZER, Director LEON F. WINBIGLER, Director By /s/ Stan C. Kaiman -------------------------------- STAN C. KAIMAN, Attorney-in-fact Date: June 21, 1995 -------------- EXHIBIT (23) CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 2-58577, 33-35071, 33-47979, 33-47981, 33-47982, 33-52499 and 33-52505) of Cooper Tire & Rubber Company pertaining to the Company's Thrift and Profit Sharing Plan, the Texarkana Pre-Tax Savings Plan, the Pre-Tax Savings Plan at the Auburn Plant, the Pre-Tax Savings Plan at the Findlay Plant, the Pre-Tax Savings Plan at the El Dorado Plant, the Pre-Tax Savings Plan (Bowling Green - Hose) and the Pre-Tax Savings Plan (Bowling Green - Sealing), respectively, of our report dated May 31, 1995 with respect to the financial statements and schedules of the Cooper Tire & Rubber Company Thrift and Profit Sharing Plan, the Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan, the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant, the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant, the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant, the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose), and the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) included in Amendment No. 1 to the Annual Report (Form 10-K) of Cooper Tire & Rubber Company for the year ended December 31, 1994. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP Toledo, Ohio June 21, 1995 EXHIBIT (99) Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Financial Statements and Schedules Years ended December 31, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedules Item 27a - Schedule of Assets Held for Investment Purposes 11 Item 27d - Schedule of Reportable Transactions 12 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 1 Report of Independent Auditors Thrift and Profit Sharing Plan Committee Cooper Tire & Rubber Company Thrift and Profit Sharing Plan We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Thrift and Profit Sharing Plan as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Thrift and Profit Sharing Plan at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedules of assets held for investment purposes as of December 31, 1994 and reportable transactions for the year then ended are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The schedules have been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 2 Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Statements of Assets Available for Plan Benefits
December 31 1994 1993 ------------ ------------ Assets Investments (Notes 4 & 5): Value of interest in Pooled Fund $280,901,591 $ - Cash with interest 8,094,103 66,322,977 Cooper Tire & Rubber Company common stock 3,967,913 245,387,475 Mutual funds: The Investment Company of America Fund - 3,492,601 The Washington Mutual Investors Fund - 2,576,329 ----------- ----------- - 6,068,930 Short-term investments 320,427 1,694,818 ----------- ----------- 293,284,034 319,474,200 Contributions receivable: Employer 2,937,370 3,231,792 Participants - 874,208 ----------- ----------- 2,937,370 4,106,000 ----------- ----------- Assets available for plan benefits $296,221,404 $323,580,200 =========== =========== See accompanying notes.
2 3 Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Statements of Changes in Assets Available for Plan Benefits
Year ended December 31 1994 1993 ------------ ------------ Additions: Contributions: Participants $ 10,344,408 $ 9,439,517 Employer (gross amount before reduction for forfeitures) 7,017,370 6,370,650 Less forfeitures arising from withdrawals (180,000) (145,152) ----------- ------------ Net employer contributions 6,837,370 6,225,498 ----------- ------------ 17,181,778 15,665,015 Investment income (loss): Net depreciation in fair value of investments (Note 5) (11,877,884) (106,812,058) Net loss from Pooled Fund (Note 4) (6,585,997) - Interest 2,753,156 4,520,526 Dividends 1,139,292 2,327,776 ----------- ------------ (14,571,433) (99,963,756) ----------- ------------ Total additions 2,610,345 (84,298,741) Participants' withdrawals (29,969,141) (17,940,375) Decrease in assets available for plan benefits during the year (27,358,796) (102,239,116) Assets available for plan benefits at beginning of year 323,580,200 425,819,316 ----------- ------------ Assets available for plan benefits at end of year $296,221,404 $323,580,200 =========== =========== See accompanying notes.
3 4 Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. The cash with interest option includes $8,094,103 at December 31, 1994 invested in annuity contracts with Confederation Life of Canada. This insurance company was placed under the control of Canadian and United States governmental regulatory authorities in August, 1994. To protect the interests of the policyholders, the regulators have frozen the assets of the insurance company. Currently, the amount of loss, if any, on these contracts is not determinable. The Plan's investment contracts with Confederation Life now have uncertain maturity dates and uncertain interest rates. At December 31, 1994, these investments are valued in the financial statements at cost with interest accrued through July 31, 1994. The Company believes this reflects the fair value of the investments at this time. On July 31, 1994 certain investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participants' election. Prior to September 1, 1994, normal delays occurred in recording contributions resulting in the recording of a participants' contribution receivable. Subsequent to the above date, transactions are recorded daily with no delays in processing thereby eliminating the accrual for the year ended December 31, 1994. Contributions from the Company are accrued in the period in which they become obligations of the Company and may be in the form of cash, treasury stock or authorized but unissued common stock of the Company. Company contributions are invested in common stock of the Company until the contributions become vested after which they are invested as directed by the participant. (continued) 4 5 1. Significant Accounting Policies (continued) Net Realized Gains on Sales of Investments Net realized gains on sales of investments are based on the historical cost of investments for financial reporting purposes and on the fair value of investments as of the beginning of the year, or fair value at the date of acquisition if acquired during the year, for the Annual Return/Report Form 5500. Reclassification Certain 1993 amounts in the statement of changes in assets available for plan benefits have been combined to conform to the 1994 presentation. 2. Summary of Plan The Cooper Tire & Rubber Company Thrift and Profit Sharing Plan (Plan) is a defined contribution plan administered by a Thrift Plan Committee appointed by the Company. Participation in the Plan is voluntary and any salaried employee of the Company is eligible to participate in the Plan if he or she has completed one year of continuous credited service. At December 31, 1994, 3,682 participants had designated investment of their contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. The Plan provides the following: - After-tax dollar (ATD) contributions may be made in one percent multiples of participant's compensation up to sixteen percent. - Pre-tax dollar qualifier (PDQ) contributions may be made in one percent multiples of participant's compensation up to fifteen percent. - In no event shall the aggregate of a participant's contributions exceed sixteen percent of participant's compensation. - The Company will contribute to the Plan each year from current or accumulated earnings an amount equal to the lesser of: (continued) 5 6 2. Summary of the Plan (continued) (a) the aggregate of all ATD and PDQ contributions which represent up to six percent of each participant's compensation, less any forfeitures, or (b) an amount equal to fifteen percent of the Company's current year pre-tax earnings, exclusive of any deductions for contributions to the Plan, in excess of ten percent of the stockholders' equity of the Company at the beginning of the year. The Company's Board of Directors, at its discretion, may waive the limitation in (b) and contribute from current or accumulated earnings an amount not to exceed the limitation in (a). The Company's contributions are allocated to each participant's account in proportion to his or her ATD contributions and PDQ contributions up to an aggregate of six percent of the participant's compensation for each year. The Company contribution to a participant's account becomes vested after five years of continuous credited service; thereafter, Company contributions become vested when made. In addition, participants will have a fully vested right to the Company's contributions upon termination from the Plan due to retirement, total and permanent disability, or death and shall be eligible to receive the Company's contribution for that year as if he or she had not terminated participation. Earnings attributed to Company contributions allocated to a participant's account and those attributed to a participant's contributions are vested immediately. The Plan provides for total or partial withdrawal of a participant's account. Except for the unvested portion of Company contributions, a participant may withdraw the total of his or her ATD contributions and Company contributions at any time. No amounts may be withdrawn by a participant from PDQ contributions prior to termination of employment or plan termination unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Partial withdrawals may be made twice in any calendar year. However, all withdrawals relating to PDQ contributions are subject to Internal Revenue Service (IRS) regulations. Investment options for future contributions and reallocation of balances among the investment options may be made daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. The Company has reserved the right to amend, modify, suspend or terminate the Plan at any time by action of its Board of Directors. Upon termination of the Plan, or upon the complete discontinuance of Company contributions under the Plan, the rights of each participant to the assets then held for his or her account under the Plan shall be nonforfeitable. 3. Income Tax Status The IRS issued a determination letter dated November 1, 1994 advising that the Plan, as amended, meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). (continued) 6 7 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ----------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ---------- -------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- (continued) 7 8 Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------ Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ---------- -------- ---------- ---------- Interest $ 25,088 $1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- --------- ------- ------ Net investment gain (loss) $(7,980,450) $1,084,760 $134,918 $44,714 ========== ========= ======= ======
The value of the Plan's interest in the Pooled Fund is $280,901,591 and net investment loss from the Pooled Fund is $6,585,997 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 96.4% Cash with Interest Fund 97.3% The Investment Company of America Fund 87.1% The Washington Mutual Investors Fund 84.2% The net investment gains (losses) of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments Certain Plan investments are held by National City Bank as trustee under an agreement which directs the trustee to invest participant contributions based on their investment elections. Contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, are invested in cash with interest investments. The net appreciation (depreciation) of the Plan's investments consisted of the following:
Year Ended December 31 1994 1993 ----------- ----------- Cooper Tire & Rubber Company common stock $(11,711,465) $(107,043,838) Mutual funds (166,419) 231,780 ----------- ------------ $(11,877,884) $(106,812,058) =========== ============
(continued) 8 9 5. Investments (continued) Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds ---------------------- Cooper Tire The The & Rubber Investment Washington Company Cash Company of Mutual Common with America Investors Stock Fund Interest Fund Fund Total ----------- --------- ---------- ---------- ------ Balance at December 31, 1992 $ 360,826,747 $61,482,135 $2,160,505 $1,349,929 $ 425,819,316 Additions (deductions): Contributions: Participants 6,736,664 2,534,214 90,216 78,423 9,439,517 Employer (gross amount before reduction for forfeitures) 6,370,650 6,370,650 Less forfeitures arising from withdrawals (145,152) (145,152) ------------ ---------- --------- ---------- ----------- Net employer contributions 6,225,498 6,225,498 ------------ ---------- --------- ---------- ----------- 12,962,162 2,534,214 90,216 78,423 15,665,015 Net appreciation (depreciation)(107,043,838) 119,980 111,800 (106,812,058) Interest and dividend income 2,030,250 4,490,206 207,809 120,037 6,848,302 ------------ ---------- --------- ---------- ----------- Total additions (deductions) (92,051,426) 7,024,420 418,005 310,260 (84,298,741) Participants' withdrawals (10,610,174) (7,303,205) (6,800) (20,196) (17,940,375) Transfers between options (7,670,842) 5,312,793 1,387,527 970,522 - ----------- ---------- --------- --------- ----------- Balance at December 31, 1993 250,494,305 66,516,143 3,959,237 2,610,515 323,580,200 Additions (deductions): Contributions: Participants 4,296,150 1,601,605 71,084 68,449 6,037,288 Employer (gross amount before reduction for forfeitures) 7,017,370 7,017,370 Less forfeitures arising from withdrawals (180,000) (180,000) ------------ ---------- --------- ---------- ----------- (continued) 9 10 Net employer contributions 6,837,370 6,837,370 ------------ ---------- --------- ---------- ----------- 11,133,520 1,601,605 71,084 68,449 12,874,658 Net depreciation(11,711,465) (87,763) (78,656) (11,877,884) Interest and dividend income 1,081,584 2,738,161 40,237 32,466 3,892,448 ------------ ---------- --------- ---------- ----------- Total additions 503,639 4,339,766 23,558 22,259 4,889,222 Participants withdrawals (9,616,146) (7,721,461)(1,048,617) (977,577) (19,363,801) Transfers between options 319,110 (235,229) (82,276) (1,605) - Balance transferred to Pooled Fund at July 31, 1994 (234,475,198)(54,805,116)(2,851,902) (1,653,592)(293,785,808) ------------ ---------- --------- ---------- ----------- Balance at December 31, 1994 $ 7,225,710 $8,094,103 - - $ 15,319,813 ============ ========= ========= ========== ===========
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 10 11 Schedules 12 Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1994
Shares, Cost (Plus Units, or Accrued Fair Description Face Amount Interest) Value ----------- ----------- --------- ----- Cooper Tire & Rubber Company - common stock 167,954 $ 3,935,421 $ 3,967,913 Cash with interest: Confederation Life Insurance Company - 6.06% annuity contract; matures July 31, 1997 5,000,000 5,000,000 5,000,000 Confederation Life Insurance Company - 6.19% annuity contract; matures January 31, 1998 3,094,103 3,094,103 3,094,103 ---------- ---------- Total Cash with interest 8,094,103 8,094,103 *National City Bank - NCC Government Portfolio Fund 320,427 320,427 320,427 ---------- ---------- Total assets held for investment purposes $12,349,951 $12,382,443 ========== ========== *Party-in-interest
11 13 Cooper Tire & Rubber Company Thrift and Profit Sharing Plan Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) --------------------- --------- -------- ----------- ------ National City Bank - NCC Government Portfolio Fund $32,442,553 $34,135,120 $34,135,120 $ - Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
12 14 EXHIBIT (99) Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan Financial Statements and Schedule Years ended December 31, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 10 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 15 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 16 Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan Statements of Assets Available for Plan Benefits
December 31 1994 1993 ---------- ---------- Assets Investments (Notes 4 & 5): Value of interest in Pooled Fund $6,248,338 $ - Cooper Tire & Rubber Company common stock - 3,984,525 Cash with interest: - 548,483 Short-term investments - 216,041 Mutual funds: The Investment Company of America Fund - 7,080 The Washington Mutual Investors Fund - 24,918 --------- --------- - 31,998 --------- ---------- 6,248,338 4,781,047 Employer contribution receivable 274,898 - --------- --------- Assets available for plan benefits $6,523,236 $4,781,047 ========= ========= See accompanying notes.
2 17 Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan Statements of Changes in Assets Available for Plan Benefits
Year ended December 31 1994 1993 ---------- ---------- Additions: Contributions: Participants $2,102,439 $1,880,298 Employer 274,898 - --------- --------- 2,377,337 1,880,298 Investment income (loss): Net depreciation in fair value of investments (Note 5) (91,296) (1,129,497) Net loss from Pooled Fund (Note 4) (91,066) - Interest 27,029 40,993 Dividends 20,208 28,156 --------- --------- (135,125) (1,060,348) --------- --------- Total additions 2,242,212 819,950 Participants' withdrawals (500,023) (288,739) --------- --------- Increase in assets available for plan benefits during the year 1,742,189 531,211 Assets available for plan benefits at beginning of year 4,781,047 4,249,836 --------- --------- Assets available for plan benefits at end of year $6,523,236 $4,781,047 ========= ========= See accompanying notes.
3 18 Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. Contributions from the Company are accrued in the period in which they become obligations of the Company and may be in the form of cash, treasury stock or authorized but unissued common stock of the Company. Company contributions are invested in common stock of the Company until the contributions become vested after which they are invested as directed by the participant. The Company contribution to a participant's account becomes vested after five years of continuous credited service; thereafter, Company contributions become vested when made. 2. Summary of Plan The Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan (Plan) is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #752, United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 777 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. (continued) 4 19 2. Summary of Plan (continued) b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every 30 days. The Plan provides that the Company will contribute to the Plan each year from current or accumulated earnings an amount equal to the lesser of: (a) 25% of PSP contributions which represent up to four percent of each participant's compensation, less any forfeitures, or (b) an amount equal to fifteen percent of the Company's current year pre-tax earnings, exclusive of any deductions for contributions to the Plan, in excess of ten percent of the stockholders' equity of the Company at the beginning of the year. The Company's Board of Directors, at its discretion, may waive the limitation in (b) and contribute from current or accumulated earnings an amount not to exceed the limitation in (a). Investment options for future contributions and reallocation of balances may be made daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until March 8, 1996. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated October 6, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). (continued) 5 20 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 (continued) 6 21 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- ---------- --------- --------- Net investment gain (loss) $(7,980,450) $ 1,084,760 $ 134,918 $ 44,714 ========== ========== ========= =========
The value of the Plan's interest in the Pooled Fund is $6,248,338 and net investment loss from the Pooled Fund is $91,066 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 2.3% Cash with Interest Fund 1.6% The Investment Company of America Fund 1.0% The Washington Mutual Investors Fund 2.5% The net investment gains of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments The Plan's investments prior to July 31, 1994 were also held by National City Bank as trustee. Contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, are invested in cash with interest investments. (continued) 7 22 5. Investments (continued) The net appreciation (depreciation) of the Plan's investments consisted of the following:
Seven-month period ended Year Ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $(90,848) $(1,130,910) Mutual funds (448) 1,413 -------- --------- $(91,296) $(1,129,497) ======== ==========
Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- --------- Balance at December 31, 1992 $3,774,506 $453,641 $13,759 $ 7,930 $4,249,836 Additions: Participants' contributions 1,633,981 223,016 14,382 8,919 1,880,298 Net appreciation (depreciation) (1,130,910) 922 491 (1,129,497) Interest and dividend income 30,577 36,712 1,363 497 69,149 --------- ------- ------- ------- --------- Total additions 533,648 259,728 16,667 9,907 819,950 Participants' withdrawals (237,418) (50,998) (323) (288,739) Transfers between options 93,869 (81,940) (2,321) (9,608) - --------- ------- ------ ------- --------- Balance at December 31, 1993 4,164,605 580,431 27,782 8,229 4,781,047 Additions: Participants' contributions 1,000,921 147,202 6,889 12,828 1,167,840 Net depreciation (90,848) - (3) (445) (91,296) Interest and dividend income 17,355 28,526 139 1,217 47,237 --------- ------- ----- ------ --------- Total additions 927,428 175,728 7,025 13,600 1,123,781 (continued) 8 23 Participants' withdrawals (292,287) (25,019) - (3,450) (320,756) Transfers between options 8,238 (8,238) 2,350 (2,350) - --------- ------- ------ ------ --------- Balance transferred to Pooled Fund at July 31, 1994 $4,807,984 $722,902 $37,157 $16,029 $5,584,072 ========= ======= ====== ====== =========
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 9 24 Schedule 25 Cooper Tire & Rubber Company Texarkana Pre-Tax Savings Plan Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- --------- -------- ---------- -------- National City Bank - NCC Government Portfolio Fund $1,100,814 $1,169,063 $1,169,063 $ - Cooper Tire & Rubber Company common stock 928,485 - - - New York Life Insurance Company - 8.70 annuity contract 12,874 242,551 242,551 - Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
10 26 EXHIBIT (99) Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant Financial Statements and Schedule Years ended December 31, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 9 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 27 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 28 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant Statements of Assets Available for Plan Benefits
December 31 1994 1993 --------- --------- Assets Investments (Notes 4 & 5): Value of interest in Pooled Fund $454,734 $ - Cooper Tire & Rubber Company common stock - 129,100 Cash with interest: Provident Life and Accident Insurance Company - 5.55% annuity contract - 36,179 Principal Mutual Life Insurance Company - 4.73% annuity contract - 14,366 ------- ------- - 50,545 Mutual funds: The Investment Company of America Fund - 17,416 The Washington Mutual Investors Fund - 11,208 ------- ------- - 28,624 Short-term investments - 4,688 ------- ------- $454,734 $212,957 Participants' contributions receivable - 34,064 ------- ------- Assets available for plan benefits $454,734 $247,021 ======= ======= See accompanying notes.
2 29 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant Statements of Changes in Assets Available for Plan Benefits
Year ended December 31 1994 1993 --------- --------- Additions: Participants' contributions $264,102 $210,118 Investment income (loss): Net depreciation in fair value of investments (Note 5) (10,148) (22,463) Net loss from Pooled Fund (Note 4) (3,797) - Interest 2,069 2,178 Dividends 1,643 1,760 ------- ------- (10,233) (18,525) ------- ------- Total additions 253,869 191,593 Participants' withdrawals (46,156) (2,038) ------- ------- Increase in assets available for plan benefits during the year 207,713 189,555 Assets available for plan benefits at beginning of year 247,021 57,466 ------- ------- Assets available for plan benefits at end of year $454,734 $247,021 ======= ======= See accompanying notes.
3 30 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. 2. Summary of Plan The Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant (Plan) is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #634, United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 160 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. (continued) 4 31 2. Summary of Plan (continued) The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every thirty days. Investment options for future contributions may be changed daily. Reallocation of balances may be made among the options daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until December 6, 1997. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated October 6, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 (continued) 5 32 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
(continued) 6 33 4. Value of Interest in Pooled Fund (continued) The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- ---------- --------- --------- Net investment gain (loss) $(7,980,450) $ 1,084,760 $ 134,918 $ 44,714
The value of the Plan's interest in the Pooled Fund is $454,734 and net investment loss from the Pooled Fund is $3,797 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 0.1% Cash with Interest Fund 0.2% The Investment Company of America Fund 1.3% The Washington Mutual Investors Fund 1.2% The net investment gains of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments The Plan's investments are held by National City Bank as trustee under an agreement which directs the trustee to invest participant contributions based on their investment elections. PSP contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, are invested in cash with interest investments. The net appreciation (depreciation) in fair value of the Plan's investments consisted of the following:
Seven-month period ended Year Ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $ (9,787) $(23,006) Mutual funds (361) 543 ------- ------- $(10,148) $(22,463) ======= ======= (continued) 7 34 5. Investments (continued)
Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- -------- Balance at December 31, 1992 $ 37,332 $12,195 $ 4,681 $ 3,258 $ 57,466 Additions: Participants' contributions 136,906 47,849 15,582 9,781 210,118 Net appreciation (depreciation) (23,006) 315 228 (22,463) Interest and dividend income 743 1,705 965 525 3,938 ------- ------ ------ ------ ------- Total additions 114,643 49,554 16,862 10,534 191,593 Participants' withdrawals (26) (2,012) (2,038) Transfers between options (124) 124 - ------- ------ ------ ------ ------- Balance at December 31, 1993 151,825 59,861 21,543 13,792 247,021 Additions: Participants' contributions 107,761 32,278 12,455 7,800 160,294 Net depreciation (9,787) (203) (158) (10,148) Interest and dividend income 804 2,349 312 247 3,712 ------- ------ ------ ------ ------- Total additions 98,778 34,627 12,564 7,889 153,858 Participants' withdrawals (7,021) (5,331) (782) (13,134) Transfers between options (124) 124 (23) 23 - ------- ------ ------ ------ ------- Balance transferred to Pooled Fund at July 31, 1994 $243,458 $89,281 $34,084 $20,922 $387,745 ======= ====== ====== ====== =======
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 8 35 Schedule 36 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Auburn Plant Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- ----------- -------- ---------- ------- National City Bank - NCC Government Portfolio Fund $165,932 $170,597 $170,597 $ - Cooper Tire & Rubber Company common stock 119,688 - - - Commonwealth Life Insurance Company - 4.87% annuity contract 29,323 990 990 - The Investment Company of America - mutual fund 16,744 - - - Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
9 37 EXHIBIT (99) Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant Financial Statements and Schedule Years ended December 31, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 9 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 38 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 39 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant Statements of Assets Available for Plan Benefits
December 31 1994 1993 ---------- ---------- Assets Investments (Notes 4 & 5): Value of interest in Pooled Fund $2,862,814 $ - Cooper Tire & Rubber Company common stock - 914,125 Mutual funds: The Investment Company of America Fund - 148,449 The Washington Mutual Investors Fund - 87,483 --------- --------- - 235,932 Cash with interest - 90,861 Short-term investments - 25,032 --------- --------- 2,862,814 1,265,950 Participants' contributions receivable - 171,621 --------- --------- Assets available for plan benefits $2,862,814 $1,437,571 ========= ========= See accompanying notes.
2 40 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant Statements of Changes in Assets Available for Plan Benefits
Year Ended December 31 1994 1993 ------------ ------------ Additions: Participants' contributions $1,517,196 $1,154,596 Investment income (loss): Net depreciation in fair value of investments (Note 5) (37,789) (159,058) Net loss from Pooled Fund (Note 4) (34,744) - Dividends 11,479 14,328 Interest 3,412 7,276 --------- --------- (57,642) (137,454) --------- --------- Total additions 1,459,554 1,017,142 Participants' withdrawals (34,311) (11,288) --------- --------- Increase in assets available for plan benefits during the year 1,425,243 1,005,854 Assets available for plan benefits at beginning of year 1,437,571 431,717 --------- --------- Assets available for plan benefits at end of year $2,862,814 $1,437,571 ========= ========= See accompanying notes.
3 41 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. 2. Summary of Plan The Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant (Plan) is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #207, United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 435 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. (continued) 4 42 2. Summary of Plan (continued) The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every thirty days. Investment options for future contributions and reallocation of balances among the options may be made daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until October 31, 1997. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated October 6, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 (continued) 5 43 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
(continued) 6 44 4. Value of Interest in Pooled Fund (continued) The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ----------- ---------- --------- --------- Net investment gain (loss) $ (7,980,450) $ 1,084,760 $ 134,918 $ 44,714
The value of the Plan's interest in the Pooled Fund is $2,862,814 and net investment loss from the Pooled Fund is $34,744 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 0.9% Cash with Interest Fund 0.5% The Investment Company of America Fund 9.9% The Washington Mutual Investors Fund 10.7% The net investment gains (losses) of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments The Plan's investments prior to July 31, 1994 were also held by National City Bank as trustee. PSP contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, were invested in cash with interest investments. The net appreciation (depreciation) of the Plan's investments consisted of the following:
Seven-month period ended Year Ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $(35,054) $(163,098) Mutual funds (2,735) 4,040 ------- -------- $(37,789) $(159,058) ======= ========
(continued) 7 45 5. Investments (continued) Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- -------- Balance at December 31, 1992 $ 335,105 $ 28,395 $ 45,363 $ 22,854 $ 431,717 Additions: Participants' contributions 856,228 90,635 125,482 82,251 1,154,596 Net appreciation (depreciation) (163,098) 2,829 1,211 (159,058) Interest and dividend income 5,752 3,278 8,694 3,880 21,604 --------- ------- ------- ------- --------- Total additions 698,882 93,913 137,005 87,342 1,017,142 Participants' withdrawals (9,034) (1,990) (132) (132) (11,288) Transfers between options 26,482 (12,992) (7,546) (5,944) - --------- ------- ------- ------- --------- Balance at December 31, 1993 1,051,435 107,326 174,690 104,120 1,437,571 Additions: Participants' contributions 553,950 72,228 83,690 66,120 775,988 Net depreciation (35,054) (1,192) (1,543) (37,789) Interest and dividend income 6,818 3,627 2,495 1,951 14,891 ---------- -------- -------- -------- --------- Total additions 525,714 75,855 84,993 66,528 753,090 Participants' withdrawals (9,512) (330) (2,039) (1,646) (13,527) Transfers between options 23,986 (9,359) (7,389) (7,238) - --------- ------- ------- ------- --------- Balance transferred to Pooled Fund at July 31, 1994 $1,591,623 $173,492 $250,255 $161,764 $2,177,134 ========= ======= ======= ======= =========
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 8 46 Schedule 47 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the Findlay Plant Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- --------- --------- ---------- ------- National City Bank - NCC Government Portfolio Fund $864,173 $889,092 $889,092 $ - Cooper Tire & Rubber Company common stock 701,209 The Investment Company of America - mutual fund 105,657 Commonwealth Life Insurance Company - 4.87% annuity contract 84,863 The Washington Mutual Investors Fund - mutual fund 82,184 Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
9 48 EXHIBIT (99) Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant Financial Statements and Schedule Years ended December 31, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 10 A schedule of party-in-interest transactions has not been presented because there were no party- in interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 49 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 50 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant Statements of Assets Available for Plan Benefits
December 31 1994 1993 --------- -------- Assets Investments (Notes 4 & 5) Value of interest in Pooled Fund $275,544 $ - Cooper Tire & Rubber Company common stock - 77,425 Cash with interest: John Hancock Mutual Life Insurance Company - 8.27% annuity contract - 35,427 Provident Life and Accident Insurance Company - 5.55% annuity contract - 29,368 Other - 7,680 ------ ------- 72,475 Mutual funds: The Investment Company of America Fund - 1,919 The Washington Mutual Investors Fund - 2,431 ------- ------- 4,350 Short-term investments - 3,120 ------- ------- $275,544 $157,370 Participants' contributions receivable - 14,360 ------- ------- Assets available for plan benefits $275,544 $171,730 ======= ======= See accompanying notes.
2 51 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant Statements of Changes in Assets Available for Plan Benefits
Year ended December 31 1994 1993 -------- -------- Additions: Participants' contributions $132,783 $82,522 Investment income (loss): Net depreciation in fair value of investments (Note 5) (4,305) (19,687) Interest 3,093 4,386 Dividends 572 628 Net loss from Pooled Fund (Note 4) (382) - -------- ------- (1,022) (14,673) -------- ------- Total additions 131,761 67,849 Participants' withdrawals (27,947) (4,702) -------- -------- Increase in assets available for plan benefits during the year 103,814 63,147 Assets available for plan benefits at beginning of year 171,730 108,583 -------- -------- Assets available for plan benefits at end of year $275,544 $171,730 ======== ========
3 52 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. 2. Summary of Plan The Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant (Plan) is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #769, United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 106 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. (continued) 4 53 2. Summary of Plan (continued) The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every thirty days. Investment options for future contributions and reallocation of balances among the options may be made daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until April 27, 1997. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated October 6, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 (continued) 5 54 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
(continued) 6 55 4. Value of Interest in Pooled Fund (continued) The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- ---------- --------- --------- Net investment gain (loss) $(7,980,450) $ 1,084,760 $ 134,918 $ 44,714 ========== ========== ========= =========
The value of the Plan's interest in the Pooled Fund is $275,544 and net investment loss from the Pooled Fund is $382 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 0.1% Cash with Interest Fund 0.2% The Investment Company of America Fund 0.2% The Washington Mutual Investors Fund 0.5% The net investment gains (losses) of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments The Plan's investments prior to July 31, 1994 were also held by National City Bank as trustee. PSP contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, were invested in cash with interest investments. (continued) 7 56 5. Investments (continued) The net appreciation (depreciation) of the Plan's investments consisted of the following:
Seven-month period ended Year Ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $ (4,254) $(19,773) Mutual funds (51) 86 -------- -------- $ (4,305) $(19,687) ======== ========
Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- -------- Balance at December 31, 1992 $ 60,024 $46,816 $ 769 $ 974 $108,583 Additions: Participants' contributions 45,500 34,050 1,273 1,699 82,522 Net appreciation (depreciation) (19,773) 21 65 (19,687) Interest and dividend income 528 4,260 106 120 5,014 ------- ------ ------ ------ ------- Total additions 26,255 38,310 1,400 1,884 67,849 Participants' withdrawals (2,571) (2,131) (4,702) Transfers between options 1,144 (1,935) 791 - ------- ------ ------ ------ ------- Balance at December 31, 1993 84,852 81,060 2,169 3,649 171,730 Additions: Participants' contributions 43,617 27,252 2,789 2,676 76,334 Net depreciation (4,254) - (8) (43) (4,305) Interest and dividend income (155) 3,642 34 144 3,665 -------- ------- ------- ------- -------- Total additions 39,208 30,894 2,815 2,777 75,694 (continued) 8 57 Participants' withdrawals (7,427) (7,671) - - (15,098) Transfers between options 6,748 (6,878) (331) 461 - ------- ------ ----- ----- ------- Balance transferred to Pooled Fund at July 31, 1994 $123,381 $97,405 $4,653 $6,887 $232,326 ======= ====== ===== ===== =======
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 9 58 Schedule 59 Cooper Tire & Rubber Company Pre-Tax Savings Plan at the El Dorado Plant Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- --------- -------- ---------- -------- National City Bank - NCC Government Portfolio Fund $71,676 $74,822 $74,822 $ - Cooper Tire & Rubber Company common stock 51,605 Commonwealth Life Insurance Company - 4.87% annuity contract 16,445 4,698 4,699 (1) Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
10 60 EXHIBIT (99) Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) Financial Statements and Schedule Year ended December 31, 1994 and Period ended December 31, 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 10 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 61 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the year ended December 31, 1994 and the three-month period (since inception) ended December 31, 1993. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the year ended December 31, 1994 and the three-month period ended December 31, 1993, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 62 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) Statements of Assets Available for Plan Benefits
December 31 1994 1993 ------- ------- Assets Investments (Notes 4 & 5) Value of interest in Pooled Fund $88,160 $ - Cooper Tire & Rubber Company common stock - 2,475 Short-term investments - NCC Government Portfolio Fund - 1,080 ------ ------ 88,160 3,555 Participants' contributions receivable - 7,781 ------ ------ Assets available for plan benefits $88,160 $11,336 ====== ====== See accompanying notes.
2 63 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) Statements of Changes in Assets Available for Plan Benefits
Three-month Year ended period ended December December 31 1994 1993 ---------- ------------ Additions: Participants' contributions $81,413 $11,236 Investment income (loss): Net appreciation (depreciation) in fair value of investments (Note 5) (2,535) 92 Net loss from Pooled Fund (Note 4) (731) - Interest 120 8 Dividends 156 - ------ ------ (2,990) 100 ------- ------ Total additions 78,423 11,336 Participants' withdrawals (1,599) - ------ ------ Increase in assets available for plan benefits during the period 76,824 11,336 Assets available for plan benefits at beginning of period 11,336 - ------ ------ Assets available for plan benefits at end of period $88,160 $11,336 ====== ====== See accompanying notes.
3 64 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) Notes to Financial Statements December 31, 1994 and 1993 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. 2. Summary of Plan The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) (Plan) became operational on October 1, 1993. The Plan is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #1152, United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 70 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. (continued) 4 65 2. Summary of Plan (continued) 3) Cash with interest - Contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every thirty days. Investment options for future contributions may be changed daily. Reallocation of balances may be made among the options daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until April 30, 1998. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated April 12, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). (continued) 5 66 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ------------ ----------- ---------- ---------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 (continued) 6 67 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- ---------- --------- --------- Net investment gain (loss) $(7,980,450) $ 1,084,760 $ 134,918 $ 44,714 ========== ========== ========= =========
The value of the Plan's interest in the Pooled Fund is $88,160 and net investment loss from the Pooled Fund is $731 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 0.1% Cash with Interest Fund 0.1% The Investment Company of America Fund 0.3% The Washington Mutual Investors Fund 0.7% The net investment gains (losses) of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. (continued) 7 68 5. Investments The Plan's investments prior to July 31, 1994 were also held by National City Bank as trustee. PSP contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, were invested in cash with interest investments. The net appreciation (depreciation) of the Plan's investments consisted of the following:
Seven-month Three-month period ended period ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $(1,857) $92 Mutual funds (678) - ------- -- $(2,535) $92 ======= ==
Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- ------- Additions: Participants' contributions $ 7,258 $ 637 $1,297 $2,044 $11,236 Net appreciation 92 92 Interest and dividend income 5 1 1 1 8 ------ ----- ----- ----- ------ Total additions 7,355 638 1,298 2,045 11,336 Participants' withdrawals Transfers between options ------ ----- ----- ----- ------ Balance at December 31, 1993 7,355 638 1,298 2,045 11,336 Additions: Participants' contributions 29,690 4,962 5,080 8,516 48,248 Net depreciation (1,857) (252) (426) (2,535) Interest and dividend income 111 58 37 70 276 ------ ----- ----- ----- ------ Total additions 27,944 5,020 4,865 8,160 45,989 (continued) 8 69 Participants' withdrawals (541) (541) Transfers between options 704 (353) (351) ------ ----- ----- ------ ------ Balance transferred to Pooled Fund at July 31, 1994 $35,462 $5,658 $5,810 $9,854 $56,784 ======= ====== ====== ====== =======
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 9 70 Schedule 71 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose) Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- --------- -------- ---------- -------- National City Bank - NCC Government Portfolio Fund $48,615 $49,687 $49,687 $ - Cooper Tire & Rubber Company common stock 35,645 674 709 (35) The Washington Mutual Investors Fund - mutual fund 10,280 The Investment Company of America - mutual fund 6,062 Commonwealth Life Insurance Company - 4.87% annuity contract 5,210 Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
10 72 EXHIBIT (99) Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) Financial Statements and Schedule Year ended December 31, 1994 and Period ended December 31, 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Assets Available for Plan Benefits 2 Statements of Changes in Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Schedule Item 27d - Schedule of Reportable Transactions 9 A schedule of party-in-interest transactions has not been presented because there were no party-in- interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 73 Report of Independent Auditors Pre-Tax Savings Plan Committee Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) We have audited the accompanying statements of assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) as of December 31, 1994 and 1993, and the related statements of changes in assets available for plan benefits for the year ended December 31, 1994 and the three-month period (since inception) ended December 31, 1993. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for plan benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) at December 31, 1994 and 1993, and the changes in its assets available for plan benefits for the year ended December 31, 1994 and the three-month period ended December 31, 1993, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of reportable transactions for the year ended December 31, 1994 is presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and is not a required part of the basic financial statements. The schedule has been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, is fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. /s/ Ernst & Young LLP --------------------- ERNST & YOUNG LLP May 31, 1995 1 74 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) Statements of Assets Available for Plan Benefits
December 31 1994 1993 --------- --------- Assets Investments (Notes 4 & 5) Value of interest in Pooled Fund $64,446 $ - Cooper Tire & Rubber Company common stock - 3,025 Short-term investments - NCC Government Portfolio Fund - 1,272 ------- ------- 64,446 4,297 Participants' contributions receivable - 6,365 ------- ------- Assets available for plan benefits $64,446 $10,662 ======= ======= See accompanying notes.
2 75 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) Statements of Changes in Assets Available for Plan Benefits
Three-month Year ended period ended December December 31 1994 1993 ---------- ------------ Additions: Participants' contributions $55,843 $10,539 Investment income (loss): Net appreciation (depreciation) in fair value of investments (Note 5) (1,110) 112 Net loss from Pooled Fund (Note 4) 658 - Interest 152 11 Dividends 88 - ------ ------ (212) 123 ------ ------ Total additions 55,631 10,662 Participants' withdrawals (1,847) - ------ ------ Increase in assets available for plan benefits during the period 53,784 10,662 Assets available for plan benefits at beginning of period 10,662 - ------ ------ Assets available for plan benefits at end of period $64,446 $10,662 ====== ====== See accompanying notes.
3 76 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) Notes to Financial Statements December 31, 1994 1. Significant Accounting Policies Investments Investments in common stock of Cooper Tire & Rubber Company (Company) and in mutual funds are stated at quoted market and net asset values, respectively, as determined on the last business day of the Plan year. Short-term investments are stated at cost and cash with interest investments are valued at cost plus accrued interest, both of which approximate fair value. On July 31, 1994 the investments of the Plan were combined with similar assets of the other defined contribution plans sponsored by the Company. The combined investments (Pooled Fund) are held by National City Bank as trustee and are valued at their fair value as determined by the trustee. Contributions Contributions are recorded when the Company makes payroll deductions for Plan participants, and are invested in any of four investment options at the participant's election. 2. Summary of Plan The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) (Plan) became operational on October 1, 1993. The Plan is a defined contribution plan administered by a Plan Committee appointed by the Company. Participation in the Plan is voluntary and any employee of the Company eligible for membership in Local Union #1042 United Rubber, Cork, Linoleum and Plastic Workers of America (Union) is eligible to participate in the Plan if he or she has completed thirty days of continuous credited service. At December 31, 1994, 43 participants had designated investment of contributions in one or more investment options of the Plan, which are as follows: 1) Cooper Tire & Rubber Company common stock. 2) Mutual funds managed by the American Funds Group, a subsidiary of Capital Group Incorporated: a) The Investment Company of America Fund - managed to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. b) The Washington Mutual Investors Fund - managed to provide current income and opportunity for capital growth through the selection of common stocks. 3) Cash with interest - contributions are currently placed in interest bearing investments and direct obligations of insurance companies guaranteeing payment of the principal and a specified rate of return. (continued) 4 77 2. Summary of Plan (continued) The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be made in one percent multiples of participant's compensation up to fifteen percent, subject to Internal Revenue Service (IRS) limits on annual contributions to the Plan. The amount of contribution may be changed every thirty days. Investment options for future contributions may be changed daily. Reallocation of balances may be made among the options daily. Directions given by participants to the Plan trustee concerning the voting of common stock are confidential. No amounts may be withdrawn by a participant from PSP contributions prior to termination of employment unless the participant has either attained age 59 1/2, becomes totally and permanently disabled, or is able to demonstrate financial hardship. Hardship withdrawals by participants not yet attaining 59 1/2 years of age are limited to PSP contributions and are subject to IRS regulations. Participants are fully vested in their contributions and earnings thereon. The Plan shall continue until October 31, 1997. Thereafter it shall renew itself for yearly periods unless written notice is given by the Company or the Union that it is desired to terminate or amend the Plan. The Company has reserved the right to amend the Plan at any time if such amendment is necessary to enable the Plan to meet the requirements of the Internal Revenue Code or the requirements of any governmental authority. If the Plan terminates, and a successor plan is not adopted, all assets will be distributed to participants in a lump sum. 3. Income Tax Status The IRS issued a determination letter dated April 12, 1994 advising that the Plan meets the requirements of Section 401(a) of the Internal Revenue Code and, therefore, the Trust created pursuant to the Plan qualifies as a tax-exempt Trust under Section 501(a). 4. Value of Interest in Pooled Fund The assets of the Pooled Fund as of December 31, 1994 are as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- NCC Government Obligation Fund $ 3,832,867 $ 794,156 $ 210,485 $ 202,193 Cooper Tire & Rubber Company Common Stock 227,793,333 (continued) 5 78 Mutual funds: The Investment Company of America Fund 3,196,070 The Washington Mutual Investors Fund 1,922,281 ----------- ---------- --------- --------- - - 3,196,070 1,922,281 Cash with Interest Fund: Provident Life and Accident Insurance Company - 5.55% annuity contract; 50% of balance matures January 31, 1995 and remainder matures January 30, 1998 11,151,499 John Hancock Mutual Life Insurance Company - 8.27% annuity contract; matures January 31, 1997 9,568,259 Prudential Life Insurance Company - 5.48% annuity contract; matures July 31, 1996 8,527,141 Principal Mutual Life Insurance Company - 4.73% annuity contract; 50% of balance matures January 31, 1995 and remainder matures July 31, 1997 7,650,645 Sun Life Insurance Company of Canada (U.S.) - 8.07% annuity contract; matures January 31, 1996 6,515,295 Connecticut General Life Insurance Company - 7.03% variable annuity contract; matures January 31, 1996 5,114,841 Commonwealth Life Insurance Company - 4.87% annuity contract; 50% of balance matures January 31, 1996 and remainder matures July 31, 1998 4,416,561 ----------- ---------- --------- --------- - 52,944,241 - - ----------- ---------- --------- --------- Total assets $231,626,200 $53,738,397 $3,406,555 $2,124,474 =========== ========== ========= =========
(continued) 6 79 4. Value of Interest in Pooled Fund (continued) The net investment gain (loss) of the Pooled Fund for the five-month period ended December 31, 1994 is as follows:
Cooper Tire & Rubber Company Pooled Fund ------------------------------------------------- Cooper Tire The The & Rubber Cash Investment Washington Company with Company of Mutual Common Interest America Investors Stock Fund Fund Fund Fund ------------ ----------- ---------- ---------- Interest $ 25,088 $ 1,084,760 $ 1,100 $ 686 Dividends 1,057,714 - 148,760 15,750 Net realized and unrealized gain (loss) (9,063,252) - (14,942) 28,278 ---------- ---------- --------- --------- Net investment gain (loss) $(7,980,450) $ 1,084,760 $ 134,918 $ 44,714 ========== ========== ========= =========
The value of the Plan's interest in the Pooled Fund is $64,446 and net investment gain from the Pooled Fund is $658 as of and for the five-month period ended December 31, 1994. The Plan's interest in the Pooled Fund's assets as of December 31, 1994 is as follows: Cooper Tire & Rubber Company Common Stock Fund 0.1% Cash with Interest Fund 0.1% The Investment Company of America Fund 0.2% The Washington Mutual Investors Fund 0.2% The net investment gains (losses) of the Pooled Fund are allocated to each plan based on the percentage of that Plan's units in each Pooled Fund category. 5. Investments The Plan's investments prior to July 31, 1994 were also held by National City Bank as trustee. PSP contributions and income not yet invested in the options selected by the participant due to the "transaction period" as defined by the Plan, were invested in cash with interest investments. The net appreciation (depreciation) of the Plan's investments consisted of the following:
Seven-month Three-month period ended period ended July 31 December 31 1994 1993 ------------ ------------ Cooper Tire & Rubber Company common stock $(1,440) $112 Mutual funds 330 - ------- --- $(1,110) $112 ======= ===
(continued) 7 80 5. Investments (continued) Changes in amounts allocated to each of the Plan's investment options are summarized below:
Mutual Funds --------------------- The The Common Investment Washington Stock Cash Company of Mutual of the with America Investors Company Interest Fund Fund Total -------- -------- ---------- ---------- ------- Additions: Participants' contributions $ 7,464 $1,851 $ 395 $ 829 $10,539 Net appreciation 112 112 Interest and dividend income 7 2 1 1 11 ------ ----- ----- ----- ------ Total additions 119 2 1 1 123 Participants' withdrawals Transfers between options ------ ----- ----- ----- ------ Balance at December 31, 1993 7,583 1,853 396 830 10,662 Additions: Participants' contributions 21,797 4,506 3,894 2,780 32,977 Net depreciation (1,440) 184 146 (1,110) Interest and dividend income 87 101 22 30 240 ------ ----- ----- ----- ------ Total additions 20,444 4,607 4,100 2,956 32,107 Participants' withdrawals (1,183) (196) (554) (1,933) Transfers between options (106) 108 (2) ------ ----- ----- ----- ------ Balance transferred to Pooled Fund at July 31, 1994 $26,738 $6,568 $4,298 $3,232 $40,836 ====== ===== ===== ===== ======
6. Prospective Accounting Standard The Plan will be required to adopt American Institute of Certified Public Accountants Statement of Position 94-4 (SOP) as of January 1, 1995 with a delayed effective date of January 1, 1996 for investment contracts entered into before December 31, 1993. When adopted, the SOP will require the Plan to report fully benefit responsive investment contracts at contract value and all other investment contracts at fair value. The effect of adopting this requirement has not yet been determined. 8 81 Schedule 82 Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing) Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Sales -------------------------------- Cost (Plus Cost of Accrued Gain/ Description of Assets Purchases Proceeds Interest) (Loss) ------------------------- --------- -------- ---------- -------- National City Bank - NCC Government Portfolio Fund $42,356 $43,619 $43,619 $ - Cooper Tire & Rubber Company common stock 25,183 204 204 - Commonwealth Life Insurance Company - 4.87% annuity contract 5,148 The Investment Company of America - mutual fund 4,115 The Washington Mutual Investors Fund - mutual fund 3,569 484 494 (10) Principal Mutual Life Insurance Company - 4.73% annuity contract 1,414 Note: The purchase and selling price for each reportable transaction represents its fair value at the time of acquisition or disposition.
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