Business Segments

12 Months Ended

Dec. 31, 2012

Business Segments

Note 20 - Business Segments

The Company has two reportable segments – North American Tire Operations and International Tire Operations. The Company’s reportable segments are each managed separately. The reportable segments are based on components of the Company that engage in business activities that earn revenue and incur expenses and (a) whose operating results are regularly reviewed by the Company’s chief operating decision maker to make decisions about resource allocation and performance and (b) for which discrete financial information is available.

The North American Tire Operations segment manufactures and markets passenger car and light truck tires, primarily for sale in the U.S. replacement market. The segment also distributes tires for racing, medium truck and motorcycles that are manufactured at the Company’s affiliated operations. Major distribution channels and customers include independent tire dealers, wholesale distributors, regional and national retail tire chains, and large retail chains that sell tires as well as other automotive products. The segment does not sell its products directly to end users, except through three Company-owned retail stores. The segment sells a limited number of tires to original equipment manufacturers

The International Tire Operations segment has manufacturing operations in the U.K., the Republic of Serbia and the PRC. The U.K. entity manufactures and markets passenger car, light truck, motorcycle and racing tires and tire retread material for the global market. The Cooper Chengshan Tire joint venture manufactures and markets radial and bias medium truck tires as well as passenger and light truck tires for the global market. Cooper Kunshan Tire currently manufactures light vehicle tires and under an agreement with the government of the PRC, these tires have been exported to markets outside of the PRC through 2012. Beginning in 2013, tires produced at this facility can also be sold in the domestic market. Only a small percentage of the tires manufactured by the segment are sold to OEMs.

The following customer of the North American Tire Operations segment contributed ten percent or more of the Company’s total consolidated net sales in 2010, 2011 and 2012. Net sales and percentage of consolidated Company sales for this customer in 2010, 2011 and 2012 were as follows:

	2010					2011					2012
Customer	Net Sales		Consolidated Net Sales			Net Sales		Consolidated Net Sales			Net Sales		Consolidated Net Sales
TBC/Treadways	$	424,051		13	%	$	475,586		12	%	$	549,685		13	%

The accounting policies of the reportable segments are consistent with those described in the Significant Accounting Policies note to the consolidated financial statements. Corporate administrative expenses are allocated to segments based principally on assets, employees and sales. The following table details segment financial information:

	2010			2011			2012
Revenues
North American Tire
External Customers	$	2,338,631		$	2,744,124		$	3,011,314
Intercompany		66,901			93,464			84,244
		2,405,532			2,837,588			3,095,558
International Tire
External Customers		1,004,077			1,163,696			1,189,522
Intercompany		268,147			393,384			386,476
		1,272,224			1,557,080			1,575,998
Eliminations and other		(335,048	)		(486,848	)		(470,720	)
Consolidated		3,342,708			3,907,820			4,200,836
Segment profit
North American Tire		130,694			77,432			295,900
International Tire		82,081			102,720			143,589
Unallocated corporate charges and eliminations		(24,401	)		(16,851	)		(42,527	)
Operating profit		188,374			163,301			396,962
Interest expense		(36,647	)		(36,191	)		(29,546	)
Interest income		5,265			3,190			2,560
Other - income (expense)		2,834			3,846			(1,526	)
Income from continuing operations before income taxes		159,826			134,146			368,450
Depreciation and amortization expense
North American Tire		76,065			72,787			76,035
International Tire		46,728			49,778			51,846
Corporate		928			334			1,035
Consolidated		123,721			122,899			128,916
Segment assets
North American Tire		982,001			1,096,083			1,181,500
International Tire		823,011			884,337			893,390
Corporate and other		500,525			529,498			726,270
Consolidated		2,305,537			2,509,918			2,801,160
Expenditures for long-lived assets
North American Tire		66,100			69,168			68,655
International Tire		37,395			32,849			79,286
Corporate		16,243			53,389			57,929
Consolidated		119,738			155,406			205,870

Geographic information for revenues, based on country of origin, and long-lived assets follows:

	2010		2011		2012
Revenues
United States	$	2,286,744	$	2,675,532	$	2,914,721
PRC		727,758		833,146		879,424
Rest of world		328,206		399,142		406,691
Consolidated		3,342,708		3,907,820		4,200,836
Long-lived assets
United States		460,362		499,753		545,169
PRC		347,999		354,351		357,782
Rest of world		44,081		114,999		149,717
Consolidated		852,442		969,103		1,052,668