Business Segments

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Business Segments

Note 20 - Business Segments

The Company has two reportable segments – Americas 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 Americas Tire Operations segment manufactures and markets passenger car and light truck tires, primarily for sale in the U.S. replacement market. The segment has a joint venture manufacturing operation in Mexico, COOCSA, which supplies passenger car tires to the U.S., Mexican, Central American and South American markets. The segment also distributes tires for racing, medium truck and motorcycles. The racing and motorcycle tires are manufactured in the Company’s International Tire Operations segment. The medium truck tires are sourced through an off-take agreement subsequent to the Company’s sale of its ownership interest in CCT. 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 currently 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 affiliated operations in the U.K., the PRC and Serbia. The U.K. entity manufactures and markets passenger car, light truck, motorcycle and racing tires and tire retread material for domestic and global markets. In the PRC, Cooper Kunshan Tire manufactures light vehicle tires and, under an agreement with the government of the PRC, these tires were exported to markets outside of the PRC through 2012. Beginning in 2013, tires produced at the facility have also been sold in the domestic market. The segment also had a joint venture in the PRC, CCT, which manufactured and marketed radial and bias medium truck tires as well as passenger and light truck tires for domestic and global markets. The segment sold its ownership interest in this joint venture in November 2014 and the Company will now procure these tires under an offtake agreement through 2018. The Serbian entity manufactures light vehicle tires primarily for the European markets. The majority of the tires manufactured by the segment are sold in the replacement market, with a relatively small percentage currently sold to OEMs.

The following customer of the Americas Tire Operations segment contributed ten percent or more of the Company’s total consolidated net sales in 2012, 2013 and 2014. Net sales and percentage of consolidated Company sales for this customer in 2012, 2013 and 2014 were as follows:

	2012					2013					2014
Customer	Net Sales		Consolidated Net Sales			Net Sales		Consolidated Net Sales			Net Sales		Consolidated Net Sales
TBC/Treadways	$	549,685		13	%	$	364,493		11	%	$	361,546		11	%

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:

	2012			2013			2014
Revenues
Americas Tire
External Customers	$	3,011,314		$	2,429,808		$	2,524,554
Intercompany		84,244			56,778			60,930
		3,095,558			2,486,586			2,585,484
International Tire
External Customers		1,189,522			1,009,425			900,255
Intercompany		386,476			232,104			240,571
		1,575,998			1,241,529			1,140,826
Eliminations and other		(470,720	)		(288,882	)		(301,501	)
Consolidated		4,200,836			3,439,233			3,424,809
Segment profit
Americas Tire		295,900			204,239			274,837
International Tire		143,589			83,990			74,566
Unallocated corporate charges and eliminations		(42,527	)		(47,515	)		(48,945	)
Operating profit		396,962			240,714			300,458
Interest expense		(29,546	)		(27,906	)		(28,138	)
Interest income		2,560			810			1,500
Gain on sale in interest in subsidiary		—			—			77,471
Other - income (expense)		(1,526	)		(647	)		(2,772	)
Income from continuing operations before income taxes		368,450			212,971			348,519
Depreciation and amortization expense
Americas Tire		76,035			75,132			82,457
International Tire		51,846			54,825			54,400
Corporate		1,035			4,794			2,309
Consolidated		128,916			134,751			139,166
Segment assets
Americas Tire		1,181,500			1,172,555			1,285,296
International Tire		893,390			958,914			423,059
Corporate and other		726,270			606,678			781,576
Consolidated		2,801,160			2,738,147			2,489,931
Expenditures for long-lived assets
Americas Tire		68,655			87,655			95,539
International Tire		79,286			61,973			44,741
Corporate		57,929			30,820			4,761
Consolidated		205,870			180,448			145,041

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

	2012		2013		2014
Revenues
United States	$	2,914,721	$	2,332,526	$	2,423,471
PRC		879,424		745,444		635,632
Rest of world		406,691		361,263		365,706
Consolidated		4,200,836		3,439,233		3,424,809
Long-lived assets
United States		545,169		453,693		474,357
PRC		357,782		353,551		113,335
Rest of world		149,717		167,025		152,511
Consolidated		1,052,668		974,269		740,203