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Business Wire 19-Feb-2019 7:00 AM
Cooper Tire & Rubber Company (NYSE:CTB) today reported full year 2018 net income of $77 million, or diluted earnings per share of $1.51, compared with $95 million, or $1.81 per share, last year. The 2018 results included a $34 million goodwill impairment charge. Excluding the charge, diluted earnings per share would have been $2.18.
Full Year 2018 Highlights
Fourth Quarter Highlights
"Our fourth quarter operating margin, excluding the goodwill impairment charge, exceeded what we achieved in the third quarter, excluding the benefit from an adjustment of our product liability reserve model in that quarter. As stated at the beginning of 2018, we expected operating margin improvement throughout the year, and we delivered on this expectation as our strategic initiatives took hold," said President & Chief Executive Officer Brad Hughes.
"As projected, in the fourth quarter we drove unit volume growth in the U.S., which was offset by volume declines in our other regions, reflecting economic and political factors. Raw material costs improved sequentially, but were up on a year-over-year basis by nearly 8 percent.
"Additionally, we successfully implemented our plan to right-size inventory levels, reducing the number of inventory units in the Americas by over 10 percent in 2018. While this plan impacted our 2018 results through higher manufacturing costs, we believe this positions Cooper with the right level of inventory as we enter 2019.
"Moving forward, we expect to make continued progress on our strategic priorities in 2019, and believe underlying macro-conditions will support growth in tire demand, particularly in the U.S. As a result, we expect modest global unit volume growth for Cooper in 2019 and full year operating profit margin to improve compared with 2018. We are confident that our strategic plan remains the right path to achieve our goals and help drive shareholder value."
Consolidated Results |
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Cooper Tire |
Q4 2018(NYSE:M) |
Q4 2017(NYSE:M) |
% Change |
2018(NYSE:M) |
2017(NYSE:M) |
% Change | ||||||||||||||||||||||
Net Sales | $ | 770 | 757 | 1.8 | % | $ | 2,808 | $ | 2,855 | (1.6 | %) | |||||||||||||||||
Operating Profit | $ | 25 | 56 | (55.9 | %) | $ | 165 | 309 | (46.6 | %) | ||||||||||||||||||
Operating Margin | 3.2 | % | 7.4 | % | (4.2 | ) ppts. | 5.9 | % | 10.8 | % | (4.9 | ) ppts. |
Fourth quarter net sales were $770 million, an increase of 1.8 percent compared with $757 million in the fourth quarter of 2017. Fourth quarter net sales included $33 million of favorable price and mix, which was partially offset by $14 million of lower unit volume and $6 million of unfavorable foreign currency impact.
Fourth quarter 2018 operating profit was $25 million compared with $56 million for the same period in 2017. Goodwill impairment testing in the fourth quarter of 2018 resulted in a non-cash impairment charge of $34 million. Operating profit also included $12 million favorable price and mix, which was partially offset by $11 million of unfavorable raw material costs. Operating profit also included lower product liability costs of $6 million, $2 million of lower unit volume, higher SG&A expense of $2 million, higher manufacturing costs of $1 million and lower other costs of $1 million.
Regarding the goodwill impairment charge, the company announced in December a joint venture agreement with Sailun Vietnam to build a new truck and bus radial (TBR) tire production plant in Vietnam. The capacity created by this planned facility will decrease expected production requirements for Cooper's Qingdao Ge Rui Da Rubber Co., Ltd. (GRT) joint venture in China, resulting in the goodwill impairment charge.
Cooper's fourth quarter raw material index increased 7.8 percent compared to the fourth quarter of 2017. The raw material index decreased sequentially from 168.8 in the third quarter of 2018 to 165.1 in the fourth quarter of 2018.
The effective tax rate for the fourth quarter was 96.3 percent, compared to 206.0 percent in the same period the prior year. Excluding the goodwill impairment charge, the effective tax rate would have been 25.2 percent in the fourth quarter of 2018. The effective tax rate for the fourth quarter of 2017, excluding discrete tax items, was 30.7 percent. The tax rate for the fourth quarter of 2018 includes the benefit of a lower blended U.S. statutory tax rate as a result of U.S. income tax reform, offset by approximately $2 million of net discrete expense items related to the accrual of additional uncertain tax positions.
Throughout 2018, the company focused on cash flow improvement by aligning production to demand, managing inventory levels, and taking other working capital actions. These actions resulted in improved cash flows, which enabled Cooper to improve the funding status of its U.S. pension plans.
At year end, Cooper had $356 million in cash and cash equivalents, compared with $372 million at the end of 2017. Capital expenditures in the fourth quarter were $49 million compared with $54 million in the same period the prior year.
The company generated a return on invested capital, excluding the impact of the goodwill impairment charge in the fourth quarter, of 10.0 percent for the trailing four quarters.
Americas Tire Operations |
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Americas Tire Operations |
Q4 2018(NYSE:M) |
Q4 2017(NYSE:M) |
% Change |
2018(NYSE:M) |
2017(NYSE:M) |
% Change | ||||||||||||||||||||||
Net Sales | $ | 664 | $ | 645 | 3.0% | $ | 2,363 | $ | 2,417 | (2.2 | %) | |||||||||||||||||
Operating Profit | $ | 70 | $ | 68 | 3.1% | $ | 230 | $ | 355 | (35.4 | %) | |||||||||||||||||
Operating Margin | 10.6 | % | 10.6 | % | — ppts. | 9.7 | % | 14.7 | % | (5.0 | ) ppts. |
Fourth quarter net sales in the Americas segment increased 3.0 percent as a result of $21 million of favorable price and mix, which was partially offset by $2 million of unfavorable foreign currency impact. For the quarter, segment unit volume was flat compared to the fourth quarter of 2017, with a unit volume increase in North America, which was offset by a decline in Latin America.
Cooper's fourth quarter total light vehicle tire shipments in the United States increased 0.4 percent. The U.S. Tire Manufacturers Association (USTMA) reported that its member shipments of light vehicle tires in the U.S. were up 1.2 percent. Total industry shipments (including an estimate for non-USTMA members) increased 3.6 percent for the period.
Fourth quarter operating profit was $70 million, or 10.6 percent of net sales, compared with $68 million, or 10.6 percent of net sales in 2017. Operating profit was impacted by $9 million of favorable price and mix, which was offset by $9 million of unfavorable raw material costs. The quarter also included $6 million of favorable manufacturing costs and $6 million of lower product liability costs. These were partially offset by $11 million of unfavorable SG&A costs, including increased incentive compensation costs. Other costs decreased by $1 million.
International Tire Operations |
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International Tire Operations |
Q4 2018(NYSE:M) |
Q4 2017(NYSE:M) |
% Change |
2018(NYSE:M) |
2017(NYSE:M) |
% Change | |||||||||||||||||||||||
Net Sales | $ | 149 | $ | 162 |
(7.8 |
%) |
$ | 641 | $ | 619 |
3.6 |
% |
|||||||||||||||||
Operating (Loss)/Profit | $ | (33 | ) | $ | 7 | (547.1 | %) |
$ |
(14 |
) |
$ | 15 | (192.6 | %) | |||||||||||||||
Operating Margin | (22.2 | %) | 4.6 | % | (26.8 | ) ppts. | (2.2 | %) | 2.5 | % | (4.7 | ) ppts. |
Fourth quarter net sales in the International segment decreased 7.8 percent as a result of $20 million of lower unit volume and $4 million of unfavorable foreign currency impact, which was partially offset by $11 million of favorable price and mix. Segment unit volume was down 12.3 percent, with decreased unit volume in both Asia and Europe.
Fourth quarter operating loss was $33 million compared with operating profit of $7 million in the fourth quarter of 2017. The decrease was driven by the goodwill impairment charge of $34 million. Additionally, the segment experienced $2 million of favorable price and mix, which was more than offset by $3 million of increased raw material costs. The quarter also included $3 million of lower SG&A, $6 million of unfavorable manufacturing costs and $2 million of lower unit volume.
Outlook
Full Year 2019:
Management expects first quarter 2019 operating profit margin to be lower than the first quarter of 2018 as a result of typical seasonality and some unique items which will impact the first part of the year, including:
The 2019 expectations include tariffs already in place, but do not include rate changes or additional tariffs that continue to be considered, but have not yet been imposed.
"We are optimistic about 2019 as our business model is strong and our strategic initiatives continue to gain momentum," said Hughes. "We anticipate operating profit margin to improve throughout the year, with the full year expected to be better than 2018."
Fourth Quarter and Full Year 2018 Conference Call Today at 10 a.m. EasternManagement will discuss the financial and operating results for the fourth quarter and full year 2018, as well as the company's business outlook, on a conference call for analysts and investors today at 10 a.m. EST. The call may be accessed on the investor relations page of the company's website at http://coopertire.com/Investors.aspx or at https://services.choruscall.com/links/ctb190219.html. Following the conference call, the webcast will be archived and available for 90 days at these websites.
A summary slide presentation of information related to the quarter and full year is posted on the company's website at http://investors.coopertire.com/Quarterly-Results.
Forward-Looking StatementsThis release contains what the company believes are "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding projections, expectations or matters that the company anticipates may happen with respect to the future performance of the industries in which the company operates, the economies of the U.S. and other countries, or the performance of the company itself, which involve uncertainty and risk. Such "forward-looking statements" are generally, though not always, preceded by words such as "anticipates," "expects," "will," "should," "believes," "projects," "intends," "plans," "estimates," and similar terms that connote a view to the future and are not merely recitations of historical fact. Such statements are made solely on the basis of the company's current views and perceptions of future events, and there can be no assurance that such statements will prove to be true.
It is possible that actual results may differ materially from projections or expectations due to a variety of factors, including but not limited to:
It is not possible to foresee or identify all such factors. Any forward-looking statements in this release are based on certain assumptions and analyses made by the company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected.
The company makes no commitment to update any forward-looking statement included herein or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Further information covering issues that could materially affect financial performance is contained in the company's filings with the U.S. Securities and Exchange Commission ("SEC").
Non-GAAP Financial MeasuresThis press release includes non-GAAP financial measures as defined under SEC rules. Non-GAAP financial measures should be considered in addition to, not as a substitute for, operating profit, net income, earnings per share or other financial measures prepared in accordance with generally accepted accounting principles ("GAAP"). The company's methods of determining these non-GAAP financial measures may differ from the methods used by other companies for these or similar non-GAAP financial measures. Accordingly, these non-GAAP financial measures may not be comparable to measures used by other companies. As required by SEC rules, detailed reconciliations between the company's GAAP and non-GAAP financial results are provided on the attached schedule. The company uses adjusted operating profit, net income, the provision for income taxes and earnings per share to evaluate the performance of the company's operations exclusive of certain items affecting comparability of results from period to period. The company believes that information about operating profit, net income, the provision for income taxes and earnings per share exclusive of these items is useful to investors, particularly where the impact of the excluded items is significant in relation to reported earnings, because the measure allows for the comparability between periods of the operating performance of the company's business and allows investors to evaluate the impact of the excluded items separately from the impact of the operations of the business. The company believes return on invested capital ("ROIC") provides additional insight for analysts and investors in evaluating the company's financial and operating performance. The company defines ROIC as the trailing four quarters' operating profit, after tax, divided by the total invested capital, which is the average of ending debt and equity for the last five quarters. The company believes ROIC is a useful measure of how effectively the company uses capital to generate profits.
About Cooper Tire & Rubber CompanyCooper Tire & Rubber Company (NYSE:CTB) is the parent company of a global family of companies that specializes in the design, manufacture, marketing and sale of passenger car, light truck, medium truck, motorcycle and racing tires. Cooper's headquarters is in Findlay, Ohio, with manufacturing, sales, distribution, technical and design operations within its family of companies located in more than one dozen countries around the world. For more information on Cooper, visit www.coopertire.com, www.facebook.com/coopertire or www.twitter.com/coopertire.
Cooper Tire & Rubber Company | |||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||
(Dollar amounts in thousands except per share amounts) | |||||||||||||||||||||
Three Months Ended December 31, | |||||||||||||||||||||
(Unaudited) | Year Ended December 31, | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Net sales | $ | 770,487 | $ | 757,035 | $ | 2,808,062 | $ | 2,854,656 | |||||||||||||
Cost of products sold | 645,849 | 637,273 | 2,364,769 | 2,303,261 | |||||||||||||||||
Gross profit | 124,638 | 119,762 | 443,293 | 551,395 | |||||||||||||||||
Selling, general and administrative expense | 65,985 | 63,493 | 244,221 | 242,148 | |||||||||||||||||
Goodwill impairment charge | 33,827 | — | 33,827 | — | |||||||||||||||||
Operating profit | 24,826 | 56,269 | 165,245 | 309,247 | |||||||||||||||||
Interest expense | (8,142 | ) | (8,419 | ) | (32,181 | ) | (32,048 | ) | |||||||||||||
Interest income | 3,514 | 2,029 | 10,216 | 7,362 | |||||||||||||||||
Other pension and postretirement benefit expense | (6,921 | ) | (9,425 | ) | (27,806 | ) | (37,523 | ) | |||||||||||||
Other non-operating expense | (1,288 | ) | (1,645 | ) | (1,416 | ) | (3,113 | ) | |||||||||||||
Income before income taxes | 11,989 | 38,809 | 114,058 | 243,925 | |||||||||||||||||
Provision for income taxes | 11,550 | 79,929 | 33,495 | 147,180 | |||||||||||||||||
Net income (loss) | 439 | (41,120 | ) | 80,563 | 96,745 | ||||||||||||||||
Net income attributable to noncontrolling shareholders' interests | 858 | 1,038 | 3,977 | 1,345 | |||||||||||||||||
Net (loss) income attributable to Cooper Tire & Rubber Company | $ | (419 | ) | $ | (42,158 | ) | $ | 76,586 | $ | 95,400 | |||||||||||
Earnings (loss) per share: | |||||||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.82 | ) | $ | 1.52 | $ | 1.83 | |||||||||||
Diluted | $ | (0.01 | ) | $ | (0.82 | ) | $ | 1.51 | $ | 1.81 | |||||||||||
Weighted average shares outstanding (000s): | |||||||||||||||||||||
Basic | 50,073 | 51,173 | 50,350 | 52,206 | |||||||||||||||||
Diluted | 50,344 | 51,566 | 50,597 | 52,673 | |||||||||||||||||
Segment information: | |||||||||||||||||||||
Net Sales | |||||||||||||||||||||
Americas Tire | $ | 664,138 | $ | 644,639 | $ | 2,362,646 | $ | 2,416,778 | |||||||||||||
International Tire | 149,492 | 162,189 | 640,976 | 618,869 | |||||||||||||||||
Eliminations | (43,143 | ) | (49,793 | ) | (195,560 | ) | (180,991 | ) | |||||||||||||
Operating profit (loss): | |||||||||||||||||||||
Americas Tire | $ | 70,432 | $ | 68,333 | $ | 229,500 | $ | 355,059 | |||||||||||||
International Tire | (33,124 | ) | 7,410 | (14,044 | ) | 15,168 | |||||||||||||||
Unallocated corporate charges | (13,376 | ) | (19,060 | ) | (51,564 | ) | (59,153 | ) | |||||||||||||
Eliminations | 894 | (414 | ) | 1,353 | (1,827 | ) | |||||||||||||||
Cooper Tire & Rubber Company | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(Dollar amounts in thousands) | ||||||||||
December 31, | ||||||||||
2018 | 2017 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 356,254 | $ | 371,684 | ||||||
Notes receivable | 5,737 | 13,753 | ||||||||
Accounts receivable | 546,905 | 528,250 | ||||||||
Inventories | 479,980 | 511,757 | ||||||||
Other current assets | 67,856 | 63,063 | ||||||||
Total current assets | 1,456,732 | 1,488,507 | ||||||||
Property, plant and equipment, net | 1,001,921 | 966,747 | ||||||||
Goodwill | 18,851 | 54,613 | ||||||||
Intangibles | 120,321 | 133,256 | ||||||||
Restricted cash | 2,025 | 1,422 | ||||||||
Deferred income tax assets | 28,146 | 58,665 | ||||||||
Other assets | 6,209 | 4,715 | ||||||||
Total assets | $ | 2,634,205 | $ | 2,707,925 | ||||||
Liabilities and Equity | ||||||||||
Current liabilities: | ||||||||||
Notes payable | $ | 15,288 | $ | 39,450 | ||||||
Accounts payable | 286,671 | 277,060 | ||||||||
Accrued liabilities | 282,650 | 280,666 | ||||||||
Income taxes payable | 975 | 6,954 | ||||||||
Current portion of long-term debt | 174,760 | 1,413 | ||||||||
Total current liabilities | 760,344 | 605,543 | ||||||||
Long-term debt | 121,284 | 295,987 | ||||||||
Postretirement benefits other than pensions | 236,454 | 256,888 | ||||||||
Pension benefits | 147,950 | 219,534 | ||||||||
Other long-term liabilities | 135,730 | 144,217 | ||||||||
Total parent stockholders' equity | 1,172,043 | 1,127,096 | ||||||||
Noncontrolling shareholders' interests in consolidated subsidiaries | 60,400 | 58,660 | ||||||||
Total liabilities and equity | $ | 2,634,205 | $ | 2,707,925 | ||||||
Cooper Tire & Rubber Company | |||||||||||
Consolidated Statements of Cash Flows | |||||||||||
(Dollar amounts in thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2018 | 2017 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | 80,563 | $ | 96,745 | |||||||
Adjustments to reconcile net income to net cash from operations: | |||||||||||
Depreciation and amortization | 147,161 | 140,228 | |||||||||
Deferred income taxes | 30,519 | 61,571 | |||||||||
Stock-based compensation | 3,868 | 4,009 | |||||||||
Change in LIFO inventory reserve | (3,026 | ) | 2,981 | ||||||||
Amortization of unrecognized postretirement benefits | 36,662 | 42,004 | |||||||||
Goodwill impairment charge | 33,827 | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts and notes receivable | (19,729 | ) | (18,646 | ) | |||||||
Inventories | 27,438 | (31,820 | ) | ||||||||
Other current assets | (2,080 | ) | (15,648 | ) | |||||||
Accounts payable | 10,646 | (31,217 | ) | ||||||||
Accrued liabilities | 7,635 | (12,226 | ) | ||||||||
Pension and postretirement benefits | (77,883 | ) | (54,385 | ) | |||||||
Other items | (21,298 | ) | (5,972 | ) | |||||||
Net cash from operating activities | 254,303 | 177,624 | |||||||||
Investing activities: | |||||||||||
Additions to property, plant and equipment and capitalized software | (193,299 | ) | (197,186 | ) | |||||||
Proceeds from the sale of assets | 160 | 278 | |||||||||
Net cash used in investing activities | (193,139 | ) | (196,908 | ) | |||||||
Financing activities: | |||||||||||
Net payments on short-term debt | (20,027 | ) | (1,507 | ) | |||||||
Repayments of long-term debt | (1,395 | ) | (2,421 | ) | |||||||
Payment of financing fees | (1,230 | ) | — | ||||||||
Repurchase of common stock | (30,183 | ) | (90,868 | ) | |||||||
Payments of employee taxes withheld from share-based awards | (2,111 | ) | (7,002 | ) | |||||||
Payment of dividends to noncontrolling shareholders | — | (282 | ) | ||||||||
Payment of dividends to Cooper Tire & Rubber Company stockholders | (21,138 | ) | (21,914 | ) | |||||||
Issuance of common shares related to stock-based compensation | 306 | 4,224 | |||||||||
Net cash used in financing activities | (75,778 | ) | (119,770 | ) | |||||||
Effects of exchange rate changes on cash | 554 | 7,111 | |||||||||
Net change in cash, cash equivalents and restricted cash | (14,060 | ) | (131,943 | ) | |||||||
Cash, cash equivalents and restricted cash at beginning of year | 392,306 | 524,249 | |||||||||
Cash, cash equivalents and restricted cash at end of year | $ | 378,246 | $ | 392,306 | |||||||
Cooper Tire & Rubber Company |
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Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
(Dollar amounts in thousands except per share amounts) | |||||||||||||||||||||||||||||||||
ADJUSTED EARNINGS | |||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||
Net Sales |
Cost ofproductssold |
Grossprofit |
Selling,general andadministrativeexpense |
Goodwillimpairmentcharge |
Operatingprofit |
Operatingprofit % |
|||||||||||||||||||||||||||
Reported (GAAP) | $ | 770,487 | $ | 645,849 | $ | 124,638 | $ | 65,985 | $ | 33,827 | $ | 24,826 | 3.2 | % | |||||||||||||||||||
Goodwill impairment charge | — | — | — | — | (33,827 | ) | 33,827 | 4.4 | |||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 770,487 | $ | 645,849 | $ | 124,638 | $ | 65,985 | $ | — | $ | 58,653 | 7.6 | % | |||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||
Incomebeforeincometaxes |
Provisionfor incometaxes |
Effectivetax rate |
Net income |
Net incomeattributable tononcontrollingshareholderinterests |
Net (loss)incomeattributableto CooperTire &RubberCompany |
||||||||||||||||||||||||||||
Reported (GAAP) | $ | 11,989 | $ | 11,550 | 96.3 | % | $ | 439 | $ | 858 | $ | (419 | ) | ||||||||||||||||||||
Goodwill impairment charge | 33,827 | — | 71.1 | % | 33,827 | — | 33,827 | ||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 45,816 | $ | 11,550 | 25.2 | % | $ | 34,266 | $ | 858 | $ | 33,408 | |||||||||||||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||
Net (loss)incomeattributableto CooperTire &RubberCompany |
Weightedaveragenumber ofsharesoutstanding- Diluted |
Dilutedearnings(loss) pershare |
|||||||||||||||||||||||||||||||
Reported (GAAP) | $ | (419 | ) | 50,344 | $ | (0.01 | ) | ||||||||||||||||||||||||||
Goodwill impairment charge | 33,827 | — | 0.67 | ||||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 33,408 | 50,344 | $ | 0.66 | ||||||||||||||||||||||||||||
Cooper Tire & Rubber Company | |||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Dollar amounts in thousands except per share amounts) | |||||||||||||||||||||||||||||||
ADJUSTED EARNINGS | |||||||||||||||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||
Net Sales |
Cost ofproductssold |
Grossprofit |
Selling,general andadministrativeexpense |
Goodwillimpairmentcharge |
Operatingprofit |
Operatingprofit % |
|||||||||||||||||||||||||
Reported (GAAP) | $ | 2,808,062 | $ | 2,364,769 | $ | 443,293 | $ | 244,221 | $ | 33,827 | $ | 165,245 | 5.9 | % | |||||||||||||||||
Goodwill impairment charge | — | — | — |
— |
(33,827 |
) |
33,827 | 1.2 | |||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 2,808,062 | $ | 2,364,769 | $ | 443,293 | $ | 244,221 | $ | — | $ | 199,072 | 7.1 | % | |||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||
Incomebeforeincometaxes |
Provisionfor incometaxes |
Effectivetax rate |
Net income |
Net incomeattributable tononcontrollingshareholderinterests |
Net incomeattributableto CooperTire &RubberCompany |
||||||||||||||||||||||||||
Reported (GAAP) | $ | 114,058 | $ | 33,495 | 29.4 | % | $ | 80,563 | $ | 3,977 | $ | 76,586 | |||||||||||||||||||
Goodwill impairment charge | 33,827 | — | 6.8 | % | 33,827 | — | 33,827 | ||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 147,885 | $ | 33,495 | 22.6 | % | $ | 114,390 | $ | 3,977 | $ | 110,413 | |||||||||||||||||||
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||
Net incomeattributableto CooperTire &RubberCompany |
Weightedaveragenumber ofsharesoutstanding -Diluted |
Dilutedearningsper share |
|||||||||||||||||||||||||||||
Reported (GAAP) | $ | 76,586 | 50,597 | $ | 1.51 | ||||||||||||||||||||||||||
Goodwill impairment charge | 33,827 | — | 0.67 | ||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 110,413 | 50,597 | $ | 2.18 | ||||||||||||||||||||||||||
Cooper Tire & Rubber Company | ||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
(Dollar amounts in thousands except per share amounts) | ||||||||||||||||||||||||||||||||
ADJUSTED PROVISION FOR INCOME TAXES AND EPS | ||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||||
Incomebeforeincometaxes |
Provisionfor incometaxes |
Net (loss)income |
Net incomeattributable tononcontrollingshareholders'interests |
Net (loss)incomeattributable toCooper Tire& RubberCompany |
Weightedaveragenumber ofsharesoutstanding- Diluted |
Diluted(loss)earningsper share |
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Reported (GAAP) | $ | 38,809 | $ | 79,929 | $ | (41,120 | ) | $ | 1,038 | $ | (42,158 | ) | 51,566 | $ | (0.82 | ) | ||||||||||||||||
U.S. tax reform related items* | — | 55,791 | 55,791 | — | 55,791 | — | 1.08 | |||||||||||||||||||||||||
Tax valuation allowance related items** | — | 12,243 | 12,243 | — | 12,243 | — | 0.24 | |||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 38,809 | $ | 11,895 | $ | 26,914 | $ | 1,038 | $ | 25,876 | 51,566 | $ | 0.50 | |||||||||||||||||||
* U.S. tax reform related items comprised of $35,378 of deemed repatriation tax and $20,413 for the re-measurement of deferred tax assets. | ||||||||||||||||||||||||||||||||
** Tax valuation allowance related items comprised of the U.K. valuation allowance charge of $18,915, less the reversal of an Asia valuation allowance of $6,672. | ||||||||||||||||||||||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||||||||||||||
Incomebeforeincometaxes |
Provisionfor incometaxes |
Net income |
Net incomeattributable tononcontrollingshareholderinterests |
Net incomeattributable toCooper Tire& RubberCompany |
Weightedaveragenumber ofsharesoutstanding- Diluted |
Dilutedearningsper share |
||||||||||||||||||||||||||
Reported (GAAP) | $ | 243,925 | $ | 147,180 | $ | 96,745 | $ | 1,345 | $ | 95,400 | 52,673 | $ | 1.81 | |||||||||||||||||||
U.S. tax reform related items | — | 55,791 | 55,791 | — | 55,791 | — | 1.06 | |||||||||||||||||||||||||
Tax valuation allowance related items | — | 12,243 | 12,243 | — | 12,243 | — | 0.23 | |||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 243,925 | $ | 79,146 | $ | 164,779 | $ | 1,345 | $ | 163,434 | 52,673 | $ | 3.10 | |||||||||||||||||||
Three Months Ended December 31, 2017 | Year Ended December 31, 2017 | |||||||||||||||||||||||||||||||
Incomebeforeincometaxes |
Provisionfor incometaxes |
Effectivetax rate |
Incomebefore incometaxes |
Provisionfor incometaxes |
Effectivetax rate |
|||||||||||||||||||||||||||
Reported (GAAP) | $ | 38,809 | $ | 79,929 | 206.0 | % | $ | 243,925 | $ | 147,180 | 60.3 | % | ||||||||||||||||||||
U.S. tax reform related items | — | 55,791 | 143.8 | % | — | 55,791 | 22.9 | % | ||||||||||||||||||||||||
Tax valuation allowance related items | — | 12,243 | 31.5 | — | 12,243 | 5.0 | ||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 38,809 | $ | 11,895 | 30.7 | % | $ | 243,925 | $ | 79,146 | 32.4 | % | ||||||||||||||||||||
Cooper Tire & Rubber Company | ||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
(Dollar amounts in thousands) | ||||||||||||||||||||||||||||
RETURN ON INVESTED CAPITAL (ROIC) | ||||||||||||||||||||||||||||
Year Ended December 31, 2018 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Calculation of ROIC |
Calculation of NetInterest Tax Effect |
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Adjusted (Non-GAAP) operating profit | $ | 199,072 |
Provision for incometaxes (c) |
$ | 33,495 | |||||||||||||||||||||||
Adjusted (Non-GAAP) effective tax rate | 22.6 | % |
Adjusted (Non-GAAP)Income before incometaxes (d) |
147,885 | ||||||||||||||||||||||||
Income tax expense on operating profit | 45,089 |
Adjusted (Non-GAAP)effective income taxrate (c)/(d) |
22.6 | % | ||||||||||||||||||||||||
Adjusted operating profit after taxes (a) | 153,983 | |||||||||||||||||||||||||||
Total invested capital (b) | $ | 1,533,747 | ||||||||||||||||||||||||||
ROIC, including noncontrolling equity (a)/(b) | 10.0 | % | ||||||||||||||||||||||||||
Calculation of Invested Capital (five quarter average) |
Equity |
Long-termdebt |
Currentportion oflong-termdebt |
Notespayable |
Totalinvestedcapital |
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December 31, 2018 | $ | 1,232,443 | $ | 121,284 | $ | 174,760 | $ | 15,288 | $ | 1,543,775 | ||||||||||||||||||
September 30, 2018 | 1,228,509 | 294,841 | 1,376 | 14,831 | 1,539,557 | |||||||||||||||||||||||
June 30, 2018 | 1,177,268 | 295,017 | 1,398 | 47,378 | 1,521,061 | |||||||||||||||||||||||
March 31, 2018 | 1,204,026 | 295,221 | 1,446 | 41,043 | 1,541,736 | |||||||||||||||||||||||
December 31, 2017 | 1,185,756 | 295,987 | 1,413 | 39,450 | 1,522,606 | |||||||||||||||||||||||
Five quarter average | $ | 1,205,600 | $ | 260,470 | $ | 36,079 | $ | 31,598 | $ | 1,533,747 |
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