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Cooper Tire & Rubber 's CEO Discusses Q2 2012 Results - Earnings Call Transcript

In association with the press release, which was sent out earlier this morning, we will provide an overview of the company's quarterly operations and results. The press release contains a link to a set of slides that are a summary of information included in the press release and 10-Q. These slides are intended to help investors and analysts quickly obtain information. They will not be used as the focus of today's call.

Following our prepared comments, we will open the call to participants for a question-and-answer session. Questions may also be directed to our email address, which is investorrelations@cooppertire.com.

Today's call will begin with Roy providing an overview of our results. He will then turn it to Brad for a discussion on some of the details by segment and comments on other matters. Roy will then summarize and provide comments on our outlook. Now, let me turn the call over to Roy Armes.

Roy Armes

Thanks Stewart and good morning to everyone. Our second quarter results were very strong with the top line exceeding $1 billion a 15% increase over the same period a year ago. This growth contributed to record operating profit for both segments of our business in North America and international which demonstrates the strengthening of our business model and as a result of disciplined execution of our strategic plan.

Our strong second quarter performance was driven by two key factors. The first is increased volumes. We experienced higher demand for our products across our portfolio during the second quarter. In fact growing demand resulted in U.S. light vehicle volumes increasing 16% over the second quarter a year ago, and the TBR volumes increased 5% for the quarter.

International volumes also exhibited strong growth increasing 19% over the prior year second quarter and establishing a new record for the segment. This growth was achieved in the phase of weaker overall industry trends illustrating that the market place is increasingly recognizing a performance in value of our products. A second factor that’s possibly influenced our results was the decline in raw materials and commodity prices. As you know these prices begin to drop after the first quarter with natural rubber and polybutadiene prices experiencing the most dramatic declines. Obviously this drop in prices provided a tailwind for the industry and Cooper creating an improved balance between pricing of raw materials. Brad will have a lot more to say on this a little bit later on the call this morning.

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