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Cooper Tire & Rubber Company Reports Record Fourth Quarter And Full Year 2012 Results

For the year ended Dec. 31, 2012, the segment reported record net sales of $3.1 billion, increasing $258 million from the prior year. Operating profit was $296 million for the year, compared with $77 million for 2011.

International Tire Operations

The company's International Tire Operations reported fourth quarter net sales of $342 million, a decrease of $35 million, or 9%, compared with the same period a year ago. Higher unit volumes of $25 million and favorable currency translation of $2 million were more than offset by lower pricing and mix of $62 million. Sales volumes in Asia decreased 2% while European sales volumes increased 23%. Lower sales in Asia were driven by reduced passenger tire exports, including intercompany shipments. European sales volumes improved as a result of incremental volumes from the company’s operation in Serbia and growth in Eastern Europe.

The International segment achieved fourth quarter operating profit of $32 million, or 9.4% of net sales, compared with $29 million, or 7.7% of net sales, for the same period a year ago. Profits improved by $67 million attributable to lower raw material costs and $2 million from higher unit volumes. Partially offsetting these improvements were unfavorable price and mix of $63 million and $2 million of higher selling, general and administrative costs, reflecting strategic investments to expand the company’s distribution network in China and to promote Cooper brands. Manufacturing efficiencies were $1 million unfavorable.

For the year ended Dec. 31, 2012, the segment reported record net sales of $1.6 billion, increasing $19 million from the prior year. Operating profit was $144 million for the year, compared with $103 million for 2011.

Outlook

Raw material prices decreased by 2% from the third quarter to the fourth quarter. Management anticipates first quarter raw material prices will be approximately the same as the fourth quarter and the long-term raw material outlook is for prices to generally trend higher. Capital expenditures for 2013 are expected to be between $195 million and $215 million, including the investment in our Enterprise Resource Planning (ERP) system and continuing investments in Serbia and China.

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