Edgar Filing: Cooper-Standard Holdings Inc.

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-123708

COOPER-STANDARD HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware

20-1945088

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

39550 Orchard Hill Place Drive

Novi, Michigan 48375

(Address of principal executive offices)

(Zip Code)

(248) 596-5900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No ¨

As of August 3, 2011 there were 18,343,725 shares of the registrant’s common stock, $0.001 par value, outstanding.

COOPER-STANDARD HOLDINGS INC.

Form 10-Q

For the period ended June 30, 2011


		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Operations		3

	Condensed Consolidated Balance Sheets		4

	Condensed Consolidated Statements of Cash Flows		5

	Notes to Condensed Consolidated Financial Statements		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		41

Item 4.	Controls and Procedures		41

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		42

Item 1A.	Risk Factors		42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		42

Item 6.	Exhibits		43

SIGNATURES			44

EXHIBITS INDEX AND EXHIBITS			45

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollar amounts in thousands except per share amounts)


	Predecessor			Successor
	Two Months Ended May 31, 2010			One Month Ended June 30, 2010			Three Months Ended June 30, 2011
Sales	$	412,804		$	215,642		$	760,460
Cost of products sold		340,381			181,875			636,752

Gross profit		72,423			33,767			123,708
Selling, administration & engineering expenses		39,099			23,045			65,602
Amortization of intangibles		130			1,264			3,936
Restructuring		5,641			382			36,981

Operating profit		27,553			9,076			17,189
Interest expense, net of interest income		(32,694	)		(3,531	)		(10,649	)
Equity earnings		1,653			734			928
Reorganization items, net		326,786			—			—
Other income (expense), net		(14,300	)		(430	)		726

Income before income taxes		308,998			5,849			8,194
Provision for income tax expense		32,652			909			6,541

Consolidated net income		276,346			4,940			1,653
Net (income) loss attributable to noncontrolling interests		(63	)		(10	)		17,369

Net income attributable to Cooper-Standard Holdings Inc.	$	276,283		$	4,930		$	19,022

Net income available to Cooper-Standard Holdings Inc. common stockholders				$	3,218		$	13,749

Basic net income per share attributable to Cooper-Standard Holdings Inc.				$	0.18		$	0.78

Diluted net income per share attributable to Cooper-Standard Holdings Inc.				$	0.18		$	0.71


	Predecessor			Successor
	Five Months Ended May 31, 2010			One Month Ended June 30, 2010			Six Months Ended June 30, 2011
Sales	$	1,009,128		$	215,642		$	1,449,232
Cost of products sold		832,201			181,875			1,204,758

Gross profit		176,927			33,767			244,474
Selling, administration & engineering expenses		92,166			23,045			126,453
Amortization of intangibles		319			1,264			7,834
Restructuring		5,893			382			41,585

Operating profit		78,549			9,076			68,602
Interest expense, net of interest income		(44,505	)		(3,531	)		(20,555	)
Equity earnings		3,613			734			2,637
Reorganization items, net		303,453			—			—
Other income (expense), net		(21,156	)		(430	)		15,075

Income before income taxes		319,954			5,849			65,759
Provision for income tax expense		39,940			909			18,819

Consolidated net income		280,014			4,940			46,940
Net (income) loss attributable to noncontrolling interests		(322	)		(10	)		17,017

Net income attributable to Cooper-Standard Holdings Inc.	$	279,692		$	4,930		$	63,957

Net income available to Cooper-Standard Holdings Inc. common stockholders				$	3,218		$	48,218

Basic net income per share attributable to Cooper-Standard Holdings Inc.				$	0.18		$	2.75

Diluted net income per share attributable to Cooper-Standard Holdings Inc.				$	0.18		$	2.49

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands except share amounts)


	Successor
	December 31, 2010		June 30, 2011
Assets			(Unaudited)
Current assets:
Cash and cash equivalents	$	294,450	$	313,469
Accounts receivable, net		380,915		541,515
Inventories, net		122,043		163,551
Prepaid expenses		20,056		25,579
Other		40,857		44,577

Total current assets		858,321		1,088,691
Property, plant and equipment, net		589,504		654,984
Goodwill		137,000		138,821
Intangibles, net		149,642		145,017
Other assets		119,309		118,546

	$	1,853,776	$	2,146,059

Liabilities and Equity
Current liabilities:
Debt payable within one year	$	19,965	$	42,289
Accounts payable		176,001		267,752
Payroll liabilities		98,722		111,033
Accrued liabilities		113,831		142,879

Total current liabilities		408,519		563,953
Long-term debt		456,758		459,069
Pension benefits		164,595		169,367
Postretirement benefits other than pensions		80,053		82,370
Deferred tax liabilities		18,337		22,732
Other liabilities		25,907		30,265

Total liabilities		1,154,169		1,327,756

Redeemable noncontrolling interest		6,215		22,935

7% Cumulative participating convertible preferred stock, $0.001 par value, 10,000,000 shares authorized at December 31, 2010, and June 30, 2011; 1,052,444 and 1,050,784 shares issued and outstanding at December 31, 2010 and June 30, 2011, respectively		130,339		130,914

Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized at December 31, 2010 and June 30, 2011; 18,376,112 and 18,343,725 shares issued and outstanding at December 31, 2010 and at June 30, 2011, respectively		17		17
Additional paid-in capital		478,706		481,107
Retained earnings		35,842		94,484
Accumulated other comprehensive income		45,881		85,914

Total Cooper-Standard Holdings Inc. equity		560,446		661,522
Noncontrolling interests		2,607		2,932

Total equity		563,053		664,454

Total liabilities and equity	$	1,853,776	$	2,146,059

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollar amounts in thousands)


	Predecessor			Successor
	Five Months May 31, 2010			One Month June 30, 2010			Six Months Ended June 30, 2011
Operating Activities:
Consolidated net income	$	280,014		$	4,940		$	46,940
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Depreciation		35,333			7,628			52,490
Amortization		319			1,264			7,834
Non-cash restructuring		46			—			864
Reorganization items		(303,453	)		—			—
Amortization of debt issuance cost		11,505			102			622
Stock-based compensation expense		244			845			5,814
Gain on partial sale of joint venture		—			—			(11,423	)
Changes in operating assets and liabilities		(99,403	)		2,385			(76,641	)

Net cash provided by (used in) operating activities		(75,395	)		17,164			26,500
Investing activities:
Property, plant and equipment		(22,935	)		(6,155	)		(45,459	)
Acquisition of business, plus cash acquired		—			—			30,878
Proceeds from partial sale of joint venture		—			—			16,000
Proceeds from the sale of assets		3,851			(91	)		451

Net cash provided by (used in) investing activities		(19,084	)		(6,246	)		1,870
Financing activities:
Proceeds from issuance of long-term debt		450,000			—			—
Payments on debtor-in-possession financing		(175,000	)		—			—
Decrease in short-term debt		(2,069	)		(405	)		(1,182	)
Payments on long-term debt		(709,574	)		(41	)		(1,301	)
Debt issuance cost and back stop fees		(30,991	)		—			—
Issuance of preferred and common stock		355,000			—			—
Cash dividends paid		—			—			(3,617	)
Other		—			(14	)		(92	)

Net cash used in financing activities		(112,634	)		(460	)		(6,192	)
Effects of exchange rate changes on cash		5,528			(388	)		(3,159	)

Changes in cash and cash equivalents		(201,585	)		10,070			19,019
Cash and cash equivalents at beginning of period		380,254			178,669			294,450

Cash and cash equivalents at end of period	$	178,669		$	188,739		$	313,469

The accompanying notes are an integral part of these financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

1. Overview

Basis of presentation

Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries, the “Company,” “Cooper-Standard,” “we” or “us”) is a leading manufacturer of fluid handling, body sealing, and Anti-Vibration Systems (“AVS”) components, systems, subsystems, and modules. The Company’s products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (“OEMs”) and replacement markets. The Company conducts substantially all of its activities through their subsidiaries.

On May 27, 2010 (the “Effective Date”), the Company and certain of its U.S. and Canadian subsidiaries emerged from bankruptcy proceedings under Chapter 11 (“Chapter 11”) of the United States Bankruptcy Code (the “Bankruptcy Code”). In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, “Reorganizations,” the Company adopted fresh-start accounting upon its emergence from Chapter 11 bankruptcy proceedings and became a new entity for financial reporting purposes as of June 1, 2010. Accordingly, the consolidated financial statements for the reporting entity subsequent to emergence from Chapter 11 bankruptcy proceedings (the “Successor”) are not comparable to the consolidated financial statements for the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings (the “Predecessor”). The “Company,” when used in reference to the period subsequent to emergence from Chapter 11 bankruptcy proceedings, refers to the Successor, and when used in reference to periods prior to emergence from Chapter 11 bankruptcy proceedings, refers to the Predecessor. For further information, see Note 3, “Reorganization under Chapter 11 of the Bankruptcy Code,” and Note 4, “Fresh-Start Accounting,” to the consolidated financial statements included in the Company’s 2010 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K, as filed with the SEC. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These financial statements include all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company. Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. The operating results for the interim period ended June 30, 2011 are not necessarily indicative of results for the full year.

The Predecessor financial statements have been restated to recognize the cancellation of Predecessor common stock of $356,595 resulting from the emergence from bankruptcy as a direct adjustment to equity as compared to including it in reorganization gain. The impact of this change on the consolidated statements of operations for the Predecessor periods is summarized below:


	Predecessor - Two Months Ended May 31, 2010
	As originally filed		As restated
Reorganization items, net	$	683,381	$	326,786
Income before income taxes		665,593		308,998
Consolidated net income		632,941		276,346
Net income attributable to Cooper-Standard Holdings, Inc.		632,878		276,283

	Predecessor - Five Months Ended May 31, 2010
	As originally filed		As restated
Reorganization items, net	$	660,048	$	303,453
Income before income taxes		676,549		319,954
Consolidated net income		636,609		280,014
Net income attributable to Cooper-Standard Holdings, Inc.		636,287		279,692

The adjustment also impacted consolidated net income and reorganization items within the consolidated statement of cash flows for the Predecessor period. The adjustment did not impact net cash used in operating activities. The impact of the adjustment has been reflected within the footnotes to the consolidated financial statements. The adjustment does not impact the Successor period financial statements or footnotes.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Recent accounting pronouncements

In June 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220).” This ASU requires companies to present items of net income, items of other comprehensive income (“OCI”) and total comprehensive income in one continuous statement or two separate but consecutive statements. In addition, this update requires reclassification adjustments between OCI and net income to be presented separately on the face of the financial statements. This ASU is effective for fiscal years and interim periods within those years, beginning after December 15, 2011 (early adoption is permitted). The impact of adoption is not expected to have a material impact on the consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820).” This ASU amends the requirements for measuring fair value and disclosing information about fair value. This ASU is effective for fiscal years and interim periods beginning after December 15, 2011 (early adoption is prohibited). The impact of adoption is not expected to have a material impact on the consolidated financial statements.

In December 2010, the FASB issued ASU 2010-28, “Intangibles—Goodwill and Other (Topic 350).” This ASU modifies the first step of the goodwill impairment test to include reporting units with zero or negative carrying amounts. For these reporting units, the second step of the goodwill impairment test shall be performed to measure the amount of impairment loss, if any; when it is more likely than not that a goodwill impairment exists. This ASU is effective for fiscal years and interim periods beginning after December 15, 2010. The Company has evaluated the ASU and does not believe it will have a material impact on the consolidated financial statements.

2. Acquisitions

On March 28, 2011, the Company completed the acquisition of USi, Inc. from Ikyuo Co. Ltd. of Japan, based in Rockford, Tennessee, for cash consideration of $6,500. USi Inc. provides an innovative hard coating process for use in automotive and industrial applications, which allows the Company to expand its technology capabilities. This acquisition was accounted for under ASC 805, “Business Combinations,” and the results of operations are included in the Company’s condensed consolidated financial statements from the date of acquisition. The estimated fair value of certain assets and liabilities are preliminary and may change in the future as information becomes available from third party valuations. This acquisition does not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

To broaden product lines across Europe, the Company completed an agreement with Fonds de Modernisation des Equipementiers Automobiles (“FMEA”) on May 2, 2011, to establish a joint venture that combined the Company’s French body sealing operations and the operations of Société des Polymères Barre-Thomas (“SPBT”). SPBT is a French supplier of anti-vibration systems and low pressure hoses, as well as body sealing products, which FMEA acquired as a preliminary step to the joint venture transaction. The Company contributed its French body sealing assets and obligations, which had a fair value of approximately $33,000, to the joint venture to acquire 51 percent ownership and FMEA contributed the assets and obligations of SPBT for its 49 percent ownership. SPBT changed its name to CS France subsequent to the transaction.

The Company accounted for the transaction as a sale of a subsidiary while retaining control under ASC 810, “Consolidations” and an acquisition of 51 percent ownership interest of SPBT under ASC 805, “Business Combinations.” Accordingly, the subsidiary was transferred at historical cost and the assets acquired and the liabilities assumed of SPBT were recorded at fair value and are included in the Company’s consolidated balance sheet as of June 30, 2011. The Company received net cash of $38,224 as part of the transaction. The operating results of CS France’s operations are included in the Company’s condensed consolidated financial statements from the date of acquisition.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

The following table summarizes the estimated fair value of SPBT assets acquired and liabilities assumed at the date of acquisition:


Cash and cash equivalents	$	38,224
Accounts receivable, net		35,670
Inventories, net		18,194
Property, plant, and equipment, net		38,172
Other assets		15,680

Total assets acquired		145,940

Accounts payable		28,043
Short-term notes payable		20,474
Other current liabilities		26,541
Pension benefits		30,499
Other long-term liabilities		8,365

Total liabilities assumed		113,922

Net assets acquired	$	32,018

The estimated fair value of certain assets and liabilities are preliminary and may change in the future as information becomes available from third party valuations. This joint venture does not meet the thresholds for a significant acquisition and therefore no pro forma financial information is presented.

In connection with the investment in CS France, the noncontrolling shareholders have the option, which is embedded in the noncontrolling interest, to require the Company to purchase the remaining 49 percent noncontrolling share at a formula price designed to approximate fair value based on operating results of the entity. The put option becomes exercisable at the expiration of the four year period following the May 2, 2011 closing date of the transaction. The combination of a noncontrolling interest and a put option resulted in a redeemable noncontrolling interest.

The noncontrolling interest is redeemable at other than fair value as the put value is determined based on a formula described above. The Company records the noncontrolling interests in CS France at the greater of 1) the initial carrying amount, increased or decreased for the noncontrolling shareholders’ share of net income or loss and its share of other comprehensive income or loss and dividends (“carrying amount”) or 2) the cumulative amount required to accrete the initial carrying amount to the redemption value using the effective interest method which resulted in accretion of $678 for the three and six months ended June 30, 2011. Such accretion amounts are recorded as increases to redeemable noncontrolling interests with offsets to equity and interest expense. According to authoritative accounting guidance, the redeemable noncontrolling interest is classified outside of permanent equity, in mezzanine equity, on the Company’s consolidated balance sheets. As of June 30, 2011 the estimated redemption value of the put option is $31,850. The redemption amount related to the put option is guaranteed by the Company and secured with the CS France shares held by a subsidiary of the Company.

According to authoritative accounting guidance for redeemable noncontrolling shareholders’ interests, to the extent the noncontrolling shareholders have a contractual right to receive an amount upon exercise of a put option that is other than fair value, and such amount is greater than carrying value, then the noncontrolling shareholder has, in substance, received a dividend distribution that is different than other common stockholders. Therefore the redemption amount in excess of fair value should be reflected in the computation of earnings per share available to the Company’s common stockholders. At June 30, 2011 there was no difference between redemption value and fair value.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

3. Goodwill and Intangibles

The changes in the carrying amount of goodwill by reportable operating segment for the six months ended June 30, 2011 are summarized as follows:


	North America		International		Total
Balance at January 1, 2011	$	115,384	$	21,616	$	137,000
Foreign exchange translation		162		1,659		1,821

Balance at June 30, 2011	$	115,546	$	23,275	$	138,821

Goodwill is not amortized but is tested annually for impairment, or when events or circumstances indicate that impairment may exist, by reporting units, which are determined in accordance with ASC 350, “Goodwill and Other Intangible Assets.”

The following table presents intangible assets and accumulated amortization balances of the Company as of December 31, 2010 and June 30, 2011, respectively:


	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Useful Life (Years)
Customer relationships	$	140,124	$	(8,035	)	$	132,089		9.6
Developed technology		9,600		(938	)		8,662		5.7
Other		8,979		(88	)		8,891

Balance at December 31, 2010	$	158,703	$	(9,061	)	$	149,642		9.2

Customer relationships	$	142,513	$	(15,158	)	$	127,355		9.1
Developed technology		9,979		(1,810	)		8,169		5.2
Other	$	11,529	$	(2,036	)		9,493

Balance at June 30, 2011	$	164,021	$	(19,004	)	$	145,017		8.7

Amortization expense totaled $3,936 for the three months ended June 30, 2011, $1,264 for the one month ended June 30, 2010 and $130 for the two months ended May 31, 2010. Amortization expense totaled $7,834 and $319 for the six months ended June 30, 2011 and the five months ended May 31, 2010, respectively. Estimated amortization expense will total approximately $15,800 for the year ending December 31, 2011.

4. Restructuring

The Company implemented several restructuring initiatives in prior years in connection with the closure of facilities in North America, Europe and Asia. The Company commenced these initiatives prior to December 31, 2007 and continued to execute the closures through June 30, 2011. The majority of the costs associated with the closures were incurred shortly after the original implementation. However, the Company continues to incur costs related principally to the liquidation of the respective facilities. The total expense incurred related to these actions amounted to $113 for the six months ended June 30, 2011, $54 for the one month ended June 30, 2010 and $470 for the five months ended May 31, 2010.

In July 2008, the Company implemented a restructuring action and announced the closure of two manufacturing facilities, one located in Australia and the other located in Germany. Both closures were a result of changes in market demands and volume reductions and are substantially completed as of June 30, 2011. However, the Company will continue to incur costs until the facilities are sold. The estimated total cost of these initiatives is approximately $21,600. The total expense incurred related to these actions amounted to $122 for the six months ended June 30, 2011, $28 for the one month ended June 30, 2010 and $(301) for the five months ended May 31, 2010.

During 2008, the Company commenced the initial phase of a reorganization ultimately involving the discontinuation of its global product line operating divisions, formerly called the Body & Chassis Systems division (which included the body sealing and AVS product lines) and the Fluid Systems division, and the establishment of a new operating structure organized on the basis of geographic regions. In the first quarter of 2009, the Company initiated the final phase of the reorganization of its operating structure, formally discontinuing its product line operating divisions and putting into place the new operating divisions based on geographic regions. The estimated cost of this initiative is approximately $23,700.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

The following tables summarize the activity for this initiative for the six months ended June 30, 2010 and 2011:


	Employee Separation Costs			Other Exit Costs		Asset Impairments		Total
Balance at January 1, 2010 - Predecessor	$	7,771		$	—	$	—	$	7,771
Expense		(450	)		—		—		(450	)
Cash payments		(3,297	)		—		—		(3,297	)

Balance at May 31, 2010	$	4,024		$	—	$	—	$	4,024
Cash payments		(125	)		—		—		(125	)

Balance at June 30, 2010 - Successor	$	3,899		$	—	$	—	$	3,899


	Employee Separation Costs			Other Exit Costs		Asset Impairments		Total
Balance at January 1, 2011	$	2,777		$	—	$	—	$	2,777
Expense		1			—		—		1
Transfer to FMEA joint venture initiative		(1,877	)		—		—		(1,877	)
Cash payments		(115	)		—		—		(115	)

Balance at June 30, 2011	$	786		$	—	$	—	$	786

The Company commenced several initiatives during 2009. These initiatives related to the reorganization or closure of operating facilities in South America, Europe and Asia Pacific. The estimated total cost associated with these actions amount to $21,000. The following tables summarize the activity for these initiatives for the six months ended June 30, 2010 and 2011:


	Employee Separation Costs			Other Exit Costs			Asset Impairments			Total
Balance at January 1, 2010 - Predecessor	$	4,215		$	56		$	—		$	4,271
Expense		5,168			314			(21	)		5,461
Cash payments		(2,680	)		(347	)		21			(3,006	)

Balance at May 31, 2010	$	6,703		$	23		$	—		$	6,726
Expense		(5	)		216			—			211
Cash payments		(2,673	)		(218	)		—			(2,891	)

Balance at June 30, 2010 - Successor	$	4,025		$	21		$	—		$	4,046


	Employee Separation Costs			Other Exit Costs			Asset Impairments			Total
Balance at January 1, 2011	$	1,167		$	220		$	—		$	1,387
Expense		52			1,358			864			2,274
Cash payments		(895	)		(810	)		—			(1,705	)
Utilization of reserve		—			—			(864	)		(864	)

Balance at June 30, 2011	$	324		$	768		$	—		$	1,092

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

In 2010, the Company initiated the closure of a facility and the consolidation of other facilities. The estimated total costs of these initiatives amount to $2,100 and are expected to be completed in 2011. The following tables summarize the activity for these initiatives for the six months ended June 30, 2010 and 2011:


	Employee Separation Costs			Other Exit Costs			Asset Impairments		Total
Balance at January 1, 2010 - Predecessor	$	—		$	—		$	—	$	—
Expense		595			118			—		713
Cash payments		(132	)		(118	)		—		(250	)

Balance at May 31, 2010	$	463		$	—		$	—	$	463
Expense		—			89			—		89
Cash payments		(103	)		(89	)		—		(192	)

Balance at June 30, 2010 - Successor	$	360		$	—		$	—	$	360


	Employee Separation Costs			Other Exit Costs			Asset Impairments		Total
Balance at January 1, 2011	$	164		$	—		$	—	$	164
Expense		—			82			—		82
Cash payments		(164	)		(82	)		—		(246	)

Balance at June 30, 2011	$	—		$	—		$	—	$	—

In the first quarter of 2011, the Company initiated the closure of a facility in North America and announced the decision to establish a centralized shared services function in Europe. The estimated total costs of these initiatives amount to $9,600 and are expected to be completed in 2012. The following table summarizes the activity for these initiatives for the six months ended June 30, 2011:


	Employee Separation Costs		Other Exit Costs			Asset Impairments		Total
Balance at January 1, 2011	$	—	$	—		$	—	$	—
Expense		1,562		3,124			—		4,686
Cash payments		—		(1,550	)		—		(1,550	)

Balance at June 30, 2011	$	1,562	$	1,574		$	—	$	3,136

In the second quarter of 2011, the Company initiated the reorganization of the Company’s French body sealing operations in relationship to the joint venture agreement with FMEA. The estimated total cost of this initiative is $43,500 and is expected to be completed in 2012. The following table summarizes the activity for this initiative for the six months ended June 30, 2011:


	Employee Separation Costs		Other Exit Costs			Asset Impairments		Total
Balance at January 1, 2011	$	—	$	—		$	—	$	—
Expense		33,328		979			—		34,307
Reorganization initiative transfer		1,877		—			—		1,877
Cash payments and foreign exchange translation		182		(979	)		—		(797	)

Balance at June 30, 2011	$	35,387	$	—		$	—	$	35,387

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

5. Inventories

Inventories are comprised of the following at December 31, 2010 and June 30, 2011:


	Successor
	December 31, 2010		June 30, 2011
Finished goods	$	32,690	$	44,015
Work in process		27,223		41,123
Raw materials and supplies		62,130		78,413

	$	122,043	$	163,551

6. Debt

Outstanding debt consisted of the following at December 31, 2010 and June 30, 2011:


	Successor
	December 31, 2010			June 30, 2011
Senior Notes	$	450,000		$	450,000
Other borrowings		26,723			51,358

Total debt	$	476,723		$	501,358
Less: Current portion of long-term debt		(19,965	)		(42,289	)

Total long-term debt	$	456,758		$	459,069

Senior ABL Facility

The Senior ABL Facility provides for an aggregate revolving loan availability of up to $125,000, subject to borrowing base availability, including a $45,000 letter of credit sub-facility and a $20,000 swing line sub-facility. The Senior ABL Facility also provides for an uncommitted $25,000 incremental loan facility, for a potential total Senior ABL Facility of $150,000 (if requested by the Borrowers and any existing lenders or new lenders agree to fund such increase). No consent of any lender (other than those participating in the increase) is required to effect any such increase. As of June 30, 2011, no amounts were drawn under the Senior ABL Facility, but there were approximately $30,662 of letters of credit outstanding.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

7. Pension and Postretirement Benefits other than Pensions

The following tables disclose the amount of net periodic benefit cost for the two and five months ended May 31, 2010, one month ended June 30, 2010 and the three and six months ended June 30, 2011 for the Company’s defined benefit plans and other postretirement benefit plans:


	Pension Benefits
	Predecessor						Successor
	Two Months Ended May 31, 2010						One Month Ended June 30, 2010						Three Months Ended June 30, 2011
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Service cost	$	401		$	350		$	187		$	192		$	526		$	644
Interest cost		2,511			1,127			1,282			549			3,687			1,823
Expected return on plan assets		(2,420	)		(586	)		(1,231	)		(287	)		(4,052	)		(1,031	)
Amortization of prior service cost and recognized actuarial loss		587			27			—			—			5			11

Net periodic benefit cost	$	1,079		$	918		$	238		$	454		$	166		$	1,447


	Pension Benefits
	Predecessor						Successor
	Five Months Ended May 31, 2010						One Month Ended June 30, 2010						Six Months Ended June 30, 2011
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Service cost	$	1,002		$	893		$	187		$	192		$	1,052		$	1,265
Interest cost		6,278			2,871			1,282			549			7,374			3,582
Expected return on plan assets		(6,050	)		(1,460	)		(1,231	)		(287	)		(8,104	)		(2,042	)
Amortization of prior service cost and recognized actuarial loss		1,467			70			—			—			10			22

Net periodic benefit cost	$	2,697		$	2,374		$	238		$	454		$	332		$	2,827



	Other Postretirement Benefits
	Predecessor			Successor
	Two Months Ended May 31, 2010			One Month Ended June 30, 2010		Three Months Ended June 30, 2011
Service cost	$	256		$	144	$	461
Interest cost		682			342		985
Amortization of prior service credit and recognized actuarial gain		(558	)		—		1
Other		14			7		21

Net periodic benefit cost	$	394		$	493	$	1,468


	Other Postretirement Benefits
	Predecessor			Successor
	Five Months Ended May 31, 2010			One Month Ended June 30, 2010		Six Months Ended June 30, 2011
Service cost	$	638		$	144	$	919
Interest cost		1,701			342		1,966
Amortization of prior service credit and recognized actuarial gain		(1,395	)		—		2
Other		35			7		42

Net periodic benefit cost	$	979		$	493	$	2,929

8. Income Taxes

Under ASC 270, “Interim Reporting,” the Company is required to determine its effective tax rate each quarter based upon its estimated annual effective tax rate. The Company is also required to record the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year where no tax benefit can be recognized are excluded from the estimated annual effective tax rate.

The effective tax rate for the three and six months ended June 30, 2011 was 80% and 29%, respectively. The effective tax rate for the two months and five months ended May 31, 2010 was 11% and 13%, respectively. The effective tax rate for the one month ended June 30, 2010 was 16%. The income tax rate for the three and six months ended June 30, 2011 varies from statutory rates due to income taxes on foreign earnings taxed at rates lower than the U.S. statutory rate, income in jurisdictions with no tax expense due to valuation allowance release, the inability to record a tax benefit for pre-tax losses in certain foreign jurisdictions to the extent not offset by other categories of income, tax credits, income tax incentives, withholding taxes, and other permanent items. Further, the

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Company’s current and future provision for income taxes will be significantly impacted by the recognition of valuation allowances in certain countries, particularly the United States. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. Accordingly, income taxes are impacted by the U.S. valuation allowance and the mix of earnings among jurisdictions.

In conjunction with the Company’s ongoing review of its actual results and anticipated future earnings, the Company reassesses the possibility of releasing the valuation allowance currently in place on its U.S. deferred tax assets. Based upon this assessment, the Company has concluded that a release of the valuation allowance could possibly occur during the next 12 months. The required accounting for the release will involve significant tax amounts and will impact earnings in the quarter in which it is deemed appropriate to release the reserve.

9. Comprehensive Income and Equity

On an annual basis, disclosure of comprehensive income is incorporated into the statement of stockholders’ equity, which is not presented on a quarterly basis. The components of comprehensive income, net of related tax, are as follows:


	Predecessor									Successor
	Two Months Ended May 31, 2010									One Month Ended June 30, 2010									Three Months Ended June 30, 2011
	Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest			Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest			Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest
Net income (loss)	$	276,346		$	276,283		$	63		$	4,940		$	4,930		$	10		$	1,653		$	19,022		$	(17,369	)
Currency translation adjustment		(31,398	)		(31,309	)		(89	)		(3,036	)		(3,031	)		(5	)		13,849			14,826			(977	)
Pension and other postretirement benefits, net of tax		115			115			—			—			—			—			(394	)		(394	)		—
Fair value change of derivatives, net of tax		57			57			—			55			55			—			250			250			—

Comprehensive income (loss):	$	245,120		$	245,146		$	(26	)	$	1,959		$	1,954		$	5		$	15,358		$	33,704		$	(18,346	)



	Predecessor									Successor
	Five Months Ended May 31, 2010									One Month Ended June 30, 2010									Six Months Ended June 30, 2011
	Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest			Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest			Total			Cooper-Standard Holdings Inc.			Noncontrolling Interest
Net income (loss)	$	280,014		$	279,692		$	322		$	4,940		$	4,930		$	10		$	46,940		$	63,957		$	(17,017	)
Currency translation adjustment		(31,074	)		(31,091	)		17			(3,036	)		(3,031	)		(5	)		37,757			38,671			(914	)
Pension and other postretirement benefits, net of tax		126			126			—			—			—			—			1,638			1,638			—
Fair value change of derivatives, net of tax		(81	)		(81	)		—			55			55			—			(276	)		(276	)		—

Comprehensive income (loss):	$	248,985		$	248,646		$	339		$	1,959		$	1,954		$	5		$	86,059		$	103,990		$	(17,931	)

The following table summarizes the Company’s equity and redeemable noncontrolling interest activity for the six months ended June 30, 2011:


	Successor
	Cooper-Standard Holdings Inc.			Noncontrolling Interest		Total Equity (Deficit)			Redeemable Noncontrolling Interest
Equity at January 1, 2011	$	560,446		$	2,607	$	563,053		$	6,215
Net income (loss)		63,957			309		64,266			(17,326	)
Preferred stock dividends		(3,684	)		—		(3,684	)		—
Repurchase of stock		(1,921	)		—		(1,921	)		—
Other comprehensive gain (loss)		40,033			16		40,049			(930	)
Stock-based compensation		5,025			—		5,025			—
FMEA joint venture transaction		(1,656	)		—		(1,656	)		34,298
Accretion of redeemable noncontrolling interest		(678	)		—		(678	)		678

Equity at June 30, 2011	$	661,522		$	2,932	$	664,454		$	22,935

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

10. Net Income Per Share Attributable to Cooper-Standard Holdings Inc.

Basic net income per share attributable to Cooper-Standard Holdings Inc. was computed using the two-class method by dividing net income attributable to Cooper-Standard Holdings Inc., after deducting dividends on the Company’s 7% preferred stock and undistributed earnings allocated to participating securities, by the average number of common shares outstanding during the period excluding unvested restricted shares. The Company’s shares of 7% preferred stock outstanding are considered participating securities.

A summary of information used to compute basic net income per share attributable to Cooper-Standard Holdings Inc. is shown below:


	Successor
	One Month Ended June 30, 2010			Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Net income attributable to Cooper-Standard Holdings Inc.	$	4,930		$	19,022		$	63,957
Less: Preferred stock dividends (paid or unpaid)		(922	)		(1,842	)		(3,684	)
Less: Undistributed earnings allocated to participating securities		(790	)		(3,431	)		(12,055	)

Net income available to Cooper-Standard Holdings Inc. common stockholders	$	3,218		$	13,749		$	48,218

Average shares of common stock outstanding		17,489,693			17,558,259			17,523,976

Basic net income per share attributable to Cooper-Standard Holdings Inc.	$	0.18		$	0.78		$	2.75

Diluted net income per share attributable to Cooper-Standard Holdings Inc. was computed using the treasury stock method and dividing net income attributable to Cooper-Standard Holdings Inc. by the average number of shares of common stock outstanding, including the dilutive effect of common stock equivalents, using the average share price during the period. Diluted net income per share attributable to Cooper-Standard Holdings Inc. computed using the two-class method was anti-dilutive. A summary of information used to compute diluted net income per share attributable to Cooper-Standard Holdings Inc. is shown below:


	Successor
	One Month Ended June 30, 2010		Three Months Ended June 30, 2011		Six Months Ended June 30, 2011
Net income available to Cooper-Standard Holdings Inc. common stockholders	$	3,218	$	13,749	$	48,218

Average common shares outstanding		17,489,693		17,558,259		17,523,976
Dilutive effect of:
Common restricted stock		191,738		429,958		474,096
Preferred restricted stock		57,247		98,632		105,848
Warrants		437,681		973,847		1,015,701
Options		—		212,653		224,473

Average dilutive shares of common stock outstanding		18,176,359		19,273,349		19,344,094

Diluted net income per share attributable to Cooper-Standard Holdings Inc.	$	0.18	$	0.71	$	2.49

The effect of certain common stock equivalents, including convertible preferred stock and options, were excluded from the computation of weighted average diluted shares outstanding for the one month ended June 30, 2010, the three months ended June 30, 2011 and the six months ended June 30, 2011 as inclusion would have resulted in antidilution. A summary of these preferred shares (as if converted) and options are shown below:


	Successor
	One Month Ended June 30, 2010		Three Months Ended June 30, 2011		Six Months Ended June 30, 2011
Number of options		838,952		113,300		113,300
Exercise price	$	25.52	$	46.75	$	46.75
Preferred shares, as if converted		4,290,488		4,381,005		4,381,005
Preferred dividends and undistributed earnings allocated to participating securities that would be added back in the diluted calculation.	$	1,712	$	5,273	$	15,739

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

11. Redeemable Preferred Stock

The following table reconciles the Company’s 7% preferred stock activity for the six months ended June 30, 2011:


	Successor
	Preferred Shares			Preferred Stock
Preferred Stock at January 1, 2011		1,052,444		$	130,339
Stock-based compensation		—			787
Repurchased preferred stock shares		(1,660	)		(212	)

Preferred Stock at June 30, 2011		1,050,784		$	130,914

12. Stock-Based Compensation

The Company measures stock-based compensation expense at fair value in accordance with the provisions of U.S. GAAP and recognizes such expense over the vesting period of the stock-based employee awards.

Predecessor

Prior to the Effective Date, the Company established the 2004 Cooper-Standard Holdings Inc. Stock Incentive Plan (“Stock Incentive Plan”), which permitted the granting of nonqualified and incentive stock options, stock appreciation rights, restricted stock and other stock-based awards to employees and directors. In addition, in December 2006 the Company established the Management Stock Purchase Plan, which provided participants the opportunity to “purchase” Company stock units. On the Effective Date, outstanding awards under the Stock Incentive Plan and Management Stock Purchase Plan were cancelled in accordance with the terms of the Plan of Reorganization. Total compensation expense recognized under these plans amounted to $245 for the five months ended May 31, 2010.

Successor

On the Effective Date, the Company adopted the 2010 Cooper-Standard Holdings, Inc. Management Incentive Plan. In addition, in 2011 the Company adopted the 2011 Omnibus Incentive Plan, which amended, restated and replaced the 2010 Cooper-Standard Holdings, Inc. Management Incentive Plan. Under these plans, stock options, restricted common stock, restricted preferred stock and unrestricted common stock have been granted to key employees and directors. Total compensation expense recognized for the three and six months ended June 30, 2011 totaled $3,141 and $5,814, respectively.

13. Other Income (Expense)

The components of other income (expense) are as follows:


	Predecessor			Successor
	Two Months Ended May 31, 2010			One Month Ended June 30, 2010			Three Months Ended June 30, 2011
Foreign currency gains (losses)	$	(14,126	)	$	(349	)	$	1,091
Loss on sale of receivables		(174	)		(81	)		(343	)
Miscellaneous expense		—			—			(22	)

Other income (expense)	$	(14,300	)	$	(430	)	$	726


	Predecessor			Successor
	Five Months Ended May 31, 2010			One Month Ended June 30, 2010			Six Months Ended June 30, 2011
Foreign currency gains (losses)	$	(20,779	)	$	(349	)	$	4,303
Loss on sale of receivables		(377	)		(81	)		(617	)
Gain on partial sale of joint venture (Note 14)		—			—			11,423
Miscellaneous expense		—			—			(34	)

Other income (expense)	$	(21,156	)	$	(430	)	$	15,075

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

14. Related Party Transactions

Sales to NISCO, a 40% owned joint venture, totaled $5,372 for the three months ended June 30, 2011, $2,401 for the one month ended June 30, 2010 and $4,794 for the two months ended May 31, 2010. Sales to NISCO totaled $14,033 and $12,273 for the six months ended June 30, 2011 and for the five months ended May 31, 2010, respectively. In March 2011, the Company received from NISCO a dividend of $4,750, all of which was related to earnings. In March 2011, the Company sold a 10% ownership interest in NISCO for $16,000. As a result of this transaction, the Company’s ownership percentage in NISCO has decreased from 50% to 40%, and a gain of $11,423 was recognized in other income in the condensed consolidated financial statements for the period ended March 31, 2011.

Purchases of materials from Guyoung Technology Co. Ltd, a Korean corporation of which the Company owns approximately 20% of the common stock, totaled $733 for the three months ended June 30, 2011, $897 for the one month ended June 2010, and $1,835 for the two months ended May 31, 2010. Purchases of material from Guyoung Technology Co. Ltd totaled $1,592 and $4,052 for the six months ended June 30, 2011 and for the five months ended May 31, 2010, respectively.

15. Business Segments

ASC 280, “Segment Reporting,” establishes the standards for reporting information about operating segments in financial statements. In applying the criteria set forth in ASC 280, the Company has determined that it operates in two segments. The Company’s principal product lines are body and chassis products and fluid handling products. The Company evaluates segment performance based on segment profit before tax. The results of each segment include certain allocations for general, administrative, interest, and other shared costs.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

The following table details information on the Company’s business segments:


	Predecessor			Successor
	Two Months Ended May 31, 2010			One Month Ended June 30, 2010			Three Months Ended June 30, 2011
Sales to external customers
North America	$	211,594		$	116,396		$	366,307
International		201,210			99,246			394,153

Consolidated	$	412,804		$	215,642		$	760,460

Intersegment sales
North America	$	581		$	509		$	1,754
International		1,409			496			1,770
Eliminations and other		(1,990	)		(1,005	)		(3,524	)

Consolidated	$	—		$	—		$	—

Segment profit (loss)
North America	$	229,571		$	8,133		$	45,780
International		79,427			(2,284	)		(37,586	)

Income before income taxes	$	308,998		$	5,849		$	8,194

Restructuring cost included in segment profit (loss)
North America	$	676		$	143		$	1,437
International		4,965			239			35,544

Consolidated	$	5,641		$	382		$	36,981



	Predecessor			Successor
	Five Months Ended May 31, 2010			One Month Ended June 30, 2010			Six Months Ended June 30, 2011
Sales to external customers
North America	$	508,738		$	116,396		$	725,148
International		500,390			99,246			724,084

Consolidated	$	1,009,128		$	215,642		$	1,449,232

Intersegment sales
North America	$	1,757		$	509		$	3,201
International		3,206			496			4,051
Eliminations and other		(4,963	)		(1,005	)		(7,252	)

Consolidated	$	—		$	—		$	—

Segment profit (loss)
North America	$	233,526		$	8,133		$	100,030
International		86,428			(2,284	)		(34,271	)

Income before income taxes	$	319,954		$	5,849		$	65,759

Restructuring cost included in segment profit (loss)
North America	$	851		$	143		$	3,120
International		5,042			239			38,465

Consolidated	$	5,893		$	382		$	41,585


	Successor
	December 31, 2010		June 30, 2011
Segment assets
North America	$	763,401	$	797,559
International		878,161		1,155,451
Eliminations and other		212,214		193,049

Consolidated	$	1,853,776	$	2,146,059

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

16. Guarantor and Non-Guarantor Subsidiaries

In connection with the May 27, 2010 Reorganization of the Company, Cooper-Standard Automotive Inc. (the “Issuer”), a wholly-owned subsidiary of the Company, issued Senior Notes with a total principal amount of $450,000. Cooper-Standard Holdings Inc. and all wholly-owned domestic subsidiaries of Cooper-Standard Automotive Inc. (the “Guarantors”) unconditionally guarantee the notes. The following condensed consolidated financial data provides information regarding the financial position, results of operations, and cash flows of the Guarantors. Separate financial statements of the Guarantors are not presented because management has determined that those would not be material to the holders of the Senior Notes. The Guarantors account for their investments in the non-guarantor subsidiaries on the equity method. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Two Months Ended May 31, 2010

Predecessor


	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
	(dollars in millions)
Sales	$	—	$	75.3		$	92.6		$	263.2		$	(18.3	)	$	412.8
Cost of products sold		—		64.3			81.6			212.8			(18.3	)		340.4
Selling, administration, & engineering expenses		—		17.1			(7.6	)		29.6			—			39.1
Amortization of intangibles		—		0.1			—			—			—			0.1
Restructuring		—		—			—			5.6			—			5.6

Operating profit (loss)		—		(6.2	)		18.6			15.2			—			27.6
Interest expense, net of interest income		—		(26.2	)		—			(6.5	)		—			(32.7	)
Equity earnings		—		—			1.0			0.6			—			1.6
Reorganization items, net		—		182.9			(2.7	)		146.5			—			326.7
Other income (expense), net		—		4.1			0.3			(18.7	)		—			(14.3	)

Income before income taxes		—		154.6			17.2			137.1			—			308.9
Provision for income tax expense (benefit)		—		32.9			(31.2	)		30.9			—			32.6

Income before equity in income of subsidiaries		—		121.7			48.4			106.2			—			276.3
Equity in net income of subsidiaries		276.3		154.6			—			—			(430.9	)		—

Consolidated net income		276.3		276.3			48.4			106.2			(430.9	)		276.3
Less: Net income attributable to noncontrolling interest		—		—			—			—			—			—

Net income attributable to Cooper-Standard Holdings Inc.	$	276.3	$	276.3		$	48.4		$	106.2		$	(430.9	)	$	276.3

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the One Month Ended June 30, 2010

Successor


	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
	(dollars in millions)
Sales	$	—	$	40.0		$	51.2		$	134.2		$	(9.8	)	$	215.6
Cost of products sold		—		36.3			38.9			116.5			(9.8	)		181.9
Selling, administration, & engineering expenses		—		13.3			(0.7	)		10.4			—			23.0
Amortization of intangibles		—		0.9			—			0.4			—			1.3
Restructuring		—		—			—			0.4			—			0.4

Operating profit (loss)		—		(10.5	)		13.0			6.5			—			9.0
Interest expense, net of interest income		—		(3.0	)		—			(0.5	)		—			(3.5	)
Equity earnings		—		—			0.5			0.2			—			0.7
Other income (expense), net		—		0.5			0.1			(1.0	)		—			(0.4	)

Income (loss) before income taxes		—		(13.0	)		13.6			5.2			—			5.8
Provision for income tax expense (benefit)		—		(3.5	)		3.7			0.7			—			0.9

Income (loss) before equity in income (loss) of subsidiaries		—		(9.5	)		9.9			4.5			—			4.9
Equity in net income of subsidiaries		4.9		14.4			—			—			(19.3	)		—

Consolidated net income		4.9		4.9			9.9			4.5			(19.3	)		4.9
Less: Net income attributable to noncontrolling interest		—		—			—			—			—			—

Net income attributable to Cooper-Standard Holdings Inc.	$	4.9	$	4.9		$	9.9		$	4.5		$	(19.3	)	$	4.9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2011

Successor


	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
	(dollars in millions)
Sales	$	—	$	125.3		$	155.2		$	515.4		$	(35.4	)	$	760.5
Cost of products sold		—		102.5			126.6			443.1			(35.4	)		636.8
Selling, administration, & engineering expenses		—		29.8			(3.7	)		39.5			—			65.6
Amortization of intangibles		—		2.8			—			1.1			—			3.9
Restructuring		—		0.1			1.3			35.6			—			37.0

Operating profit (loss)		—		(9.9	)		31.0			(3.9	)		—			17.2
Interest expense, net of interest income		—		(8.8	)		—			(1.9	)		—			(10.7	)
Equity earnings (loss)		—		0.1			(0.3	)		1.1			—			0.9
Other income (expense), net		—		13.3			0.5			(13.1	)		—			0.7

Income (loss) before income taxes		—		(5.3	)		31.2			(17.8	)		—			8.1
Provision for income tax expense (benefit)		—		(0.5	)		2.3			4.7			—			6.5

Income (loss) before equity in income of subsidiaries		—		(4.8	)		28.9			(22.5	)		—			1.6
Equity in net income of subsidiaries		1.6		6.4			—			—			(8.0	)		—

Consolidated net income (loss)		1.6		1.6			28.9			(22.5	)		(8.0	)		1.6
Add: Net loss attributable to noncontrolling interest		—		—			—			17.4			—			17.4

Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	1.6	$	1.6		$	28.9		$	(5.1	)	$	(8.0	)	$	19.0

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Five Months Ended May 31, 2010

Predecessor


	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
						(dollars in millions)
Sales	$	—	$	179.5		$	223.1		$	650.8		$	(44.3	)	$	1,009.1
Cost of products sold		—		154.2			181.7			540.6			(44.3	)		832.2
Selling, administration, & engineering expenses		—		41.9			—			50.2			—			92.1
Amortization of intangibles		—		0.2			—			0.1			—			0.3
Restructuring		—		0.1			0.1			5.7			—			5.9

Operating profit (loss)		—		(16.9	)		41.3			54.2			—			78.6
Interest expense, net of interest income		—		(32.7	)		—			(11.8	)		—			(44.5	)
Equity earnings		—		—			2.6			1.0			—			3.6
Reorganization items, net		—		160.0			(2.7	)		146.1			—			303.4
Other income (expense)		—		4.2			0.4			(25.8	)		—			(21.2	)

Income before income taxes		—		114.6			41.6			163.7			—			319.9
Provision for income tax expense (benefit)		—		39.5			(35.2	)		35.6			—			39.9

Income before equity in income of subsidiaries		—		75.1			76.8			128.1			—			280.0
Equity in net income of subsidiaries		280.0		204.9			—			—			(484.9	)		—

Consolidated net income		280.0		280.0			76.8			128.1			(484.9	)		280.0
Less: Net income attributable to noncontrolling interest		—		—			—			(0.3	)		—			(0.3	)

Net income attributable to Cooper-Standard Holdings Inc.	$	280.0	$	280.0		$	76.8		$	127.8		$	(484.9	)	$	279.7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2011

Successor


	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
						(dollars in millions)
Sales	$	—	$	250.5		$	311.7		$	955.6		$	(68.6	)	$	1,449.2
Cost of products sold		—		205.2			257.4			810.8			(68.6	)		1,204.8
Selling, administration, & engineering expenses		—		57.9			(5.1	)		73.6			—			126.4
Amortization of intangibles		—		5.6			—			2.2			—			7.8
Restructuring		—		0.2			3.0			38.4			—			41.6

Operating profit (loss)		—		(18.4	)		56.4			30.6			—			68.6
Interest expense, net of interest income		—		(17.6	)		—			(3.0	)		—			(20.6	)
Equity earnings		—		0.1			0.5			2.0			—			2.6
Other income (expense), net		—		25.5			12.6			(22.9	)		—			15.2

Income (loss) before income taxes		—		(10.4	)		69.5			6.7			—			65.8
Provision for income tax expense (benefit)		—		(1.0	)		6.3			13.5			—			18.8

Income (loss) before equity in income (loss) of subsidiaries		—		(9.4	)		63.2			(6.8	)		—			47.0
Equity in net income of subsidiaries		47.0		56.4			—			—			(103.4	)		—

Consolidated net income (loss)		47.0		47.0			63.2			(6.8	)		(103.4	)		47.0
Add: Net loss attributable to noncontrolling interest		—		—			—			17.0			—			17.0

Net income attributable to Cooper-Standard Holdings Inc.	$	47.0	$	47.0		$	63.2		$	10.2		$	(103.4	)	$	64.0

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2010

Successor


	Parent		Issuer		Guarantors			Non-Guarantors			Eliminations			Consolidated Totals
					(dollars in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	163.0	$	—		$	131.5		$	—		$	294.5
Accounts receivable, net		—		54.3		72.6			254.0			—			380.9
Inventories		—		17.4		28.3			76.3			—			122.0
Prepaid Expenses		—		4.3		0.6			15.2			—			20.1
Other		—		16.4		(5.2	)		29.6			—			40.8

Total current assets		—		255.4		96.3			506.6			—			858.3
Investments in affiliates and intercompany accounts, net		560.5		384.5		934.5			(206.6	)		(1,623.8	)		49.1
Property, plant, and equipment, net		—		68.1		71.5			449.9			—			589.5
Goodwill		—		111.1		—			25.9			—			137.0
Other assets		—		105.7		(8.5	)		122.7			—			219.9

	$	560.5	$	924.8	$	1,093.8		$	898.5		$	(1,623.8	)	$	1,853.8

LIABILITIES & EQUITY
Current liabilities:
Debt payable within one year	$	—	$	—	$	—		$	19.9		$	—		$	19.9
Accounts payable		—		34.2		25.5			116.3			—			176.0
Accrued liabilities		—		79.8		11.2			121.6			—			212.6

Total current liabilities		—		114.0		36.7			257.8			—			408.5
Long-term debt		—		450.0		—			6.8			—			456.8
Other liabilities		—		153.7		5.9			129.3			—			288.9

Total liabilities		—		717.7		42.6			393.9			—			1,154.2
Redeemable noncontrolling interest		—		—		—			6.2			—			6.2
Preferred Stock		—		130.3		—			—			—			130.3
Total Cooper-Standard Holdings Inc. stockholders’ equity		560.5		76.8		1,051.2			495.8			(1,623.8	)		560.5
Noncontrolling interest		—		—		—			2.6			—			2.6

Total equity		560.5		76.8		1,051.2			498.4			(1,623.8	)		563.1

Total liabilities and equity	$	560.5	$	924.8	$	1,093.8		$	898.5		$	(1,623.8	)	$	1,853.8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2011

Successor


	Parent		Issuer		Guarantors		Non-Guarantors			Eliminations			Consolidated Totals
					(dollars in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	164.9	$	—	$	148.6		$	—		$	313.5
Accounts receivable, net		—		79.1		87.3		375.1			—			541.5
Inventories		—		19.4		26.4		117.8			—			163.6
Prepaid expenses		—		5.0		0.5		20.1			—			25.6
Other		—		16.8		—		27.7			—			44.5

Total current assets		—		285.2		114.2		689.3			—			1,088.7
Investments in affiliates and intercompany accounts, net		661.5		347.3		973.3		(165.7	)		(1,770.0	)		46.4
Property, plant, and equipment, net		—		71.3		69.7		514.0			—			655.0
Goodwill		—		111.1		—		27.7			—			138.8
Other assets		—		81.2		6.5		129.5			—			217.2

	$	661.5	$	896.1	$	1,163.7	$	1,194.8		$	(1,770.0	)	$	2,146.1

LIABILITIES & EQUITY
Current liabilities:
Debt payable within one year	$	—	$	—	$	—	$	42.3		$	—		$	42.3
Accounts payable		—		53.9		34.7		179.2			—			267.8
Accrued liabilities		—		58.6		8.6		186.7			—			253.9

Total current liabilities		—		112.5		43.3		408.2			—			564.0
Long-term debt		—		450.0		—		9.1			—			459.1
Other liabilities		—		128.9		5.9		170.0			—			304.8

Total liabilities		—		691.4		49.2		587.3			—			1,327.9
Redeemable noncontrolling interest		—		—		—		22.9			—			22.9
Preferred stock		—		130.9		—		—			—			130.9
Total Cooper-Standard Holdings Inc. stockholders’ equity		661.5		73.8		1,114.5		581.7			(1,770.0	)		661.5
Noncontrolling interest		—		—		—		2.9			—			2.9

Total equity		661.5		73.8		1,114.5		584.6			(1,770.0	)		664.4

Total liabilities and equity	$	661.5	$	896.1	$	1,163.7	$	1,194.8		$	(1,770.0	)	$	2,146.1

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company