UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


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

For the quarterly period ended June 30, ~~2022~~2023


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

For the transition period from __________ to __________.

Commission File Number: 001-36127

______________________________

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.)

40300 Traditions Drive

Northville, Michigan 48168

(Address of principal executive offices)

(Zip Code)

(248) 596-5900

(Registrant’s telephone number, including area code)

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CPS

New York Stock Exchange

Preferred Stock Purchase Rights

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,~~��~~” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of July ~~29, 2022,~~28, 2023, there were ~~17,106,178~~17,197,479 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, ~~2022~~2023

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)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Sales	Sales	$	605,917	$	533,185	$	1,218,901	$	1,202,152	Sales	$	723,740	$	605,917	$	1,406,198	$	1,218,901
Cost of products sold	Cost of products sold	590,541		534,118		1,181,983		1,134,793		Cost of products sold	646,026		590,541		1,286,656		1,181,983
Gross profit (loss)		15,376		(933)		36,918		67,359
Gross profit										Gross profit	77,714		15,376		119,542		36,918
Selling, administration & engineering expenses	Selling, administration & engineering expenses	52,282		50,085		104,186		108,139		Selling, administration & engineering expenses	54,605		52,282		106,694		104,186
Loss (gain) on sale of business, net		—		195		—		(696)

Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		(33,391)		—		Gain on sale of fixed assets, net	—		(33,391)		—		(33,391)
Amortization of intangibles	Amortization of intangibles	1,737		1,933		3,483		3,705		Amortization of intangibles	1,672		1,737		3,479		3,483
Restructuring charges	Restructuring charges	3,482		11,631		11,313		32,678		Restructuring charges	8,499		3,482		10,878		11,313

Impairment charges	Impairment charges	3		841		458		841		Impairment charges	654		3		654		458
Operating loss		(8,737)		(65,618)		(49,131)		(77,308)
Operating profit (loss)										Operating profit (loss)	12,284		(8,737)		(2,163)		(49,131)
Interest expense, net of interest income	Interest expense, net of interest income	(18,454)		(18,125)		(36,631)		(35,909)		Interest expense, net of interest income	(34,034)		(18,454)		(64,254)		(36,631)
Equity in (losses) earnings of affiliates		(3,446)		393		(4,802)		1,179

Other (expense) income, net		(1,509)		1,362		(2,720)		(3,727)
Equity in earnings (losses) of affiliates										Equity in earnings (losses) of affiliates	656		(3,446)		458		(4,802)
Loss on refinancing and extinguishment of debt										Loss on refinancing and extinguishment of debt	—		—		(81,885)		—
Other expense, net										Other expense, net	(2,561)		(1,509)		(6,565)		(2,720)
Loss before income taxes	Loss before income taxes	(32,146)		(81,988)		(93,284)		(115,765)		Loss before income taxes	(23,655)		(32,146)		(154,409)		(93,284)
Income tax expense (benefit)		2,005		(17,459)		2,657		(16,523)
Income tax expense										Income tax expense	4,765		2,005		5,123		2,657
Net loss	Net loss	(34,151)		(64,529)		(95,941)		(99,242)		Net loss	(28,420)		(34,151)		(159,532)		(95,941)
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	904		918		1,334		1,767		Net loss attributable to noncontrolling interests	591		904		1,336		1,334
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss attributable to Cooper-Standard Holdings Inc.	$	(27,829)	$	(33,247)	$	(158,196)	$	(94,607)

Loss per share:	Loss per share:									Loss per share:
Basic	Basic	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Basic	$	(1.61)	$	(1.93)	$	(9.15)	$	(5.51)
Diluted	Diluted	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Diluted	$	(1.61)	$	(1.93)	$	(9.15)	$	(5.51)

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(Dollar amounts in thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net loss	Net loss	$	(34,151)	$	(64,529)	$	(95,941)	$	(99,242)	Net loss	$	(28,420)	$	(34,151)	$	(159,532)	$	(95,941)
Other comprehensive income (loss):
Other comprehensive loss:										Other comprehensive loss:
Currency translation adjustment	Currency translation adjustment	(17,084)		8,713		(8,719)		2,141		Currency translation adjustment	(6,889)		(17,084)		(6,982)		(8,719)
Benefit plan liabilities adjustment, net of tax	Benefit plan liabilities adjustment, net of tax	2,063		611		3,047		3,350		Benefit plan liabilities adjustment, net of tax	142		2,063		242		3,047
Fair value change of derivatives, net of tax	Fair value change of derivatives, net of tax	(1,023)		751		1,408		180		Fair value change of derivatives, net of tax	(574)		(1,023)		1,769		1,408
Other comprehensive (loss) income, net of tax		(16,044)		10,075		(4,264)		5,671
Other comprehensive loss, net of tax										Other comprehensive loss, net of tax	(7,321)		(16,044)		(4,971)		(4,264)
Comprehensive loss	Comprehensive loss	(50,195)		(54,454)		(100,205)		(93,571)		Comprehensive loss	(35,741)		(50,195)		(164,503)		(100,205)
Comprehensive loss attributable to noncontrolling interests	Comprehensive loss attributable to noncontrolling interests	627		727		1,068		1,828		Comprehensive loss attributable to noncontrolling interests	185		627		953		1,068
Comprehensive loss attributable to Cooper-Standard Holdings Inc.	Comprehensive loss attributable to Cooper-Standard Holdings Inc.	$	(49,568)	$	(53,727)	$	(99,137)	$	(91,743)	Comprehensive loss attributable to Cooper-Standard Holdings Inc.	$	(35,556)	$	(49,568)	$	(163,550)	$	(99,137)

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)


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	250,458	$	248,010	Cash and cash equivalents	$	73,063	$	186,875
Accounts receivable, net	Accounts receivable, net	350,001		317,469		Accounts receivable, net	390,033		358,700
Tooling receivable, net	Tooling receivable, net	87,414		88,900		Tooling receivable, net	94,579		95,965
Inventories	Inventories	183,568		158,075		Inventories	172,999		157,756
Prepaid expenses	Prepaid expenses	30,360		26,313		Prepaid expenses	25,779		31,170
Income tax receivable and refundable credits	Income tax receivable and refundable credits	26,838		82,813		Income tax receivable and refundable credits	13,315		13,668
Other current assets	Other current assets	70,467		73,317		Other current assets	114,108		101,515

Total current assets	Total current assets	999,106		994,897		Total current assets	883,876		945,649
Property, plant and equipment, net	Property, plant and equipment, net	702,507		784,348		Property, plant and equipment, net	624,073		642,860
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	102,407		111,052		Operating lease right-of-use assets, net	87,341		94,571
Goodwill	Goodwill	142,213		142,282		Goodwill	142,114		142,023
Intangible assets, net	Intangible assets, net	51,015		60,375		Intangible assets, net	43,702		47,641

Other assets	Other assets	143,134		133,539		Other assets	89,713		90,785
Total assets	Total assets	$	2,140,382	$	2,226,493	Total assets	$	1,870,819	$	1,963,529

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities:	Current liabilities:					Current liabilities:
Debt payable within one year	Debt payable within one year	$	51,016	$	56,111	Debt payable within one year	$	49,813	$	54,130
Accounts payable	Accounts payable	357,327		348,133		Accounts payable	357,682		338,210
Payroll liabilities	Payroll liabilities	94,646		69,353		Payroll liabilities	106,865		99,029

Accrued liabilities	Accrued liabilities	121,416		101,466		Accrued liabilities	141,956		119,463
Current operating lease liabilities	Current operating lease liabilities	21,177		22,552		Current operating lease liabilities	19,099		20,786

Total current liabilities	Total current liabilities	645,582		597,615		Total current liabilities	675,415		631,618
Long-term debt	Long-term debt	979,227		980,604		Long-term debt	1,012,289		982,054
Pension benefits	Pension benefits	120,438		129,880		Pension benefits	101,369		98,481
Postretirement benefits other than pensions	Postretirement benefits other than pensions	42,525		43,498		Postretirement benefits other than pensions	31,163		31,014

Long-term operating lease liabilities	Long-term operating lease liabilities	84,940		92,760		Long-term operating lease liabilities	72,156		77,617
Other liabilities	Other liabilities	45,957		50,776		Other liabilities	40,130		41,553
Total liabilities	Total liabilities	1,918,669		1,895,133		Total liabilities	1,932,522		1,862,337

Equity:	Equity:					Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,166,930 shares issued and 17,101,121 shares outstanding as of June 30, 2022, and 19,057,788 shares issued and 16,991,979 outstanding as of December 31, 2021		17		17
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,262,362 shares issued and 17,196,553 shares outstanding as of June 30, 2023, and 19,173,838 shares issued and 17,108,029 outstanding as of December 31, 2022						Common stock, $0.001 par value, 190,000,000 shares authorized; 19,262,362 shares issued and 17,196,553 shares outstanding as of June 30, 2023, and 19,173,838 shares issued and 17,108,029 outstanding as of December 31, 2022	17		17
Additional paid-in capital	Additional paid-in capital	506,062		504,497		Additional paid-in capital	509,106		507,498
Retained (loss) earnings		(69,054)		25,553
Retained deficit						Retained deficit	(348,027)		(189,831)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(209,714)		(205,184)		Accumulated other comprehensive loss	(215,325)		(209,971)
Total Cooper-Standard Holdings Inc. equity	Total Cooper-Standard Holdings Inc. equity	227,311		324,883		Total Cooper-Standard Holdings Inc. equity	(54,229)		107,713
Noncontrolling interests	Noncontrolling interests	(5,598)		6,477		Noncontrolling interests	(7,474)		(6,521)
Total equity	Total equity	221,713		331,360		Total equity	(61,703)		101,192
Total liabilities and equity	Total liabilities and equity	$	2,140,382	$	2,226,493	Total liabilities and equity	$	1,870,819	$	1,963,529

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Dollar amounts in thousands except share amounts)


		Total Equity																Total Equity
		Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity			Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2021		16,991,979	$	17	$	504,497	$	25,553	$	(205,184)	$	324,883	$	6,477	$	331,360

Share-based compensation, net		69,716	—		437		—		—		437		—		437

Deconsolidation of noncontrolling interest		—	—		—		—		—		—		(11,007)		(11,007)
Net loss		—	—		—		(61,360)		—		(61,360)		(430)		(61,790)
Other comprehensive income (loss)		—	—		—		—		11,791		11,791		(11)		11,780
Balance as of March 31, 2022		17,061,695	$	17	$	504,934	$	(35,807)	$	(193,393)	$	275,751	$	(4,971)	$	270,780
Balance as of December 31, 2022																	Balance as of December 31, 2022	17,108,029	$	17	$	507,498	$	(189,831)	$	(209,971)	$	107,713	$	(6,521)	$	101,192

Share-based compensation, net	Share-based compensation, net	39,426	—		1,128		—		—		1,128		—		1,128		Share-based compensation, net	30,489	—		740		—		—		740		—		740

Net loss	Net loss	—	—		—		(33,247)		—		(33,247)		(904)		(34,151)		Net loss	—	—		—		(130,367)		—		(130,367)		(745)		(131,112)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		—		(16,321)		(16,321)		277		(16,044)		Other comprehensive income (loss)	—	—		—		—		2,373		2,373		(23)		2,350
Balance as of June 30, 2022		17,101,121	$	17	$	506,062	$	(69,054)	$	(209,714)	$	227,311	$	(5,598)	$	221,713
Balance as of March 31, 2023																	Balance as of March 31, 2023	17,138,518	$	17	$	508,238	$	(320,198)	$	(207,598)	$	(19,541)	$	(7,289)	$	(26,830)

Share-based compensation, net																	Share-based compensation, net	58,035	—		868		—		—		868		—		868

Net loss																	Net loss	—	—		—		(27,829)		—		(27,829)		(591)		(28,420)
Other comprehensive (loss) income																	Other comprehensive (loss) income	—	—		—		—		(7,727)		(7,727)		406		(7,321)
Balance as of June 30, 2023																	Balance as of June 30, 2023	17,196,553	$	17	$	509,106	$	(348,027)	$	(215,325)	$	(54,229)	$	(7,474)	$	(61,703)

Total Equity
Common Shares Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Cooper-Standard Holdings Inc. Equity Noncontrolling Interests Total Equity
Balance as of December 31, 2020 16,897,085 $ 17 $ 498,719 $ 350,270 $ (241,896) $ 607,110 $ 17,001 $ 624,111
Share-based compensation, net 45,467 — 952 — — 952 — 952
Net loss — — — (33,864) — (33,864) (849) (34,713)
Other comprehensive loss — — — — (4,152) (4,152) (252) (4,404)
Balance as of March 31, 2021 16,942,552 $ 17 $ 499,671 $ 316,406 $ (246,048) $ 570,046 $ 15,900 $ 585,946
Share-based compensation, net 45,962 — 1,677 — — 1,677 — 1,677
Net loss — — — (63,611) — (63,611) (918) (64,529)
Other comprehensive income — — — — 9,884 9,884 191 10,075
Balance as of June 30, 2021 16,988,514 $ 17 $ 501,348 $ 252,795 $ (236,164) $ 517,996 $ 15,173 $ 533,169


	Total Equity
	Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2021	16,991,979	$	17	$	504,497	$	25,553	$	(205,184)	$	324,883	$	6,477	$	331,360


Share-based compensation, net	69,716	—		437		—		—		437		—		437
Deconsolidation of noncontrolling interest	—	—		—		—		—		—		(11,007)		(11,007)
Net loss	—	—		—		(61,360)		—		(61,360)		(430)		(61,790)
Other comprehensive income (loss)	—	—		—		—		11,791		11,791		(11)		11,780
Balance as of March 31, 2022	17,061,695	$	17	$	504,934	$	(35,807)	$	(193,393)	$	275,751	$	(4,971)	$	270,780


Share-based compensation, net	39,426	—		1,128		—		—		1,128		—		1,128



Net loss	—	—		—		(33,247)		—		(33,247)		(904)		(34,151)
Other comprehensive (loss) income	—	—		—		—		(16,321)		(16,321)		277		(16,044)
Balance as of June 30, 2022	17,101,121	$	17	$	506,062	$	(69,054)	$	(209,714)	$	227,311	$	(5,598)	$	221,713

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)


		Six Months Ended June 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Operating Activities:	Operating Activities:					Operating Activities:
Net loss	Net loss	$	(95,941)	$	(99,242)	Net loss	$	(159,532)	$	(95,941)
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	Depreciation	60,062		65,267		Depreciation	52,319		60,062
Amortization of intangibles	Amortization of intangibles	3,483		3,705		Amortization of intangibles	3,479		3,483
Gain on sale of business, net		—		(696)

Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		Gain on sale of fixed assets, net	—		(33,391)
Impairment charges	Impairment charges	458		841		Impairment charges	654		458
Share-based compensation expense	Share-based compensation expense	1,625		3,002		Share-based compensation expense	2,705		1,625
Equity in losses of affiliates, net of dividends related to earnings	Equity in losses of affiliates, net of dividends related to earnings	7,804		1,032		Equity in losses of affiliates, net of dividends related to earnings	720		7,804

Loss on refinancing and extinguishment of debt						Loss on refinancing and extinguishment of debt	81,885		—
Payment-in-kind interest						Payment-in-kind interest	27,500		—
Deferred income taxes	Deferred income taxes	(5,096)		(21,709)		Deferred income taxes	20		(5,096)
Other	Other	1,178		1,192		Other	2,376		1,178
Changes in operating assets and liabilities	Changes in operating assets and liabilities	59,583		(14,126)		Changes in operating assets and liabilities	5,024		59,583
Net cash used in operating activities		(235)		(60,734)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	17,150		(235)
Investing activities:	Investing activities:					Investing activities:
Capital expenditures	Capital expenditures	(44,278)		(55,599)		Capital expenditures	(46,760)		(44,278)

Proceeds from sale of fixed assets	Proceeds from sale of fixed assets	52,633		3,000		Proceeds from sale of fixed assets	—		52,633
Other	Other	32		35		Other	1,638		32
Net cash provided by (used in) investing activities		8,387		(52,564)
Net cash (used in) provided by investing activities						Net cash (used in) provided by investing activities	(45,122)		8,387
Financing activities:	Financing activities:					Financing activities:

Proceeds from issuance of long-term debt, net of debt issuance costs						Proceeds from issuance of long-term debt, net of debt issuance costs	925,020		—
Repayment and refinancing of long-term debt						Repayment and refinancing of long-term debt	(927,046)		—
Principal payments on long-term debt	Principal payments on long-term debt	(2,536)		(2,895)		Principal payments on long-term debt	(949)		(2,536)
(Decrease) increase in short-term debt, net		(1,666)		14,811
Decrease in short-term debt, net						Decrease in short-term debt, net	(1,240)		(1,666)

Debt issuance costs and other fees						Debt issuance costs and other fees	(74,376)		—

Taxes withheld and paid on employees' share-based payment awards	Taxes withheld and paid on employees' share-based payment awards	(526)		(744)		Taxes withheld and paid on employees' share-based payment awards	(209)		(526)
Other	Other	651		532		Other	(238)		651
Net cash (used in) provided by financing activities		(4,077)		11,704
Net cash used in financing activities						Net cash used in financing activities	(79,038)		(4,077)
Effects of exchange rate changes on cash, cash equivalents and restricted cash	Effects of exchange rate changes on cash, cash equivalents and restricted cash	7,103		4,179		Effects of exchange rate changes on cash, cash equivalents and restricted cash	(4,565)		7,103
Changes in cash, cash equivalents and restricted cash	Changes in cash, cash equivalents and restricted cash	11,178		(97,415)		Changes in cash, cash equivalents and restricted cash	(111,575)		11,178

Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	251,128		443,578		Cash, cash equivalents and restricted cash at beginning of period	192,807		251,128
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	262,306	$	346,163	Cash, cash equivalents and restricted cash at end of period	$	81,232	$	262,306

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:						Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
		Balance as of					Balance as of
		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	250,458	$	248,010	Cash and cash equivalents	$	73,063	$	186,875
Restricted cash included in other current assets	Restricted cash included in other current assets	9,893		961		Restricted cash included in other current assets	6,550		4,650
Restricted cash included in other assets	Restricted cash included in other assets	1,955		2,157		Restricted cash included in other assets	1,619		1,282
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	262,306	$	251,128	Total cash, cash equivalents and restricted cash	$	81,232	$	192,807

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” or “Cooper Standard”), through its wholly-owned subsidiary, Cooper-Standard Automotive Inc. (“CSA U.S.”), is a leading manufacturer of sealing and fluid handling (consisting of fuel and brake delivery and fluid ~~transfer~~transfer) systems. 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 its subsidiaries.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Annual Report”), 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. The operating results for the interim period ended June 30, ~~2022~~2023 are not necessarily indicative of results for the full year. In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

Recently Adopted Accounting Pronouncements

The Company adopted the following Accounting Standard Update (“ASU”) during the six months ended June 30, 2023, which did not have a material impact on its condensed consolidated financial statements.

Standard

Description

Effective Date

ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations

Requires enhanced disclosures about a buyer’s use of supplier finance programs. Supplier finance programs may also be referred to as reverse factoring, payables finance, or structured payables arrangements.

January 1, 2023

2. Deconsolidation and ~~Divestiture~~Sale-Leaseback

2022 Joint Venture Deconsolidation

In the first quarter of 2022, a joint venture in the Asia Pacific region that was previously consolidated with a noncontrolling interest amended the governing document underlying the joint venture. The amendment to the agreement did not change the Company’s 51% ownership. However, as a result of the amendment and effective as of January 1, 2022, the joint venture was deconsolidated and accounted for as an investment under the equity method. The Company remeasured the retained investment using the income approach method and performed a discounted cash flow analysis of the projected free cash flows of the joint venture. As a result of the deconsolidation, during the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Company recorded a loss of $2,257, included in other income (expense), net in the condensed consolidated statements of operations. The deconsolidation included the removal of property, plant and equipment with gross carrying value of $29,590 and accumulated depreciation of $11,625, along with the removal of intangible assets (primarily land use rights) with a net carrying value of $5,258.

~~2020 Divestiture~~2022 Sale-Leaseback

In the ~~fourth~~first quarter of ~~2019, management approved~~2022, the Company signed a ~~plan to sell~~sale-leaseback agreement on one of its European ~~rubber fluid transfer~~facilities. The Company closed the transaction and ~~specialty sealing businesses, as well as its Indian operations. On July 1, 2020,~~received cash proceeds in the ~~Company completed~~amount of $50,008 during the ~~divestiture to Mutares SE & Co. KGaA (“Mutares”). During the three and~~ six months ended June 30, ~~2021,~~2022. The sale-leaseback became effective on April 1, 2022, and the Company recorded ~~subsequent adjustments resulting~~a gain on the sale transaction of $33,391 during the six months ended June 30, 2022.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in ~~a net gain of $891~~thousands except per share and ~~$696, respectively.~~share amounts)

3. Revenue

Revenue is recognized for manufactured parts at a point in time, generally when products are shipped or delivered. The Company usually enters into agreements with customers to produce products at the beginning of a vehicle’s life. Blanket purchase orders received from customers and related documents generally establish the annual terms, including pricing, related to a vehicle model. Customers typically pay for parts based on customary business practices with payment terms generally between 30 and 90 days.

Revenue by customer group for the three months ended June 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	359,797	$	171,368	$	111,046	$	33,511	$	—	$	675,722
Commercial	4,532		6,487		173		3		1,897		13,092
Other	4,481		42		3		—		30,400		34,926
Revenue	$	368,810	$	177,897	$	111,222	$	33,514	$	32,297	$	723,740

Revenue by customer group for the six months ended June 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	716,923	$	326,561	$	205,661	$	62,349	$	—	$	1,311,494
Commercial	8,637		13,009		343		6		3,679		25,674
Other	8,377		182		3		—		60,468		69,030
Revenue	$	733,937	$	339,752	$	206,007	$	62,355	$	64,147	$	1,406,198

Revenue by customer group for the three months ended June 30, 2022 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	323,532	$	120,693	$	85,338	$	26,256	$	—	$	555,819
Commercial	4,049		5,546		441		5		1,665		11,706
Other	4,106		48		—		—		34,238		38,392
Revenue	$	331,687	$	126,287	$	85,779	$	26,261	$	35,903	$	605,917

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

Revenue by customer group for the six months ended June 30, 2022 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	638,119	$	246,061	$	188,742	$	47,769	$	—	$	1,120,691
Commercial	7,723		11,469		788		11		3,322		23,313
Other	7,739		171		2		—		66,985		74,897
Revenue	$	653,581	$	257,701	$	189,532	$	47,780	$	70,307	$	1,218,901

~~Revenue by customer group for the three months ended June 30, 2021 was as follows:~~

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Passenger and Light Duty $ 240,111 $ 126,972 $ 102,950 $ 14,145 $ — $ 484,178
Commercial 3,405 5,471 965 8 1,445 11,294
Other 4,009 178 — — 33,526 37,713
Revenue $ 247,525 $ 132,621 $ 103,915 $ 14,153 $ 34,971 $ 533,185

~~Revenue by customer group for the six months ended June 30, 2021 was as follows:~~

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Passenger and Light Duty $ 571,724 $ 286,753 $ 215,991 $ 29,624 $ — $ 1,104,092
Commercial 7,686 11,352 2,147 15 2,696 23,896
Other 7,151 292 2 — 66,719 74,164
Revenue $ 586,561 $ 298,397 $ 218,140 $ 29,639 $ 69,415 $ 1,202,152

The passenger and light duty customer group consists of sales to automotive OEMs and automotive suppliers, while the commercial customer group represents sales to OEMs of on- and off-highway commercial equipment and vehicles. The other customer group includes sales related to specialty and adjacent markets.

Substantially all of the Company’s revenues were generated from sealing and fluid handling (consisting of fuel and brake delivery and fluid ~~transfer~~transfer) systems for use in passenger vehicles and light trucks manufactured by global OEMs.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

A summary of the Company’s products is as follows:


Product Line						Description
Sealing Systems						Protect vehicle interiors from weather, dust and noise intrusion for improved driving experience; provide aesthetic and functional class-A exterior surface treatment
Fuel &and Brake Delivery Systems						Sense, deliver and control fluids to fuel and brake systems
Fluid Transfer Systems						Sense, deliver and control fluids and vapors for optimal powertrain & HVAC operation

Revenue by product line for the three months ended June 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	138,153	$	141,656	$	69,881	$	24,913	$	—	$	374,603
Fluid handling:
Fuel and brake delivery systems	125,152		32,113		23,442		6,487		—		187,194
Fluid transfer systems	105,505		4,128		17,899		2,114		—		129,646
Total fluid handling	230,657		36,241		41,341		8,601		—		316,840
Other	—		—		—		—		32,297		32,297
Revenue	$	368,810	$	177,897	$	111,222	$	33,514	$	32,297	$	723,740

Revenue by product line for the six months ended June 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	276,274	$	272,631	$	129,280	$	47,553	$	—	$	725,738
Fluid handling:
Fuel and brake delivery systems	244,447		58,604		42,349		10,934		—		356,334
Fluid transfer systems	213,216		8,517		34,378		3,868		—		259,979
Total fluid handling	457,663		67,121		76,727		14,802		—		616,313
Other	—		—		—		—		64,147		64,147
Revenue	$	733,937	$	339,752	$	206,007	$	62,355	$	64,147	$	1,406,198

Revenue by product line for the three months ended June 30, 2022 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	127,345	$	101,951	$	49,874	$	19,235	$	—	$	298,405	Sealing systems	$	127,345	$	101,951	$	49,874	$	19,235	$	—	$	298,405
Fluid handling:														Fluid handling:
Fuel and brake delivery systems	Fuel and brake delivery systems	107,614		21,638		20,481		4,814		—		154,547		Fuel and brake delivery systems	107,614		21,638		20,481		4,814		—		154,547
Fluid transfer systems	Fluid transfer systems	96,728		2,698		15,424		2,212		—		117,062		Fluid transfer systems	96,728		2,698		15,424		2,212		—		117,062
Total fluid handling														Total fluid handling	204,342		24,336		35,905		7,026		—		271,609
Other	Other	—		—		—		—		35,903		35,903		Other	—		—		—		—		35,903		35,903
Revenue	Revenue	$	331,687	$	126,287	$	85,779	$	26,261	$	35,903	$	605,917	Revenue	$	331,687	$	126,287	$	85,779	$	26,261	$	35,903	$	605,917

910

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Revenue by product line for the six months ended June 30, 2022 was as follows:

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Sealing systems $ 254,897 $ 207,085 $ 112,910 $ 35,345 $ — $ 610,237
Fuel and brake delivery systems 210,335 44,676 44,228 8,375 — 307,614
Fluid transfer systems 188,349 5,940 32,394 4,060 — 230,743
Other — — — — 70,307 70,307
Revenue $ 653,581 $ 257,701 $ 189,532 $ 47,780 $ 70,307 $ 1,218,901

~~Revenue by product line for the three months ended June 30, 2021 was as follows:~~

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Sealing systems $ 90,174 $ 104,878 $ 62,328 $ 11,533 $ — $ 268,913
Fuel and brake delivery systems 82,389 23,991 25,166 2,148 — 133,694
Fluid transfer systems 74,962 3,752 16,421 472 — 95,607
Other — — — — 34,971 34,971
Revenue $ 247,525 $ 132,621 $ 103,915 $ 14,153 $ 34,971 $ 533,185

~~Revenue by product line for the six months ended June 30, 2021 was as follows:~~


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	211,349	$	234,239	$	132,001	$	22,807	$	—	$	600,396	Sealing systems	$	254,897	$	207,085	$	112,910	$	35,345	$	—	$	610,237
Fluid handling:														Fluid handling:
Fuel and brake delivery systems	Fuel and brake delivery systems	195,045		54,781		53,535		5,013		—		308,374		Fuel and brake delivery systems	210,335		44,676		44,228		8,375		—		307,614
Fluid transfer systems	Fluid transfer systems	180,167		9,377		32,604		1,819		—		223,967		Fluid transfer systems	188,349		5,940		32,394		4,060		—		230,743
Total fluid handling														Total fluid handling	398,684		50,616		76,622		12,435		—		538,357
Other	Other	—		—		—		—		69,415		69,415		Other	—		—		—		—		70,307		70,307
Revenue	Revenue	$	586,561	$	298,397	$	218,140	$	29,639	$	69,415	$	1,202,152	Revenue	$	653,581	$	257,701	$	189,532	$	47,780	$	70,307	$	1,218,901

Contract Estimates

The amount of revenue recognized is usually based on the purchase order price and adjusted for variable consideration, including pricing concessions. The Company accrues for pricing concessions by reducing revenue as products are shipped or delivered. The accruals are based on historical experience, anticipated performance and management’s best judgment. The Company also generally has ongoing adjustments to customer pricing arrangements based on the content and cost of its products. Such pricing accruals are adjusted as they are settled with customers. Customer returns, which are infrequent, are usually related to quality or shipment issues and are recorded as a reduction of revenue. The Company generally does not recognize significant return obligations due to their infrequent nature.

Contract Balances

The Company’s contract assets consist of unbilled amounts associated with variable pricing arrangements in the Asia Pacific region. Once pricing is finalized, contract assets are transferred to accounts receivable. As a result, the timing of revenue recognition and billings, as well as changes in foreign exchange rates, will impact contract assets on an ongoing basis. Contract assets were not materially impacted by any other factors during the six months ended June 30, ~~2022.~~2023.

The Company’s contract liabilities consist of advance payments received ~~and due~~ from customers. Net contract assets (liabilities) consisted of the following:

June 30, 2022 December 31, 2021 Change
Contract assets $ 3,454 $ — $ 3,454
Contract liabilities (14) (143) 129
Net contract assets (liabilities) $ 3,440 $ (143) $ 3,583

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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


	June 30, 2023		December 31, 2022		Change
Contract assets	$	582	$	530	$	52
Contract liabilities	(15)		(15)		—
Net contract assets (liabilities)	$	567	$	515	$	52

Other

The Company, at times, enters into agreements that provide for lump sum payments to customers. These payment agreements are recorded as a reduction of revenue during the period the commitment is ~~made.~~made, unless the payment is contractually recoverable. Amounts related to commitments of future payments to customers onin the condensed consolidated balance sheets as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were current liabilities of ~~$12,236~~$11,089 and ~~$12,045,~~$9,325, respectively, and long-term liabilities of ~~$6,485~~$4,656 and ~~$7,214,~~$5,899, respectively.

The Company provides assurance-type warranties to its customers. Such warranties provide customers with assurance that the related product will function as intended and complies with any agreed-upon specifications, and are recognized in costs of products sold.

4. Restructuring

On an ongoing basis, the Company evaluates its business and objectives to ensure that it is properly configured and sized based on changing market conditions. Accordingly, the Company has implemented several restructuring initiatives, including closure or consolidation of facilities throughout the world and the reorganization of its operating structure.

The Company’s restructuring charges consist of severance, retention and outplacement services, and severance-related postemployment benefits (collectively, “employee separation costs”), along with other related exit costs and asset impairments related to restructuring activities (collectively, “other exit costs”). Employee separation costs are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy.

~~Restructuring expense by segment for the three and six months ended June 30, 2022 and 2021 was as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
North America $ 353 $ 843 $ (86) $ 3,206
Europe 1,704 9,774 10,135 26,171
Asia Pacific 1,152 614 999 983
South America 69 400 105 1,987
Total Automotive 3,278 11,631 11,153 32,347
Corporate and other 204 — 160 331
Total $ 3,482 $ 11,631 $ 11,313 $ 32,678

~~Restructuring activity for the six months ended June 30, 2022 was as follows:~~

Employee Separation Costs Other Exit Costs Total
Balance as of December 31, 2021 $ 20,957 $ 5,627 $ 26,584
Expense 7,150 4,163 11,313
Cash payments (11,039) (1,409) (12,448)
Foreign exchange translation and other (1,298) 67 (1,231)
Balance as of June 30, 2022 $ 15,770 $ 8,448 $ 24,218

~~Other exit costs for the six months ended June 30, 2022 included an immaterial gain on sale of fixed assets related to a closed facility in the Asia Pacific region.~~

~~5. Inventories~~

~~Inventories consist of the following:~~

June 30, 2022 December 31, 2021
Finished goods $ 50,188 $ 43,186
Work in process 44,301 37,045
Raw materials and supplies 89,079 77,844
$ 183,568 $ 158,075

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

~~6. Leases~~

The Company primarily has operating and finance leases for certain manufacturing facilities, corporate offices and certain equipment. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, net, debt payable within one year, and long-term debt on the Company’s condensed consolidated balance sheets.

~~The components of lease expense were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Operating lease expense $ 7,238 $ 8,087 $ 14,624 $ 15,431
Short-term lease expense 1,234 1,965 2,145 3,605
Variable lease expense 178 181 466 429
Finance lease expense:
Amortization of right-of-use assets 485 521 977 1,067
Interest on lease liabilities 330 372 662 738
Total lease expense $ 9,465 $ 11,126 $ 18,874 $ 21,270

~~Other information related to leases was as follows:~~

Six Months Ended June 30,
2022 2021
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows for operating leases $ 15,037 $ 16,953
     Operating cash flows for finance leases 668 734
     Financing cash flows for finance leases 1,038 1,195
Non-cash right-of-use assets obtained in exchange for lease obligations:
     Operating leases 9,958 7,355
     Finance leases 113 572
Weighted Average Remaining Lease Term (in years)
Operating leases 7.4 7.7
Finance leases 9.3 10.1
Weighted Average Discount Rate
Operating leases 6.0 % 5.5 %
Finance leases 5.9 % 5.8 %

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~Future minimum lease payments under non-cancellable leases as of June 30, 2022 were as follows:~~

Year Operating Leases Finance
Leases
Remainder of 2022 $ 13,593 $ 1,542
2023 24,820 3,118
2024 18,858 3,348
2025 15,322 3,396
2026 11,214 3,137
Thereafter 49,149 17,025
Total future minimum lease payments 132,956 31,566
Less imputed interest (26,839) (7,663)
Total $ 106,117 $ 23,903

~~Amounts recognized on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 were as follows:~~

June 30, 2022 December 31, 2021
Operating Leases
Operating lease right-of-use assets, net $ 102,407 $ 111,052
Current operating lease liabilities 21,177 22,552
Long-term operating lease liabilities 84,940 92,760
Finance Leases
Debt payable within one year 2,134 2,153
Long-term debt 21,769 23,590

As of June 30, 2022 and December 31, 2021, assets recorded under finance leases, net of accumulated depreciation were $23,513 and $25,690, respectively. As of June 30, 2022, the Company had one real estate lease that had not yet commenced with undiscounted lease payments of approximately $423.

~~7. Property, Plant and Equipment~~

~~Property, plant and equipment consists of the following:~~

June 30, 2022 December 31, 2021
Land and improvements $ 42,608 $ 44,495
Buildings and improvements 263,685 285,240
Machinery and equipment 1,231,726 1,269,330
Construction in progress 71,884 80,868
1,609,903 1,679,933
Accumulated depreciation (907,396) (895,585)
Property, plant and equipment, net $ 702,507 $ 784,348

~~During~~Restructuring charges by segment for the three and six months ended June 30, 2023 and 2022 ~~the Company recorded impairment charges of $3 and $458, respectively, primarily due to idle assets in Europe. The fair value~~ was ~~determined using salvage value. During~~as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
North America	$	5,170	$	353	$	5,379	$	(86)
Europe	3,265		1,704		5,050		10,135
Asia Pacific	1		1,152		320		999
South America	24		69		46		105
Total Automotive	8,460		3,278		10,795		11,153
Corporate and other	39		204		83		160
Total	$	8,499	$	3,482	$	10,878	$	11,313

Restructuring activity for the ~~three and~~ six months ended June 30, ~~2021, the Company recorded impairment charges of $841 each period due to idle assets, primarily in a certain Europe location. The fair value~~2023 was ~~determined using salvage value.~~as follows:

The deconsolidation of a joint venture during the three months ended March 31, 2022 included the removal of property, plant and equipment with gross carrying value of $29,590 and accumulated depreciation of $11,625, which is reflected in the balance sheet as of June 30, 2022.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

In the first quarter of 2022, the Company closed on a sale-leaseback transaction related to one of its European facilities. The sale-leaseback was effective and control transferred to the Company on April 1, 2022. During the three months ended June 30, 2022, the Company recorded a gain on the sale transaction of $33,391. The transaction included the removal of property, plant and equipment with a gross carrying value of $16,890 and accumulated depreciation of $4,013, which is reflected in the balance sheet as of June 30, 2022.


	Employee Separation Costs		Other Exit Costs		Total
Balance as of December 31, 2022	$	13,185	$	6,383	$	19,568
Expense	9,819		1,059		10,878
Cash payments	(4,206)		(2,155)		(6,361)

Foreign exchange translation and other	227		56		283
Balance as of June 30, 2023	$	19,025	$	5,343	$	24,368

8.5. Inventories

Inventories consist of the following:


	June 30, 2023		December 31, 2022
Finished goods	$	46,912	$	39,202
Work in process	45,087		40,521
Raw materials and supplies	81,000		78,033
	$	172,999	$	157,756

6. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reporting unit for the six months ended June 30, ~~2022~~2023 were as follows:

North America Industrial Specialty Group Total
Balance as of December 31, 2021 $ 128,246 $ 14,036 $ 142,282
Foreign exchange translation (69) — (69)
Balance as of June 30, 2022 $ 128,177 $ 14,036 $ 142,213


	North America		Industrial Specialty Group		Total
Balance as of December 31, 2022	$	127,987	$	14,036	$	142,023


Foreign exchange translation	91		—		91
Balance as of June 30, 2023	$	128,078	$	14,036	$	142,114

Goodwill is tested for impairment by reporting unit annually or more frequently if events or circumstances indicate that an impairment may exist. There were no indicators of potential impairment during the six months ended June 30, ~~2022.~~

~~Intangible Assets~~

~~Intangible assets and accumulated amortization balances as of June 30, 2022 and December 31, 2021 were as follows:~~

Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Customer relationships $ 152,827 $ (127,439) $ 25,388
Other 38,699 (13,072) 25,627
Balance as of June 30, 2022 $ 191,526 $ (140,511) $ 51,015
Customer relationships $ 154,767 $ (126,626) $ 28,141
Other 44,955 (12,721) 32,234
Balance as of December 31, 2021 $ 199,722 $ (139,347) $ 60,375

The deconsolidation of a joint venture during the three months ended March 31, 2022 included the removal of intangible assets (primarily land use rights) with net carrying value of $5,258, which is reflected in the table above as of June 30, 2022.2023.

1412

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

9.Intangible Assets

Intangible assets and accumulated amortization balances as of June 30, 2023 and December 31, 2022 were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	152,220	$	(131,373)	$	20,847
Other	37,829		(14,974)		22,855
Balance as of June 30, 2023	$	190,049	$	(146,347)	$	43,702

Customer relationships	$	152,578	$	(129,317)	$	23,261
Other	38,479		(14,099)		24,380
Balance as of December 31, 2022	$	191,057	$	(143,416)	$	47,641

7. Debt and Other Financing

A summary of outstanding debt as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 is as follows:


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Senior Notes		$	396,901	$	396,544
Senior Secured Notes		242,981		241,683
First Lien Notes						First Lien Notes	$	581,353	$	—
Third Lien Notes						Third Lien Notes	367,930		—
2026 Senior Notes						2026 Senior Notes	42,300		397,259
2024 Senior Secured Notes						2024 Senior Secured Notes	—		244,471
Term Loan	Term Loan	319,999		321,212		Term Loan	—		318,787

Finance leases	Finance leases	23,903		25,743		Finance leases	23,135		23,765
Other borrowings	Other borrowings	46,459		51,533		Other borrowings	47,384		51,902
Total debt	Total debt	1,030,243		1,036,715		Total debt	1,062,102		1,036,184
Less current portion		(51,016)		(56,111)
Less: current portion						Less: current portion	(49,813)		(54,130)
Total long-term debt	Total long-term debt	$	979,227	$	980,604	Total long-term debt	$	1,012,289	$	982,054

~~5.625% Senior Notes due 2026~~Refinancing Transactions

~~In November 2016,~~On January 27, 2023 (the “Settlement Date”), the Company, ~~issued $400,000~~Cooper-Standard Automotive Inc. (the “Issuer”), a wholly-owned subsidiary of the Company, and certain other of the Company’s direct and indirect subsidiaries completed certain refinancing transactions (the “Refinancing Transactions”) consisting of: (i) the exchange (the “Exchange Offer”) of $357,446 aggregate principal amount of ~~its~~the Issuer’s then existing 5.625% Senior Notes due 2026 (the ~~“Senior~~“2026 Senior Notes”) (representing 89.36% of the aggregate principal amount outstanding of the 2026 Senior Notes) for $357,446 aggregate principal amount of the Issuer’s newly issued 5.625% Cash Pay / 10.625% PIK Toggle Senior Secured Third Lien Notes due 2027 (the “Third Lien Notes”), (ii) the issuance by the Issuer (the “Concurrent Notes Offering”) of $580,000 aggregate principal amount of 13.50% Cash Pay / PIK Toggle Senior Secured First Lien Notes due 2027 (the “First Lien Notes” and, together with the Third Lien Notes, the “New Notes”) to holders of 2026 Senior Notes or their designees who participated in the Exchange Offer, including to certain backstop commitment parties who committed to purchase the First Lien Notes not otherwise subscribed for, (iii) the related consent solicitation (the “Consent Solicitation”) to remove substantially all of the covenants, certain events of default and certain other provisions contained in the 2026 Senior Notes and the indenture governing the 2026 Senior Notes and to release and discharge the guarantee of the 2026 Senior Notes by the Company, (iv) the effectiveness of the Third Amendment (as defined below) to the senior asset-based revolving credit facility (“ABL Facility”) and (v) the use of proceeds from the Concurrent Notes Offering, together with cash on hand, to prepay all amounts outstanding under the Term Loan Facility at par, plus any accrued and unpaid interest thereon, to redeem the Issuer’s existing 2024 Senior Secured Notes (as defined below), including the prepayment premium and any accrued and unpaid interest thereon, and to pay fees and expenses related to the Refinancing Transactions. As a result of the Refinancing Transactions, the Issuer extended the maturities of its indebtedness and reduced the amount of cash interest it is required to pay on such indebtedness for the next two years. The Company recognized a loss on the refinancing and extinguishment of debt of $81,885 during the six months ended June 30, 2023. Additionally, the Company incurred total fees of $91,800 associated with the Refinancing Transactions, of which $86,841 were

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

paid during the six months ended June 30, 2023, $4,237 were paid during 2022 and $722 are recorded in accounts payable in the condensed consolidated balance sheet as of June 30, 2023 and will be paid in future periods. The fees paid during the six months ended June 30, 2023 are reflected as a financing outflow in the condensed consolidated statement of cash flows. Of the fees paid during the six months ended June 30, 2023, $73,376 was included in the loss on the refinancing and extinguishment of debt referenced above, $12,465 is presented as a direct deduction from the principal balance in the condensed consolidated balance sheet, and $1,000 related to amending the ABL Facility is recorded in other long-term assets in the condensed consolidated balance sheet.

New Notes

On the Settlement Date, the Issuer issued $580,000 aggregate principal amount of First Lien Notes pursuant to an indenture, dated as of the Settlement Date (the “First Lien Notes Indenture”), by and among the Issuer, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “First Lien Collateral Agent”).

The First Lien Notes are senior secured obligations of the Issuer and are guaranteed by CS Intermediate Holdco 1 LLC (“Holdings”), each of the Issuer’s wholly owned domestic subsidiaries that guarantee certain other indebtedness, subject to certain exceptions (the “Domestic Guarantors”), and certain of the Issuer’s wholly owned subsidiaries organized in Costa Rica, France, Mexico, the Netherlands and Romania (the “Foreign Guarantors”). The ~~Senior~~First Lien Notes are guaranteed by Holdings and the Domestic Guarantors on a senior secured basis and by the Foreign Guarantors on a senior unsecured basis. The guarantees of the subsidiaries organized in France are limited guarantees.

The First Lien Notes will mature on ~~November 15, 2026.~~March 31, 2027. The First Lien Notes bear interest at the rate of 13.50% per annum, payable in cash; provided, however, that for the first four interest periods after the Settlement Date, the Issuer has the option, in its sole discretion, to pay up to 4.50% of such interest on the First Lien Notes, in such amount as specified by the Issuer, by increasing the principal amount of the outstanding First Lien Notes or, in limited circumstances as described in the First Lien Notes Indenture, by issuing additional First Lien Notes. As of June 30, 2023, the aggregate principal amount of the First Lien Notes of $581,353 recognized in the condensed consolidated balance sheet reflects the election that was made by the Company to pay 4.50% of the first interest payment as payment-in-kind. The Company has also elected to pay 4.50% of the second interest payment as payment-in-kind. Interest on the ~~Senior~~First Lien Notes is payable semi-annually in arrears ~~in cash~~ on ~~May~~June 15 and ~~November~~December 15 of each ~~year.~~year, and commenced on June 15, 2023.

~~Debt issuance costs related to the Senior Notes are amortized into interest expense over the term~~The Issuer may, at its option, redeem all or part of the ~~Senior Notes.~~ First Lien Notes prior to maturity at the prices set forth in the First Lien Notes Indenture. Upon the occurrence of certain events constituting a Change of Control (as defined in the First Lien Notes Indenture), the Issuer will be required to make an offer to repurchase all of the First Lien Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

As of June 30, ~~2022 and December 31, 2021,~~2023, the Company had ~~$3,099 and $3,456~~$9,443 of unamortized debt issuance costs ~~respectively,~~and $388 of unamortized original issue discount related to the ~~Senior~~First Lien Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance ~~sheets.~~

~~13.0% Senior Secured Notes due 2024~~

In May 2020, the Company issued $250,000 aggregate principal amount of its 13.0% Senior Secured Notes due 2024 (the “Senior Secured Notes”). The Senior Secured Notes mature on June 1, 2024. Interest on the Senior Secured Notes is payable semi-annually in arrears in cash on June 1 and December 1 of each year. The Company may redeem all or part of the Senior Secured Notes prior to maturity at the prices (inclusive of any applicable premium) set forth in the indenture.

The Company paid approximately $6,431 of debt issuance costs in connection with the transaction. Additionally, the Senior Secured Notes were issued at a discount of $5,000. As of June 30, 2022 and December 31, 2021, the Company had $3,856 and $4,594 of unamortized debt issuance costs, respectively, and $3,163 and $3,723 of unamortized original issue discount, respectively, related to the Senior Secured Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets.sheet. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the First Lien Notes.

The First Lien Notes Indenture contains certain customary covenants that limit the Issuer’s and its restricted subsidiaries’ ability to, among other things, incur or guarantee additional indebtedness or issue certain preferred stock; incur liens on assets; pay dividends or make other distributions in respect of, or repurchase or redeem, its capital stock or make other restricted payments; prepay, redeem or repurchase certain debt; make certain loans and investments; enter into agreements restricting certain subsidiaries’ ability to pay dividends; enter into transactions with affiliates; and sell certain assets or merge or consolidate with or into other companies. These covenants are subject to a number of important limitations and exceptions. The First Lien Notes Indenture also provides for customary events of default, which, if any occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all of the then outstanding First Lien Notes to be due and payable immediately.

On the Settlement Date, the Issuer issued $357,446 aggregate principal amount of Third Lien Notes pursuant to an indenture, dated as of the Settlement Date (the “Third Lien Notes Indenture”), by and among the Issuer, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “Third Lien Collateral Agent”).

The Third Lien Notes are senior secured obligations of the Issuer and are guaranteed by Holdings, each of the Domestic Guarantors, and each of the Foreign Guarantors. The Third Lien Notes are guaranteed by Holdings and the Domestic Guarantors on a senior secured basis and by the Foreign Guarantors on a senior unsecured basis. The guarantees of the subsidiaries organized in France are limited guarantees.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

its sole discretion, to instead pay such interest at 10.625% per annum either by increasing the principal amount of the outstanding Third Lien Notes or, in limited circumstances as described the Third Lien Notes Indenture, by issuing additional Third Lien Notes. As of June 30, 2023, the aggregate principal amount of the Third Lien Notes of $367,930 recognized in the condensed consolidated balance sheet reflects the election that was made by the Company to fully pay the first interest payment on the Third Lien Notes as payment-in-kind. The Company has also elected to pay the second interest payment as payment-in-kind. Interest on the Third Lien Notes is payable semi-annually in arrears on June 15 and December 15 of each year, and commenced on June 15, 2023.

The Issuer may, at its option, redeem all or part of the Third Lien Notes prior to maturity at the prices set forth in the Third Lien Notes Indenture. Upon the occurrence of certain events constituting a Change of Control (as defined in the Third Lien Notes Indenture), the Issuer will be required to make an offer to repurchase all of the Third Lien Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

Debt issuance costs related to the Third Lien Notes are amortized into interest expense over the term of the Third Lien Notes. As of June 30, 2023, the Company had $5,831 of unamortized debt issuance costs related to the Third Lien Notes, which are presented as a direct deduction from the principal balance in the condensed consolidated balance sheet.

The Third Lien Notes Indenture contains certain customary covenants that limit the Issuer’s and its restricted subsidiaries’ ability to, among other things, incur or guarantee additional indebtedness or issue certain preferred stock; incur liens on assets; pay dividends or make other distributions in respect of, or repurchase or redeem, its capital stock or make other restricted payments; prepay, redeem or repurchase certain debt; make certain loans and investments; enter into agreements restricting certain subsidiaries’ ability to pay dividends; enter into transactions with affiliates; and sell certain assets or merge or consolidate with or into other companies. These covenants are subject to a number of important limitations and exceptions. The Third Lien Notes Indenture also provides for customary events of default, which, if any occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all of the then outstanding Third Lien Notes to be due and payable immediately.

In connection with the issuance of the New Notes, the First Lien Collateral Agent, the Third Lien Collateral Agent, the collateral agent under the ABL Facility, the Issuer, Holdings and the several other parties named therein entered into the First Lien and Third Lien Intercreditor Agreement, providing for the relative priorities of their respective security interests in the assets securing the First Lien Notes, the Third Lien Notes and the ABL Facility, and certain other matters relating to the administration of security interests.

2026 Senior Notes

On November 2, 2016, the Issuer issued $400,000 aggregate principal amount of 2026 Senior Notes. On the Settlement Date, in connection with the Refinancing Transactions, the Issuer completed the Exchange Offer and delivered $357,446 aggregate principal amount of the exchanged 2026 Senior Notes to the trustee for cancellation. Following the completion of the Exchange Offer, $42,554 aggregate principal amount of the 2026 Senior Notes remain outstanding.

Following receipt of the requisite consents in the Consent Solicitation, on January 20, 2023, the Issuer, the guarantors named therein and U.S. Bank Trust Company, National Association (successor in interest to U.S. Bank National Association), as trustee, entered into a supplemental indenture to the indenture governing the 2026 Senior Notes, which became effective on the Settlement Date. The supplemental indenture provides for the elimination of substantially all of the covenants, certain events of default and certain other provisions contained in the 2026 Senior Notes and the indenture governing the 2026 Senior Notes and released and discharged the guarantee of the 2026 Senior Notes by the Company.

The 2026 Senior Notes are guaranteed by each of the Issuer’s wholly-owned existing or subsequently organized U.S. subsidiaries, subject to certain exceptions, to the extent such subsidiary guarantees the ABL Facility. The Issuer may, at its option, redeem all or part of the 2026 Senior Notes at various points in time prior to maturity, as described in the indenture governing the 2026 Senior Notes. The 2026 Senior Notes will mature on November 15, 2026. Interest on the 2026 Senior Notes is payable semi-annually in arrears in cash on May 15 and November 15 of each year.

The Company paid approximately $7,055 of debt issuance costs in connection with the issuance of the 2026 Senior Notes. The debt issuance costs are being amortized into interest expense over the term of the 2026 Senior Notes. As of June 30, 2023 and December 31, 2022, the Company had $254 and $2,741 of unamortized debt issuance costs related to the 2026 Senior Notes, which is presented as a direct deduction from the principal balance in the condensed consolidated balance sheets.

2024 Senior Secured Notes

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

on June 1, 2024. Interest on the 2024 Senior Secured Notes was payable semi-annually in arrears in cash on June 1 and December 1 of each year. In the first quarter of 2023, in connection with the Refinancing Transactions, the Issuer redeemed all of the outstanding 2024 Senior Secured Notes on the Settlement Date at the redemption price of 106.500% of the principal amount thereof, plus accrued and unpaid interest thereon.

The Company paid approximately $6,431 of debt issuance costs in connection with the issuance of the 2024 Senior Secured Notes. Additionally, the 2024 Senior Secured Notes were issued at a discount of $5,000. As of December 31, 2022, the Company had $3,021 of unamortized debt issuance costs and $2,508 of unamortized original issue discount related to the 2024 Senior Secured Notes, which were presented as direct deductions from the principal balance in the condensed consolidated balance sheet. Both the debt issuance costs and the original issue discount were amortized into interest expense over the term of the 2024 Senior Secured Notes.

ABL Facility

On November 2, 2016, Holdings, Cooper-Standard Automotive Inc. (the “U.S. Borrower”), Cooper-Standard Automotive Canada Limited (the “Canadian Borrower”), Cooper-Standard Automotive International Holdings B.V. (the “Dutch Borrower”, and, together with the U.S. Borrower and the Canadian Borrower, the “Borrowers”) and certain subsidiaries of the U.S. Borrower, entered into a third amendment and restatement of the ABL Facility. In March 2020, the Borrowers entered into Amendment No. 1 to the Third Amended and Restated Loan Agreement (“the First Amendment”). As a result of the First Amendment, the ABL Facility maturity was extended to March 2025 and the aggregate revolving loan commitment was reduced to $180.0 million. In May 2020, the Borrowers entered into Amendment No. 2 to the Third Amended and Restated Loan Agreement (the “Second Amendment”), which Second Amendment modified certain covenants under the ABL Facility. In December 2022, the Borrowers entered into Amendment No. 3 to the Third Amended and Restated Loan Agreement (the “Third Amendment”), which became effective on the Settlement Date. The Third Amendment provides for the ABL Facility to be amended to:

•permit the U.S. Borrower to issue the New Notes in the Concurrent Notes Offering and Exchange Offer, including the granting of liens, subject to the restrictions set forth in the ABL Facility;

•provide for certain of the U.S. Borrower’s wholly-owned subsidiaries organized in Costa Rica, France, Mexico, the Netherlands, Romania and certain other jurisdictions specified from time to time to become guarantors under the ABL Facility;

•authorize the collateral agent under the ABL Facility to enter into an intercreditor agreement with the collateral trustees for the New Notes; and

•remove the Dutch Borrower as a borrower under the ABL Facility.

The aggregate revolving loan availability includes a $100,000 letter of credit sub-facility and a $25,000 swing line sub-facility. The ABL Facility also provides for an uncommitted $100,000 incremental loan facility, for a potential total ABL Facility of $280,000 (if requested by the Borrowers and the 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. The Company’s borrowing base as of June 30, 2023 was $180,000. Net the greater of 10% of the borrowing base or $15,000 that cannot be borrowed without triggering the fixed charge coverage ratio maintenance covenant and $5,475 of outstanding letters of credit, the Company effectively had $156,525 available for borrowing under its ABL Facility.

As of June 30, 2023, there were no borrowings under the ABL Facility.

Maturity. Any borrowings under our ABL Facility will mature, and the commitments of the lenders under our ABL Facility will terminate, on March 24, 2025.

Borrowing Base. As of the Settlement Date, the loan and letter of credit availability under the ABL Facility is subject to a borrowing base, which at any time is limited to the lesser of: (A) the maximum facility amount (subject to certain adjustments) and (B) (i) up to 85% of eligible accounts receivable; plus (ii) the lesser of 70% of eligible inventory or 85% of the appraised net orderly liquidation value of eligible inventory; plus (iii) up to the lesser of $30,000 and 85% of eligible tooling accounts receivable; minus reserves established by the Agent. The accounts receivable portion of the borrowing base is subject to certain formulaic limitations (including concentration limits). The inventory portion of the borrowing base is limited to eligible inventory, as determined by the Agent. The borrowing base is also subject to certain reserves, which are established by the Agent (which may include changes to the advance rates indicated above). Loan availability under the ABL Facility is apportioned as follows: $160,000 to the U.S. Borrower and $20,000 to the Canadian Borrower.

Guarantees; Security. The obligations of the U.S. Borrower and the Canadian Borrower under the ABL Facility, as well as certain cash management arrangements and interest rate, foreign currency or commodity swaps entered into by the such Borrowers and their subsidiaries, and certain credit lines entered into by non-U.S. subsidiaries, in each case with the lenders and their affiliates (collectively, “Additional ABL Secured Obligations”) are guaranteed on a senior secured basis by Holdings and

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

its U.S. subsidiaries (with certain exceptions) and certain wholly-owned subsidiaries organized in Costa Rica, France, Mexico, the Netherlands, Romania and certain other jurisdictions specified from time to time, and the obligations of the Canadian Borrower under the ABL Facility and Additional ABL Secured Obligations of the Canadian Borrower and its Canadian subsidiaries are, in addition, guaranteed on a senior secured basis by the Canadian subsidiaries of the Canadian Borrower. The obligations under the ABL Facility and related guarantees are secured by (1) a first priority lien on all of each Borrower’s and each U.S. and Canadian guarantor’s existing and future personal property consisting of certain accounts receivable, inventory, documents, instruments, chattel paper, deposit accounts and securities accounts and certain related assets and proceeds of the foregoing, with various enumerated exceptions, including that: (i) the collateral owned by Canadian Borrower or any of its Canadian subsidiaries that are Guarantors only secure the obligations of Canadian Borrower and such subsidiaries arising under the ABL Facility and Additional ABL Secured Obligations (ii) no liens have been granted on any assets or properties of any non-U.S. subsidiaries of the Company (other than the Canadian Borrower and Canadian Guarantors, as otherwise specified above) in connection with the ABL Facility, (2) a second priority lien on all the capital stock in restricted subsidiaries directly held by the U.S. Borrower and each of the U.S. guarantors, and equipment of the U.S. Borrower and the U.S.-domiciled guarantors and all other material personal property of the U.S. Borrower and the U.S.-domiciled guarantors and (3) a 65% pledge of the equity interest in the first-tier foreign subsidiaries of the U.S. Guarantors.

Interest. Borrowings under the ABL Facility bear interest at a rate equal to, at the Borrowers’ option:

•in the case of borrowings by the U.S. Borrower, the forward-looking secured overnight funding rate for the applicable interest period (“Term SOFR”) (including a credit spread adjustment of 0.11448% or 0.26161%, depending on the applicable interest period) or the base rate plus, in each case, an applicable margin; or

•in the case of borrowings by the Canadian Borrower, bankers’ acceptance (“BA”) rate, Canadian prime rate or Canadian base rate plus, in each case, an applicable margin.

The applicable margin may vary between 2.00% and 2.50% with respect to the Term SOFR or Canadian BA rate-based borrowings and between 1.00% and 1.50% with respect to U.S. base rate, Canadian prime rate and Canadian base rate borrowings. The applicable margin is subject, in each case, to quarterly pricing adjustments (based on average facility availability).

Fees. The Borrowers are required to pay a fee in respect of committed but unutilized commitments. The ABL Facility also requires the payment of customary agency and administrative fees.

Voluntary Prepayments. The Borrowers are able to voluntarily reduce the unutilized portion of the commitment amount and repay outstanding loans, in each case, in whole or in part, at any time without premium or penalty (other than customary breakage and related reemployment costs with respect to repayments of SOFR-based borrowings).

Covenants; Events of Default. The ABL Facility includes affirmative and negative covenants that will impose substantial restrictions on the Company’s financial and business operations, including its ability to incur and secure debt, make investments, sell assets, pay dividends or make acquisitions. The ABL Facility also includes a requirement to maintain a monthly fixed charge coverage ratio of no less than 1.0 to 1.0 when availability under the ABL Facility is less than specified levels. The ABL Facility also contains various events of default that are customary for comparable facilities.

Debt Issuance Costs. As of June 30, 2023 and December 31, 2022, the Company had $1,232 and $535, respectively, of unamortized debt issuance costs related to the ABL Facility recorded in other long-term assets in the condensed consolidated balance sheets.

Term Loan Facility

InOn November 2, 2016, ~~the Company~~Cooper-Standard Automotive Inc., as borrower, entered into Amendment No. 1 to its senior term loan facility ~~(“Term~~(the “Term Loan Facility”), which ~~provides~~provided for loans in an aggregate principal amount of $340,000. Subject to certain conditions, the Term Loan Facility, without the consent of the then-existing lenders (but subject to the receipt of commitments), could have been expanded (or a new term loan or revolving facility added) by an amount that would not cause the consolidated secured net debt ratio to exceed 2.25 to 1.00 plus $400,000 plus any voluntary prepayments (including revolving facility and ABL Facility to the extent commitments are reduced) not funded from proceeds of long-term indebtedness.

On May 2, 2017, the Company entered into Amendment No. 2 to the Term Loan Facility to modify the interest rate. Subsequently, on March 6, 2018, the Company entered into Amendment No. 3 to the Term Loan Facility to further modify the interest rate. In accordance with this amendment, borrowings under the Term Loan Facility ~~bear~~bore interest, at the Company’s option, at either (1) with respect to Eurodollar rate loans, the greater of the applicable Eurodollar rate and 0.75% plus ~~2.0%~~2.00% per annum, or (2) with respect to base rate loans, the base rate, (which is the highest of the then current federal funds rate plus ~~0.5%~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

0.50%, the prime rate most recently announced by the administrative agent under the term loan, and the one-month Eurodollar rate plus 1.0%) plus 1.0% per annum.

Maturity. The Term Loan Facility ~~matures~~would have matured on November 2, ~~2023, unless earlier~~2023.

Voluntary Prepayments. In connection with the Refinancing Transactions, Cooper-Standard Automotive Inc. repaid the Term Loan Facility in full on the Settlement Date and the Term Loan Facility was terminated.

Debt Issuance Costs.As of ~~June 30, 2022 and~~ December 31, ~~2021,~~2022, the Company had ~~$791 and $1,087~~$494 of unamortized debt issuance costs ~~respectively,~~ and ~~$509 and $701~~$319 of unamortized original issue discount ~~respectively,~~ related to the Term Loan ~~Facility, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets.~~Facility. Both the debt issuance costs and the original issue discount ~~are~~were amortized into interest expense over the term of the Term Loan Facility.

Debt Covenants

The Company was in compliance with all applicable covenants of the New Notes, the 2026 Senior Notes, and ABL Facility as of June 30, 2023.

~~In November 2016,~~Other Financing

Finance leases and other. Other borrowings as of June 30, 2023 and December 31, 2022 reflect finance leases and other borrowings under local bank lines classified in debt payable within one year in the condensed consolidated balance sheets.

Receivable factoring. As a part of its working capital management, the Company sells certain receivables through a single third-party financial institution (the “Factor”) in a pan-European program. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company. These are permitted transactions under the Company’s credit agreements governing the ABL Facility and the indentures governing the New Notes and 2026 Secured Notes. The European factoring facility allows the Company to factor up to €60 million of its Euro-denominated accounts receivable, accelerating access to cash and reducing credit risk. The factoring facility expires in December 2023.

Costs incurred on the sale of receivables are recorded in other expense, net in the condensed consolidated statements of operations. The sale of receivables under this contract is considered an off-balance sheet arrangement to the Company and is accounted for as a true sale and is excluded from accounts receivable in the condensed consolidated balance sheets. Amounts outstanding under receivable transfer agreements entered into a Third Amended and Restated Loan Agreement of its ABL Facility, which provided an aggregate revolving loan availability of up to $210,000, subject to borrowing base availability. In March 2020, the Company entered into the First Amendmentby various locations as of the ~~Third Amended~~period end were as follows:


	June 30, 2023		December 31, 2022
Off-balance sheet arrangements	$	57,465	$	52,491

Accounts receivable factored and ~~Restated Loan Agreement (“~~related costs throughout the ~~Amendment”).~~ period were as follows:


	Off-Balance Sheet Arrangements
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Accounts receivable factored	$	114,260	$	90,332	$	217,305	$	172,882
Costs	636		114		1,073		239

As ~~a result~~of June 30, 2023 and December 31, 2022, cash collections on behalf of the ~~Amendment,~~Factor that have yet to be remitted were $5,646 and $3,772, respectively, and are reflected in other current assets as restricted cash in the ~~senior asset-based revolving credit facility (“ABL Facility”) maturity was extended to March~~condensed consolidated balance sheets.

1518

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

2025 and the aggregate revolving loan availability was reduced to $180,000. The aggregate revolving loan availability includes a $100,000 letter of credit sub-facility and a $25,000 swing line sub-facility. The ABL Facility also provides for an uncommitted $100,000 incremental loan facility, for a potential total ABL Facility of $280,000, if requested by the borrowers under the ABL Facility and the lenders agree to fund such increase. No consent of any lender is required to effect any such increase, except for those participating in the increase.

As of June 30, 2022, there were no loans outstanding under the ABL Facility. The Company’s borrowing base was $180,000. Net of the greater of 10% of the borrowing base or $15,000 that cannot be borrowed without triggering the fixed charge coverage ratio maintenance covenant and $5,753 of outstanding letters of credit, the Company effectively had $156,247 available for borrowing under its ABL facility.

Any borrowings under the ABL Facility will mature, and the commitments of the lenders under the ABL Facility will terminate, on the earlier of March 24, 2025 or the date 91 days prior to the maturity date of the Term Loan Facility (or another fixed asset facility replacing the Term Loan Facility).

As of June 30, 2022 and December 31, 2021, the Company had $659 and $782, respectively, of unamortized debt issuance costs related to the ABL Facility, which are presented in other assets in the condensed consolidated balance sheets.

~~Debt Covenants~~

~~The Company was in compliance with all covenants of the Senior Notes, Senior Secured Notes, Term Loan Facility and ABL Facility as of June 30, 2022.~~

~~Other~~

~~Other borrowings as of June 30, 2022 and December 31, 2021 reflect borrowings under local bank lines classified in debt payable within one year on the condensed consolidated balance sheet.~~

~~10.~~8. Fair Value Measurements and Financial Instruments

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy is utilized, which prioritizes the inputs used in measuring fair value as follows:


Level 1:			Observable inputs such as quoted prices in active markets;
Level 2:			Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3:			Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Items Measured at Fair Value on a Recurring Basis

Estimates of the fair value of foreign currency derivative instruments are determined using exchange traded prices and rates. The Company also considers the risk of non-performance in the estimation of fair value and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. In certain instances where market data is not available, the Company uses management judgment to develop assumptions that are used to determine fair value. Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured or disclosed at fair value on a recurring basis as of June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows:

June 30, 2022 December 31, 2021 Input
Forward foreign exchange contracts - other current assets $ 1,380 $ 647 Level 2
Forward foreign exchange contracts - accrued liabilities (923) (1,535) Level 2


	June 30, 2023		December 31, 2022		Input
Forward foreign exchange contracts - other current assets	$	10,296	$	8,643	Level 2

Items Measured at Fair Value on a Nonrecurring Basis

In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a nonrecurring basis, which are not included in the table above. As these nonrecurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy.

During the three months ended June 30, 2023, the Company recorded impairment charges of $654, primarily related to certain assets in Asia Pacific. During the three months ended June 30, 2022, the Company recorded impairment charges of $3 due to idle assets in Europe. The fair value was determined using salvage value. In addition, during the six months ended June 30, 2022, the Company recorded a loss on the deconsolidation of a joint venture in the Asia Pacific region of $2,257, included in other income (expense), net in the condensed consolidated statements of operations. For further information ~~on assets and liabilities measured at fair value on a nonrecurring basis~~ see Note 2. “Deconsolidation and ~~Divestiture” and Note 7. “Property, Plant and Equipment.~~Sale-Leaseback.”

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

Items Not Carried at Fair Value

Fair values of the Company’s New Notes, 2026 Senior Notes, 2024 Senior Secured Notes and Term Loan Facility were as follows:


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Aggregate fair value	Aggregate fair value	$	717,271	$	899,909	Aggregate fair value	$	835,828	$	744,010
Aggregate carrying value (1)	Aggregate carrying value (1)	971,300		973,000		Aggregate carrying value (1)	1,007,500		969,600

(1) Excludes unamortized debt issuance costs and unamortized original issue discount.

Fair values were based on quoted market prices and are classified within Level 1 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

The Company is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Company enters into derivative instruments primarily to hedge portions of its forecasted foreign currency denominated cash flows and designates these derivative instruments as cash flow hedges in order to qualify for hedge accounting.

The Company formally documents its hedge relationships, including the identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the cash flow hedges. The Company also formally assesses whether a cash flow hedge is highly effective in offsetting changes in the cash flows of the hedged item. Derivatives are recorded at fair value in other current assets, other assets, accrued liabilities and other long-term liabilities. For a

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

cash flow hedge, the change in fair value of the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) in the condensed consolidated balance ~~sheet,~~sheets, to the extent that the hedges are effective, and reclassified into earnings when the underlying hedged transaction is realized. The realized gains and losses are recorded on the same line as the hedged transaction in the condensed consolidated statements of operations.

The Company is exposed to credit risk in the event of nonperformance by its counterparties on its derivative financial instruments. The Company mitigates this credit risk exposure by entering into agreements directly with major financial institutions with high credit standards that are expected to fully satisfy their obligations under the contracts.

Cash Flow Hedges

Forward Foreign Exchange ~~Contracts~~Contracts. - The Company uses forward contracts to mitigate the potential volatility to earnings and cash flows arising from changes in currency exchange rates that impact the Company’s foreign currency transactions. The principal currencies hedged by the Company include various European currencies, the Canadian Dollar, and the Mexican Peso. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the notional amount of these contracts was ~~$59,626~~$62,758 and ~~$136,103,~~$135,285, respectively, and consisted of hedges of cash flow transactions upextending out to December ~~2022.~~2023.

Pretax amounts related to the Company’s cash flow hedges that were recognized in other comprehensive income (loss) (“OCI”) were as follows:

Gain (Loss) Recognized in OCI
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ (515) $ 1,190 $ 1,896 $ 642


	Gain (Loss) Recognized in OCI
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Forward foreign exchange contracts	$	4,689	$	(515)	$	10,242	$	1,896

Pretax amounts related to the Company’s cash flow hedges that were reclassified from AOCI and recognized in cost of products sold were as follows:

Gain (Loss) Reclassified from AOCI to Income
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ 519 $ 349 $ 562 $ 537


	Gain Reclassified from AOCI to Income
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Forward foreign exchange contracts	$	5,245	$	519	$	8,579	$	562

1720

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~11. Accounts Receivable Factoring~~

As a part of its working capital management, the Company sells certain receivables through a single third-party financial institution (the “Factor”) in a pan-European program. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company. These are permitted transactions under the Company’s credit agreements governing the ABL Facility and Term Loan Facility and the indentures governing the Senior Notes and Senior Secured Notes. The European factoring facility, which was renewed in March 2020, allows the Company to factor up to €120 million of its Euro-denominated accounts receivable, accelerating access to cash and reducing credit risk. The factoring facility expires in December 2023.

June 30, 2022 December 31, 2021
Off-balance sheet arrangements $ 59,017 $ 52,743

~~Accounts receivable factored and related costs throughout the period were as follows:~~

Off-Balance Sheet Arrangements
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Accounts receivable factored $ 90,332 $ 100,046 $ 172,882 $ 217,317
Costs 114 150 239 304

As of June 30, 2022 and December 31, 2021, cash collections on behalf of the Factor that have yet to be remitted were $5,282 and $673, respectively, and are reflected in other current assets as restricted cash in the condensed consolidated balance sheet.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

~~12.~~9. Pension and Postretirement Benefits Other Than Pensions

The components of net periodic benefit (income) cost for the Company’s defined benefit plans and other postretirement benefit plans were as follows:


		Pension Benefits									Pension Benefits
		Three Months Ended June 30,									Three Months Ended June 30,
		2022				2021					2023				2022
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	193	$	692	$	223	$	913	Service cost	$	—	$	543	$	193	$	692
Interest cost	Interest cost	1,766		716		1,629		660		Interest cost	2,314		1,315		1,766		716
Expected return on plan assets	Expected return on plan assets	(2,323)		(252)		(3,564)		(344)		Expected return on plan assets	(2,113)		(308)		(2,323)		(252)
Amortization of prior service cost and actuarial loss	Amortization of prior service cost and actuarial loss	222		396		418		933		Amortization of prior service cost and actuarial loss	778		6		222		396
Other		—		—		—		125
Net periodic benefit (income) cost		$	(142)	$	1,552	$	(1,294)	$	2,287

Net periodic benefit cost (income)										Net periodic benefit cost (income)	$	979	$	1,556	$	(142)	$	1,552
		Pension Benefits
		Six Months Ended June 30,
		2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost		$	386	$	1,413	$	446	$	1,827
Interest cost		3,532		1,449		3,258		1,308
Expected return on plan assets		(4,646)		(506)		(7,128)		(678)
Amortization of prior service cost and actuarial loss		444		811		836		1,865
Other		—		—		—		125

Net periodic benefit (income) cost		$	(284)	$	3,167	$	(2,588)	$	4,447


	Pension Benefits
	Six Months Ended June 30,
	2023				2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	—	$	1,078	$	386	$	1,413
Interest cost	4,628		2,610		3,532		1,449
Expected return on plan assets	(4,226)		(615)		(4,646)		(506)
Amortization of prior service cost and actuarial loss	1,556		12		444		811

Net periodic benefit cost (income)	$	1,958	$	3,085	$	(284)	$	3,167

Other Postretirement Benefits
Three Months Ended June 30,
2022 2021
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 22 $ 57 $ 26 $ 93
Interest cost 140 167 133 183
Amortization of prior service credit and actuarial (gain) loss (394) 42 (349) 196
Net periodic benefit (income) cost $ (232) $ 266 $ (190) $ 472
Other Postretirement Benefits
Six Months Ended June 30,
2022 2021
U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 44 $ 115 $ 52 $ 183
Interest cost 280 335 266 360
Amortization of prior service credit and actuarial (gain) loss (788) 84 (698) 386
Net periodic benefit (income) cost $ (464) $ 534 $ (380) $ 929


	Other Postretirement Benefits
	Three Months Ended June 30,
	2023				2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	13	$	37	$	22	$	57
Interest cost	205		198		140		167
Amortization of prior service credit and actuarial (gain) loss	(609)		(21)		(394)		42

Net periodic benefit (income) cost	$	(391)	$	214	$	(232)	$	266


	Other Postretirement Benefits
	Six Months Ended June 30,
	2023				2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	26	$	75	$	44	$	115
Interest cost	410		395		280		335
Amortization of prior service credit and actuarial (gain) loss	(1,218)		(42)		(788)		84

Net periodic benefit (income) cost	$	(782)	$	428	$	(464)	$	534

The service cost component of net periodic benefit (income) cost is included in cost of products sold and selling, administrative and engineering expenses in the condensed consolidated statements of operations. All other components of net periodic benefit (income) cost are included in other income (expense), net in the condensed consolidated statements of operations for all periods presented.

1921

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~13.~~

On October 11, 2022, the Company’s Board of Directors approved a resolution to merge certain of the Company’s U.S. defined benefit pension plans, and terminate the resulting merged plan (“U.S. Pension Plan”) effective December 31, 2022. The termination of the U.S. Pension Plan is expected to take twelve to eighteen months to complete. As part of the termination process, the Company expects to settle benefit obligations under the U.S. Pension Plan through a combination of lump sum payments to eligible plan participants and the purchase of a group annuity contract, under which future benefit obligations and administration will be transferred to a third-party insurance company. Such settlements will be funded primarily from plan assets. Ultimate settlement of benefit obligations is dependent upon the participants’ elections. As of June 30, 2023 and December 31, 2022, the U.S. Pension Plan was underfunded under U.S. generally accepted accounting principles by $5,888 and $5,759, respectively.

10. Other Income (Expense), Net

The components of other income (expense), net were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Deconsolidation of joint venture (1)	Deconsolidation of joint venture (1)	$	—	$	—	$	(2,257)	$	—	Deconsolidation of joint venture (1)	$	—	$	—	$	—	$	(2,257)
Foreign currency (losses) gains	Foreign currency (losses) gains	(1,136)		1,114		344		(4,150)		Foreign currency (losses) gains	(534)		(1,136)		(2,451)		344
Components of net periodic (cost) benefit income other than service cost		(480)		(20)		(995)		100
Components of net periodic cost other than service cost										Components of net periodic cost other than service cost	(1,765)		(480)		(3,510)		(995)
Factoring costs	Factoring costs	(114)		(150)		(239)		(304)		Factoring costs	(636)		(114)		(1,073)		(239)
Miscellaneous income	Miscellaneous income	221		418		427		627		Miscellaneous income	374		221		469		427
Other (expense) income, net		$	(1,509)	$	1,362	$	(2,720)	$	(3,727)
Other expense, net										Other expense, net	$	(2,561)	$	(1,509)	$	(6,565)	$	(2,720)

(1)Loss attributable to deconsolidation of a joint venture in the Asia Pacific region, which required adjustment to fair value.

~~14.~~11. Income Taxes

The Company determines its effective tax rate each quarter based upon its estimated annual effective tax rate. The Company records 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.

Income tax expense, ~~(benefit),~~ loss before income taxes and the corresponding effective tax rate for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022			2021			2022			2021				2023			2022			2023			2022
Income tax expense (benefit)		$	2,005		$	(17,459)		$	2,657		$	(16,523)
Income tax expense														Income tax expense	$	4,765		$	2,005		$	5,123		$	2,657
Loss before income taxes	Loss before income taxes	(32,146)			(81,988)			(93,284)			(115,765)			Loss before income taxes	(23,655)			(32,146)			(154,409)			(93,284)
Effective tax rate	Effective tax rate	(6)		%	21		%	(3)		%	14		%	Effective tax rate	(20)		%	(6)		%	(3)		%	(3)		%

The effective tax rate for the three and six months ended June 30, ~~2022~~2023 varied from the effective tax rate for the three and six months ended June 30, ~~2021~~2022 primarily due to the the geographic mix of pre-tax losses, and the inability to record a benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, ~~discrete tax impacts of the gain on sale transaction in Europe,~~ and other ~~tax reserve changes during the three and six months ended June 30, 2022.~~permanent items.

The income tax rate for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 varied from the U.S. statutory rate primarily due to the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions, tax credits, the impact of income taxes on foreign earnings taxed at rates varying from the U.S. statutory rate, and other permanent items.

During the three months ended June 30, 2022, the Company received $51,396 in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss carrybacks.

The Company’s current and future provision for income taxes is impacted by changes in valuation allowances in the U.S. and certain foreign jurisdictions. The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine, based on the weight of the evidence, if a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.

The Company, or one of its subsidiaries, files income tax returns in the United States and other foreign jurisdictions. During the examination of our 2015-2018 U.S. federal income tax filings, the IRS asserted that income earned by a Netherlands subsidiary from its Mexican branch operations should be categorized as foreign based company sales income under Section 954(d) of the Internal Revenue Code and should be recognized currently as taxable income on our 2015-2018 U.S. federal income tax filings. As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (“NOPA”). The Company believes the proposed adjustment is without merit and has begun the process of contesting the matter. Currently, the protest for the 2015-2018 tax years has been submitted to the IRS’s administrative appeals office. The Company believes, after consultation with tax and legal counsel, that it is more likely than not that it will ultimately be successful in defending its position. As such, the Company has not recorded any impact of the IRS’s proposed adjustment in its condensed consolidated financial statements as of and for the three and six months ended June 30, 2023. In the event the Company is not successful in defending its position, the potential income tax expense impact, including interest, related to tax years 2015 through June 30, 2023 is less than $15,000. The Company intends to vigorously contest the conclusions reached in the NOPA through the IRS’s administrative appeals process, and, if necessary, through litigation.

~~15.~~On August 16, 2022, the U.S. enacted the Inflation Reduction Action of 2022, which, among other things, implements a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. The provisions were effective in the first quarter of 2023 and did not have a significant impact on the Company’s condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

12. Net Loss Per Share Attributable to Cooper-Standard Holdings Inc.

Basic net loss per share attributable to Cooper-Standard Holdings Inc. was computed by dividing net loss attributable to Cooper-Standard Holdings Inc. by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share attributable to Cooper-Standard Holdings Inc. was computed using the treasury stock method by dividing diluted net loss available to Cooper-Standard Holdings Inc. by the weighted average number of shares of common stock outstanding, including the dilutive effect of common stock equivalents, using the average share price during the period.

Information used to compute basic and diluted net loss per share attributable to Cooper-Standard Holdings Inc. was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Net loss available to Cooper-Standard Holdings Inc. common stockholders	Net loss available to Cooper-Standard Holdings Inc. common stockholders	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss available to Cooper-Standard Holdings Inc. common stockholders	$	(27,829)	$	(33,247)	$	(158,196)	$	(94,607)

Basic weighted average shares of common stock outstanding	Basic weighted average shares of common stock outstanding	17,189,128		17,031,113		17,162,915		16,991,372		Basic weighted average shares of common stock outstanding	17,334,918		17,189,128		17,282,462		17,162,915
Dilutive effect of common stock equivalents	Dilutive effect of common stock equivalents	—		—		—		—		Dilutive effect of common stock equivalents	—		—		—		—
Diluted weighted average shares of common stock outstanding	Diluted weighted average shares of common stock outstanding	17,189,128		17,031,113		17,162,915		16,991,372		Diluted weighted average shares of common stock outstanding	17,334,918		17,189,128		17,282,462		17,162,915

Basic net loss per share attributable to Cooper-Standard Holdings Inc.	Basic net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Basic net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.61)	$	(1.93)	$	(9.15)	$	(5.51)

Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.61)	$	(1.93)	$	(9.15)	$	(5.51)

Securities excluded from the calculation of diluted loss per share were approximately ~~26,000~~44,000 and ~~164,000~~26,000 for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~67,000~~42,000 and ~~172,000~~67,000 for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, because the inclusion of such securities in the calculation would have been anti-dilutive.

2124

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~16.~~13. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of related tax, were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022			2021			2022			2021				2023			2022			2023			2022
Foreign currency translation adjustment	Foreign currency translation adjustment													Foreign currency translation adjustment
Balance at beginning of period	Balance at beginning of period	$	(130,375)		$	(142,899)		$	(138,751)		$	(136,579)		Balance at beginning of period	$	(158,093)		$	(130,375)		$	(158,023)		$	(138,751)
Other comprehensive (loss) income before reclassifications		(17,361)		(1)	8,522		(1)	(8,691)		(1)	2,202		(1)
Other comprehensive loss before reclassifications														Other comprehensive loss before reclassifications	(7,295)		(1)	(17,361)		(1)	(7,365)		(1)	(8,691)		(1)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	—			—			(294)			—			Amounts reclassified from accumulated other comprehensive loss	—			—			—			(294)
Balance at end of period	Balance at end of period	$	(147,736)		$	(134,377)		$	(147,736)		$	(134,377)		Balance at end of period	$	(165,388)		$	(147,736)		$	(165,388)		$	(147,736)
Benefit plan liabilities	Benefit plan liabilities													Benefit plan liabilities
Balance at beginning of period	Balance at beginning of period	$	(64,319)		$	(103,340)		$	(65,303)		$	(106,079)		Balance at beginning of period	$	(60,151)		$	(64,319)		$	(60,251)		$	(65,303)
Other comprehensive income (loss) before reclassifications		1,831		(2)	(602)		(2)	2,538		(2)	1,041		(2)
Other comprehensive (loss) income before reclassifications (net of tax benefit of $(94), $(63), $(29), and $(244), respectively)														Other comprehensive (loss) income before reclassifications (net of tax benefit of $(94), $(63), $(29), and $(244), respectively)	(16)			1,831			(74)			2,538
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	232		(3)	1,213		(4)	509		(5)	2,309		(6)	Amounts reclassified from accumulated other comprehensive loss	158		(2)	232		(3)	316		(4)	509		(5)
Balance at end of period	Balance at end of period	$	(62,256)		$	(102,729)		$	(62,256)		$	(102,729)		Balance at end of period	$	(60,009)		$	(62,256)		$	(60,009)		$	(62,256)
Fair value change of derivatives	Fair value change of derivatives													Fair value change of derivatives
Balance at beginning of period	Balance at beginning of period	$	1,301		$	191		$	(1,130)		$	762		Balance at beginning of period	$	10,646		$	1,301		$	8,303		$	(1,130)
Other comprehensive (loss) income before reclassifications		(657)		(7)	1,008		(7)	1,815		(7)	576		(7)
Amounts reclassified from accumulated other comprehensive loss		(366)		(8)	(257)		(8)	(407)		(8)	(396)		(8)
Other comprehensive income (loss) before reclassifications (net of tax expense of $1,419, $142, $2,189, and $81, respectively)														Other comprehensive income (loss) before reclassifications (net of tax expense of $1,419, $142, $2,189, and $81, respectively)	3,270			(657)			8,053			1,815
Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $1,401, $153, $2,295, and $155, respectively)														Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $1,401, $153, $2,295, and $155, respectively)	(3,844)			(366)			(6,284)			(407)
Balance at end of period	Balance at end of period	$	278		$	942		$	278		$	942		Balance at end of period	$	10,072		$	278		$	10,072		$	278
Accumulated other comprehensive loss, ending balance	Accumulated other comprehensive loss, ending balance	$	(209,714)		$	(236,164)		$	(209,714)		$	(236,164)		Accumulated other comprehensive loss, ending balance	$	(215,325)		$	(209,714)		$	(215,325)		$	(209,714)

(1)Includes other comprehensive (loss) income related to intra-entity foreign currency balances that are of a long-term investment nature of ~~$(12,877)~~$1,979 and ~~$7,668~~$(12,877) for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$(4,235)~~$(1,844) and ~~$3,279~~$(4,235) for the six months ended June 30, 2023 and 2022, ~~and 2021,~~ respectively.

(2)~~Net~~Includes the effect of the amortization of actuarial losses of $147 and amortization of prior service cost of $6, net of tax ~~benefit~~ of ~~$(63) and $(32) for the three months ended June 30, 2022 and 2021, respectively, and $(244) and $(277) for the six months ended June 30, 2022 and 2021, respectively.~~$5.

(3)Includes the effect of the amortization of actuarial losses of $192 and amortization of prior service cost of $44, net of tax of $4.

(4)Includes the effect of the amortization of actuarial losses of ~~$1,128,~~$294 and amortization of prior service cost of ~~$63, and impact of curtailment of $117,~~$12, net of tax of ~~$95.~~$10.

(5)Includes the effect of the amortization of actuarial losses of $424 and amortization of prior service cost of $93, net of tax of $8.

~~(6)Includes the effect of the amortization of actuarial losses of $2,252, amortization of prior service cost of $128, and impact of curtailment of $117, net of tax of $188.~~

~~(7)Net of tax expense of $142 and $182 for the three months ended June 30, 2022 and 2021, respectively, and $81 and $66 for the six months ended June 30, 2022 and 2021, respectively.~~

~~(8)Net of tax expense of $153 and $92 for the three months ended June 30, 2022 and 2021, respectively, and $155 and $141 for the six months ended June 30, 2022 and 2021, respectively.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

~~17.~~14. Common Stock

Share Repurchase Program

In June 2018, the Company’s Board of Directors approved a common stock repurchase program (the “2018 Program”) authorizing the Company to repurchase, in the aggregate, up to $150,000 of its outstanding common stock. Under the 2018 Program, repurchases may be made on the open market, through private transactions, accelerated share repurchases, round lot or block transactions on the New York Stock Exchange or otherwise, as determined by management and in accordance with prevailing market conditions and federal securities laws and regulations. The Company expects to fund any future repurchases from cash on hand and future cash flows from operations. The Company is not obligated to acquire a particular amount of securities, and the 2018 Program may be discontinued at any time at the Company’s discretion. The 2018 Program became effective in November 2018. As of June 30, ~~2022,~~2023, the Company had approximately $98,720 of repurchase authorization remaining under the 2018 Program. The Company did not make any repurchases under the 2018 Program during the six months ended June 30, ~~2022~~2023 or ~~2021.~~2022.

~~18. Share-Based Compensation~~

The Company’s long-term incentive plans allow for the grant of various types of share-based awards to key employees and directors of the Company and its affiliates. The Company generally awards grants on an annual basis.

In February 2022, the Company granted Restricted Stock Units (“RSUs”) and Performance Units (“PUs”). The number of PUs that will vest depends on the Company’s achievement of target performance goals related to the Company’s return on invested capital (“ROIC”) and total shareholder return, which may range from 0% to 200% of the target award amount. The PUs tied to total shareholder return cliff vest at the end of a three year performance period. The PUs tied to ROIC cliff vest one year after the end of their individual performance periods. The RSUs vest ratably over three years.

~~Share-based compensation expense was as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
PUs $ 242 $ (645) $ 312 $ (306)
RSUs 497 885 621 2,131
Stock options 302 584 692 1,177
Total $ 1,041 $ 824 $ 1,625 $ 3,002

~~19.~~15. Commitments and Contingencies

The Company is periodically involved in claims, litigation and various legal matters that arise in the ordinary course of business. The Company accrues for litigation exposure when it is probable that future costs will be incurred and such costs can

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

be reasonably estimated. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. As of June 30, ~~2022,~~2023, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for claims, litigation and various legal matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition, results of operations or cash flows could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.

In addition, the Company conducts and monitors environmental investigations and remedial actions at certain locations. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had approximately ~~$12,490~~$9,523 and ~~$9,965,~~$10,817, respectively, reserved in accrued liabilities and other liabilities onin the condensed consolidated balance sheets on an undiscounted basis. While the Company’s costs to defend and settle known claims arising under environmental laws have not been material in the past and are not currently estimated to have a material adverse effect on the Company’s financial condition, such costs may be material to the Company’s financial statements in the future.

~~20.~~16. Segment Reporting

The Company’s automotive business is organized in the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company’s principal products within each of the reportable segments are sealing, fuel and brake delivery, and fluid transfer systems.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

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

The Company uses ~~Segment~~segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. The results of each segment include certain allocations for general, administrative and other shared costs. Segment adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Certain financial information on the Company’s reportable segments was as follows:


		Three Months Ended June 30,													Three Months Ended June 30,
		2022						2021							2023						2022
		External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA			External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America	North America	$	331,687	$	2,747	$	15,441	$	247,525	$	2,140	$	756	North America	$	368,810	$	2,915	$	23,849	$	331,687	$	2,747	$	15,441
Europe	Europe	126,287		1,541		(15,316)		132,621		2,836		(14,391)		Europe	177,897		1,568		16,260		126,287		1,541		(15,316)
Asia Pacific	Asia Pacific	85,779		908		(7,799)		103,915		858		(2,302)		Asia Pacific	111,222		2,215		7,194		85,779		908		(7,799)
South America	South America	26,261		—		(1,298)		14,153		3		(726)		South America	33,514		5		3,375		26,261		—		(1,298)
Total Automotive	Total Automotive	570,014		5,196		(8,972)		498,214		5,837		(16,663)		Total Automotive	691,443		6,703		50,678		570,014		5,196		(8,972)
Corporate, eliminations and other	Corporate, eliminations and other	35,903		(5,196)		(1,402)		34,971		(5,837)		1,937		Corporate, eliminations and other	32,297		(6,703)		(2,739)		35,903		(5,196)		(1,402)
Consolidated	Consolidated	$	605,917	$	—	$	(10,374)	$	533,185	$	—	$	(14,726)	Consolidated	$	723,740	$	—	$	47,939	$	605,917	$	—	$	(10,374)

		Six Months Ended June 30,
		2022						2021
		External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America		$	653,581	$	6,277	$	32,937	$	586,561	$	4,773	$	41,989
Europe		257,701		3,910		(29,973)		298,397		5,815		(15,880)
Asia Pacific		189,532		1,533		(8,541)		218,140		1,488		1,250
South America		47,780		5		(1,707)		29,639		15		(3,334)
Total Automotive		1,148,594		11,725		(7,284)		1,132,737		12,091		24,025
Corporate, eliminations and other		70,307		(11,725)		(2,945)		69,415		(12,091)		(211)
Consolidated		$	1,218,901	$	—	$	(10,229)	$	1,202,152	$	—	$	23,814

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Adjusted EBITDA $ (10,374) $ (14,726) $ (10,229) $ 23,814
Restructuring charges (3,482) (11,631) (11,313) (32,678)
Deconsolidation of joint venture — — (2,257) —
Impairment charges (3) (841) (458) (841)
(Loss) gain on sale of business, net — (195) — 696
Gain on sale of fixed assets, net 33,391 — 33,391 —
Lease termination costs — (108) — (108)
Indirect tax adjustments (908) — (908) —
EBITDA $ 18,624 $ (27,501) $ 8,226 $ (9,117)
Income tax expense (2,005) 17,459 (2,657) 16,523
Interest expense, net of interest income (18,454) (18,125) (36,631) (35,909)
Depreciation and amortization (31,412) (35,444) (63,545) (68,972)
Net loss attributable to Cooper-Standard Holdings Inc. $ (33,247) $ (63,611) $ (94,607) $ (97,475)


	Six Months Ended June 30,
	2023						2022
	External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America	$	733,937	$	5,927	$	49,723	$	653,581	$	6,277	$	32,937
Europe	339,752		3,371		3,865		257,701		3,910		(29,973)
Asia Pacific	206,007		4,689		8,884		189,532		1,533		(8,541)
South America	62,355		11		5,303		47,780		5		(1,707)
Total Automotive	1,342,051		13,998		67,775		1,148,594		11,725		(7,284)
Corporate, eliminations and other	64,147		(13,998)		(7,379)		70,307		(11,725)		(2,945)
Consolidated	$	1,406,198	$	—	$	60,396	$	1,218,901	$	—	$	(10,229)

2426

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

June 30, 2022 December 31, 2021
Segment assets:
North America $ 897,898 $ 885,517
Europe 395,273 372,097
Asia Pacific 445,606 510,524
South America 76,679 61,479
Total Automotive 1,815,456 1,829,617
Corporate, eliminations and other 324,926 396,876
Consolidated $ 2,140,382 $ 2,226,493


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Adjusted EBITDA	$	47,939	$	(10,374)	$	60,396	$	(10,229)
Restructuring charges	(8,499)		(3,482)		(10,878)		(11,313)
Deconsolidation of joint venture	—		—		—		(2,257)
Impairment charges	(654)		(3)		(654)		(458)

Gain on sale of fixed assets, net	—		33,391		—		33,391

Indirect tax adjustments	—		(908)		—		(908)



Loss on refinancing and extinguishment of debt	—		—		(81,885)		—
EBITDA	$	38,786	$	18,624	$	(33,021)	$	8,226
Income tax expense	(4,765)		(2,005)		(5,123)		(2,657)
Interest expense, net of interest income	(34,034)		(18,454)		(64,254)		(36,631)
Depreciation and amortization	(27,816)		(31,412)		(55,798)		(63,545)
Net loss attributable to Cooper-Standard Holdings Inc.	$	(27,829)	$	(33,247)	$	(158,196)	$	(94,607)


	June 30, 2023		December 31, 2022
Segment assets:
North America	$	852,752	$	851,623
Europe	296,683		338,225
Asia Pacific	381,831		447,257
South America	96,661		73,403
Total Automotive	1,627,927		1,710,508
Corporate, eliminations and other	242,892		253,021
Consolidated	$	1,870,819	$	1,963,529

2527

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

This management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Our historical results may not indicate, and should not be relied upon as an indication of, our future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. See “Forward-Looking Statements” below for a discussion of risks associated with reliance on forward-looking statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed below and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the U.S. Securities and Exchange Commission (“~~2021~~2022 Annual Report”), including Item 1A. “Risk Factors.” The following should be read in conjunction with our ~~2021~~2022 Annual Report and the other information included herein. Our discussion of trends and conditions supplements and updates such discussion included in our ~~2021~~2022 Annual Report. References in this quarterly report on Form 10-Q (the “Report”) to “we,” “our,” or the “Company” refer to Cooper-Standard Holdings Inc., together with its consolidated subsidiaries.

Executive Overview

Our Business

We design, manufacture and sell sealing, fuel and brake delivery, and fluid transfer systems for use primarily in passenger vehicles and light trucks manufactured by global automotive original equipment manufacturers (“OEMs”). We are primarily a “Tier 1” supplier, with approximately ~~83%~~82% of our sales in ~~2021~~2022 made directly to major OEMs. We operate our automotive business along the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other.

Recent Trends and Conditions

General Economic Conditions and Outlook

The global automotive industry is susceptible to uncertain economic conditions that could adversely impact new vehicle demand and production. Business conditions may vary significantly from period to period or region to region. In ~~2020, the COVID-19 pandemic created an unusually high degree of economic disruption and uncertainty globally which adversely impacted automotive production. In 2021,~~2022, global automotive production ~~was again~~continued to be negatively impacted by broad supply chain challenges, labor market disruptions and other lingering impacts of the COVID-19 ~~pandemic and broad~~pandemic. In 2023, relative to 2022, supply chain ~~challenges stemming,~~disruptions have improved and light vehicle production rates have largely stabilized. New vehicle inventory has increased in ~~part, from a sharp rebound~~key markets but remains significantly below historic, pre-pandemic average levels. The relatively low light vehicle inventory levels are expected to support further increases in ~~overall industrial demand. In 2022,~~global light vehicle production through 2024. Global consumer demand for new vehicles has largely remained resilient despite the headwinds of rising interest rates, energy market volatility, persistent inflation and continuing supply chain challenges are contributing to global economic uncertainty. In addition, recent pandemic related restrictions imposed in certain large population centers in China, the threat of additional lockdowns, and continuing military actions in Eastern Europe are having broad negative impacts on key sectors of the global economy.ongoing geopolitical tension.

In North America, U.S. consumer confidence ~~has trended downward since~~increased in the latter portion of the second quarter of ~~2021.~~2023. Key drivers of the ~~decline~~improvement in consumer sentiment are ~~significant~~easing inflation, ~~continuing supply chain disruptions~~expectations for stabilizing interest rates, and ~~rising interest rates. Geopolitical tensions and persistent~~the resolution of the government’s debt ceiling crisis. These changing dynamics have eased concerns over ~~new variants~~the likelihood of ~~COVID-19 are also important factors. However,~~a major economic recession in the ~~U.S. economy is seeing some benefits from~~ near ~~all-time low unemployment rates~~term. A continuing strong labor market, resilience in the services sector and ~~rising wages. In addition, current and future~~ government ~~spending authorized by recently passed infrastructure legislation and private~~ spending related to ~~pent-up consumer demand continue~~infrastructure are expected to ~~support~~drive modest economic ~~growth.~~growth during the second half of 2023. Economists at the International Monetary Fund (IMF) are expecting the economies of the United States, Canada and Mexico to grow by ~~2.3~~1.8 percent, ~~3.4~~1.7 percent and ~~2.4~~2.6 percent, respectively, in ~~2022.~~2023.

In Europe, ~~the war in Ukraine~~current consumer and ~~related sanctions imposed on Russia are having a dramatic impact on energy prices and energy security. This~~business indicators suggest an economic recovery is ~~translating into lower output and higher inflation for most Eurozone countries. Supply chain disruptions~~underway. Key labor markets have ~~also hurt certain industries including the automobile sector,~~remained strong, with the ~~war~~region recently experiencing record low unemployment levels. Concerns over a potential energy crisis are fading and ~~sanctions hindering~~consumer expenditures have stabilized. Increasing demand in the ~~production~~consumer services sector is now supportive of ~~key input materials. The easing of COVID-19 restrictions, tighter labor markets, pent-up spending~~economic growth. However, inflation remains stubbornly high, the European Central Bank is continuing to raise policy interest rates, and ~~European Union fiscal policy changes should continue to sustain activity~~geopolitical uncertainty remains high. Industrial demand and ~~support some growth in 2022. Economists~~output have leveled off as pandemic-related backlogs have been depleted.In this uncertain environment, economists at the IMF are currently expecting the economy in the Eurozone region to grow by approximately ~~2.6~~0.9 percent ~~for the year.~~in 2023.

In the Asia Pacific region, China’s economy experienced a sharp rebound during the ~~combination~~first quarter of ~~more transmissible variants and~~2023 following the ~~strict zero-COVID strategy~~removal of COVID-related restrictions. Year-over-year growth continued in China has led to repeated mobility restrictions and localized lockdowns that have weighed on economic activity and private consumption. Recent lockdowns in key Chinese manufacturing and trading hubs such as Shenzhen and Shanghai compounded supply disruptions elsewhere in the region and beyond during the second quarter, ~~of 2022. Moreover, real estate investment in China, once a key driver of~~primarily due to the weak prior year comparable data which was adversely impacted by the pandemic. Underlying economic ~~growth,~~momentum has slowed, ~~significantly. As~~however, due to subdued consumer sentiment and continued weakness in the property sector. In addition, demand for Chinese exports ~~surged~~has softened due to continuing geopolitical tensions among key trading partners. While considerable uncertainty remains in ~~June 2022 following the end of the most recent round of COVID-related lockdowns, the Chinese government reaffirmed a GDP growth target of “around of~~various,

2628

~~5.5 percent” for 2022, implying that further stimulus measures may be implemented~~important economic sectors, the nation’s leaders have pledged to ~~sustain~~provide additional monetary and fiscal support as necessary to ensure key economic ~~growth.~~targets are achieved. Economists at the IMF are expecting the Chinese economy to grow ~~3.3~~5.2 percent ~~for the year.~~in 2023.

In South America, the Brazilian economy ~~continues to expand amid fiscal support and~~has experienced better than expected economic growth in the ~~lessening impact~~first half of the ~~COVID-19 pandemic. Increasing exports of goods and services~~year, driven mainly by surging agricultural output to meet increasing demand from China. Higher interest rates put in place in 2022 have ~~provided strong support~~been effective in controlling inflation and the unemployment rate ~~remains low. Tighter monetary policy,~~has fallen to levels not seen since 2015. In June, the Senate approved a revised fiscal framework which looks to balance fiscal prudence while still providing flexibility for additional social spending. While interest rate cuts may be possible with inflation ~~and political uncertainty ahead of~~at bay, tax increases may be necessary to pay for the ~~October 2022 general elections are likely to temper investment and economic growth in the second half of the year.~~social spending programs. Economists at the IMF are now estimating the Brazilian economy will grow ~~just 1.7~~2.1 percent in ~~2022.~~2023. We remain cautious for the economic outlook in this market given the long history of political instability and economic volatility in the ~~region.~~region.

Raw Materials

Our business is susceptible to inflationary pressures with respect to raw materials. Abrupt changes in the market prices or availability of certain key raw materials ~~which~~ may ~~place~~result in operational and profitability ~~burdens on~~challenges for the ~~entire supply chain. Costs related to~~Company and the industry as a whole. Following the pandemic, market prices for key raw materials, such as steel, aluminum, and oil-derived commodities, ~~continue to be volatile,~~experienced a period of extreme volatility, which led to significant cost increases for our business in ~~these costs in 2021. Current global events continue~~2021 and 2022. In response, we worked with our customers throughout 2022 to ~~add further price pressure and uncertainty~~implement or expand index-based commercial agreements that have enabled us to ~~raw~~partially recover incremental material costs incurred and significantly reduced our exposure and risk related to commodity price fluctuations going forward. Global commodity markets and pricing have stabilized to a large degree in the first half of 2023, and material cost impacts on our results for ~~2022. In addition,~~the six months ended June 30, 2023 were relatively small. However, we continue to ~~see~~experience significant inflationary pressure on wages, energy, transportation and other general costs. As such, we will continue to work on an ongoing basis with our customers and suppliers to mitigate ~~both inflationary pressures and~~the impact of cost inflation that is beyond our ~~material-related cost exposures through a combination of expanded index-based agreements and other commercial enhancements.~~control.

Production Levels

Our business is directly affected by the automotive light vehicle production rates in North America, Europe, Asia Pacific and South ~~America which~~America. Historically, production levels have been ~~adversely affected by a series of events in~~viewed as cyclical and largely dependent upon factors such as consumer demand, inventory levels, consumer confidence and other economic and competitive trends. In recent ~~years. Beginning in the first quarter of 2020, we~~years, however, global light vehicle production, inventory and consumer demand all experienced ~~production shutdowns related~~extreme dislocations from historic norms due to the global COVID-19 ~~pandemic. Beginning in the first quarter of 2021, OEM~~pandemic and related restrictions on production ~~volumes were disrupted~~and consumer activity. Post-pandemic, global light vehicle production continued to be negatively impacted by the global shortage of semiconductors. In 2022, disruptions stemming from the Russia-Ukraine crisis and lockdowns in key Chinese manufacturing and trading hubs such as Shenzhen and Shanghai have further exacerbatedwidespread supply chain disruptions, limiting the global automotive OEM’s ability to rebuild inventory and meet pent-up consumer demand. Since the second half of 2022, the supply chain disruptions have lessened, enabling modest increases in production and inventory levels, primarily in high demand, high margin market segments. The ramp-up of global light vehicle production ~~levels. We continue to collaborate closely~~continued in the second quarter of 2023 with ~~our customers to minimize production inefficiencies while supporting their needs.~~all key regions showing strong improvement.

Light vehicle production in certain regions for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 was as follows:


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended June 30,			Six Months Ended June 30,
(In millions of units)		2022(1)	2021(1)	% Change	2022(1)	2021(1)	% Change
(in millions of units)								(in millions of units)	2023(1)	2022(1)	% Change	2023(1)	2022(1)	% Change
North America	North America	3.6	3.2	11.7%	7.1	6.8	4.7%	North America	4.1	3.5	14.9%	8.0	7.1	12.2%
Europe	Europe	3.9	4.1	(4.9)%	7.8	8.9	(11.8)%	Europe	4.5	4.0	14.3%	9.2	7.9	16.1%
Asia Pacific	Asia Pacific	10.0	10.3	(2.6)%	21.3	21.4	(0.2)%	Asia Pacific	12.0	10.2	17.3%	23.7	21.5	9.9%
Greater China	Greater China	5.5	5.8	(5.9)%	11.7	11.6	0.6%	Greater China	6.6	5.5	20.4%	12.6	11.7	7.1%
South America	South America	0.7	0.6	12.9%	1.3	1.3	(0.5)%	South America	0.8	0.7	6.7%	1.4	1.3	10.0%

(1)Production data based on S&P Global (formerly IHS Markit), July ~~2022.~~2023.

~~In all regions,~~Despite the strong production ~~volumes were impacted by the global shortage of semiconductors which began~~ in the ~~first~~second quarter of ~~2021~~2023, vehicle production and ~~deteriorated thereafter throughout the year. Production~~inventory levels remain well below pre-pandemic historical averages. Current industry forecasts suggest global light vehicle production will continue to increase modestly each year through at least 2025. Actual production may vary from forecasted levels due to a number of factors, however, including, but not limited to, possible work stoppages related to ~~semiconductor~~union contract negotiations with the OEMs in North America.

General Inflation and Recovery Strategy

With continued inflationary pressures on wages, energy, transportation and other ~~supply chain shortages continued into 2022, but have improved sequentially quarter over quarter. In Europe, vehicle production~~general costs, in order to remain competitive, we are working with our customers on an ongoing basis to offset the six months ended June 30, 2022 was negatively impacted by additional supply chain issues related to the Russia-Ukraine crisis. In China, vehicle production in the three months ended June 30, 2022 was negatively impacted by the COVID-19 related shutdowns.costs associated with this inflation. We are

2729

actively negotiating pricing adjustments on current business and considering the impact of inflationary and other costs in our quotes for new business.

Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022		2021		Change		2022		2021		Change			2023		2022		Change		2023		2022		Change
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales	Sales	$	605,917	$	533,185	$	72,732	$	1,218,901	$	1,202,152	$	16,749	Sales	$	723,740	$	605,917	$	117,823	$	1,406,198	$	1,218,901	$	187,297
Cost of products sold	Cost of products sold	590,541		534,118		56,423		1,181,983		1,134,793		47,190		Cost of products sold	646,026		590,541		55,485		1,286,656		1,181,983		104,673
Gross profit (loss)		15,376		(933)		16,309		36,918		67,359		(30,441)
Gross profit														Gross profit	77,714		15,376		62,338		119,542		36,918		82,624
Selling, administration & engineering expenses	Selling, administration & engineering expenses	52,282		50,085		2,197		104,186		108,139		(3,953)		Selling, administration & engineering expenses	54,605		52,282		2,323		106,694		104,186		2,508
Loss (gain) on sale of business, net		—		195		(195)		—		(696)		696

Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		(33,391)		(33,391)		—		(33,391)		Gain on sale of fixed assets, net	—		(33,391)		33,391		—		(33,391)		33,391
Amortization of intangibles	Amortization of intangibles	1,737		1,933		(196)		3,483		3,705		(222)		Amortization of intangibles	1,672		1,737		(65)		3,479		3,483		(4)
Restructuring charges	Restructuring charges	3,482		11,631		(8,149)		11,313		32,678		(21,365)		Restructuring charges	8,499		3,482		5,017		10,878		11,313		(435)

Impairment charges	Impairment charges	3		841		(838)		458		841		(383)		Impairment charges	654		3		651		654		458		196
Operating loss		(8,737)		(65,618)		56,881		(49,131)		(77,308)		28,177
Operating profit (loss)														Operating profit (loss)	12,284		(8,737)		21,021		(2,163)		(49,131)		46,968
Interest expense, net of interest income	Interest expense, net of interest income	(18,454)		(18,125)		(329)		(36,631)		(35,909)		(722)		Interest expense, net of interest income	(34,034)		(18,454)		(15,580)		(64,254)		(36,631)		(27,623)
Equity in (losses) earnings of affiliates		(3,446)		393		(3,839)		(4,802)		1,179		(5,981)
Other (expense) income, net		(1,509)		1,362		(2,871)		(2,720)		(3,727)		1,007
Equity in earnings (losses) of affiliates														Equity in earnings (losses) of affiliates	656		(3,446)		4,102		458		(4,802)		5,260
Loss on refinancing and extinguishment of debt														Loss on refinancing and extinguishment of debt	—		—		—		(81,885)		—		(81,885)
Other expense, net														Other expense, net	(2,561)		(1,509)		(1,052)		(6,565)		(2,720)		(3,845)
Loss before income taxes	Loss before income taxes	(32,146)		(81,988)		49,842		(93,284)		(115,765)		22,481		Loss before income taxes	(23,655)		(32,146)		8,491		(154,409)		(93,284)		(61,125)
Income tax expense (benefit)		2,005		(17,459)		19,464		2,657		(16,523)		19,180
Income tax expense														Income tax expense	4,765		2,005		2,760		5,123		2,657		2,466
Net loss	Net loss	(34,151)		(64,529)		30,378		(95,941)		(99,242)		3,301		Net loss	(28,420)		(34,151)		5,731		(159,532)		(95,941)		(63,591)
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	904		918		(14)		1,334		1,767		(433)		Net loss attributable to noncontrolling interests	591		904		(313)		1,336		1,334		2
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	30,364	$	(94,607)	$	(97,475)	$	2,868	Net loss attributable to Cooper-Standard Holdings Inc.	$	(27,829)	$	(33,247)	$	5,418	$	(158,196)	$	(94,607)	$	(63,589)

Three Months Ended June 30, ~~2022~~2023 Compared with Three Months Ended June 30, ~~2021~~2022

Sales


	Three Months Ended June 30,						Variance Due To:
	2023		2022		Change		Volume / Mix*		Foreign Exchange
	(dollar amounts in thousands)
Total sales	$	723,740	$	605,917	$	117,823	$	122,509	$	(4,686)

* Net of customer price adjustments, including recoveries.

Sales for the three months ended June 30, ~~2022~~2023 increased ~~13.6%~~19.4%, compared to the three months ended June 30, ~~2021.~~2022. The increase in sales was driven by volume and mix, ~~(higher net~~namely higher vehicle production volume due to the ~~impact~~stabilization of ~~lessening semiconductor~~the supply ~~issues in the current~~environment, elimination of prior year ~~partially offset by the impact of~~ COVID-19 related ~~shutdowns~~restrictions in China ~~and the Ukraine conflict in Europe~~ and net customer price adjustments including recovery of cost ~~increases).~~increases. This increase was partially offset by the negative impact of foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific region. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

Three Months Ended June 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 605,917 $ 533,185 $ 72,732 $ 101,878 $ (22,603) $ (6,543)

* Net of customer price adjustments, including recoveriesexchange.

2830

Gross Profit


		Three Months Ended June 30,								Variance Due To:							Three Months Ended June 30,								Variance Due To:
		2022			2021			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)**			2023			2022			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)
		(dollar amounts in thousands)															(dollar amounts in thousands)
Cost of products sold	Cost of products sold	$	590,541		$	534,118		$	56,423	$	46,920	$	(20,619)	$	30,122	Cost of products sold	$	646,026		$	590,541		$	55,485	$	67,332	$	1,582	$	(13,429)
Gross profit	Gross profit	15,376			(933)			16,309		54,958		(1,984)		(36,665)		Gross profit	77,714			15,376			62,338		55,177		(6,268)		13,429
Gross profit percentage of sales	Gross profit percentage of sales	2.5		%	(0.2)		%									Gross profit percentage of sales	10.7		%	2.5		%

* Net of customer price adjustments, including ~~recoveries~~recoveries.

** Net of deconsolidation

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation ~~warranty costs~~ and other direct operating expenses. The Company’s material cost of products sold was ~~approximately~~approximately 52% and 50% ~~and 45%~~ of total cost of products sold for the three months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The change in cost of products sold was impacted by higher volume and mix, ~~commodity~~net of recovery of cost increases, higher inflation ~~higher compensation related costs, higher~~of labor and overhead, ~~costs due to inconsistent volume production schedules, and~~ higher energy costs and ~~transportation costs.~~unfavorable foreign exchange. These costs were partially offset by ~~foreign exchange,~~manufacturing and purchasing savings through lean initiatives and ~~manufacturing efficiencies, and the deconsolidation of a joint venture in the Asia Pacific region.~~favorable commodity costs.

Gross profit for the three months ended June 30, ~~2022~~2023 increased ~~$16.3~~$62.3 million, compared to the three months ended June 30, ~~2021.~~2022. The change was driven by volume and mix, net of customer price adjustments including recovery of cost increases, manufacturing ~~efficiencies,~~ and purchasing savings through lean initiatives and ~~restructuring savings,~~favorable commodity costs, partially offset by ~~commodity~~wage and ~~wage~~energy inflation ~~higher energy and transportation costs~~ and foreign exchange.

Selling, Administration and Engineering ~~Expense.~~Expenses. Selling, administration and engineering ~~expense includes~~expenses include administrative expenses as well as product engineering and design and development costs. Selling, administration and engineering ~~expense~~expenses for the three months ended June 30, ~~2022~~2023 was ~~8.6%~~7.5% of sales compared to ~~9.4%~~8.6% for the three months ended June 30, ~~2021~~2022. The decrease was primarily ~~due to lower compensation costs~~ due to salaried headcount initiative savings and foreign exchange, partially offset by higher compensation related costs.

~~Loss on Sale of Business, Net~~. The loss on sale of business of $0.2 million for the three months ended June 30, 2021 related to the net effect of our 2020 divestitures. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Report for additional information.

Gain on Sale of Fixed Assets, ~~Net.~~ Net. The gain on sale of fixed assets for the three months ended June 30, 2022 was attributable to the gain on the sale-leaseback of a European facility of $33.4 million.

Amortization of Intangibles. Intangible amortization for the three months ended June 30, ~~2022~~2023 was comparable to the three months ended June 30, ~~2021.~~2022.

~~Restructuring.~~Restructuring Charges. Restructuring charges for the three months ended June 30, ~~2022 decreased $8.1~~2023 increased $5.0 million compared to the three months ended June 30, ~~2021.~~2022. The ~~decrease~~increase was primarily driven by ~~lower~~higher restructuring charges primarily in North America and Europe.

Impairment Charges. Non-cash impairment charges for the three months ended June 30, 2023 increased $0.7 million compared to the three months ended June 30, 2022, ~~decreased $0.8 million,~~ primarily due to impairments of certain assets in ~~Europe in the prior year period.~~Asia Pacific.

Interest Expense, Net. Net interest expense for the three months ended June 30, ~~2022 was comparable~~2023 increased $15.6 million compared to the three months ended June 30, ~~2021.~~2022, primarily due to an increase in interest rates on the new debt subsequent to the Refinancing Transactions (as further described in Liquidity and Capital Resources).

Other Expense, Net. Other expense, net, for the three months ended June 30, ~~2022 decreased $2.9~~2023 increased $1.1 million compared to the three months ended June 30, ~~2021,~~2022, primarily due to ~~the unfavorable impact of foreign exchange.~~increased net periodic benefit cost.

Income Tax Expense. Income tax expense for the three months ended June 30, ~~2022~~2023 was $4.8 million on losses before income taxes of $23.7 million compared to an income tax expense of $2.0 million on losses before income taxes of $32.1 million ~~compared to an income tax benefit of $17.5 million on losses before income taxes of $82.0 million~~ for the three months ended June 30, ~~2021.~~2022. The effective tax rate for the three months ended June 30, ~~2022~~2023 differed from the effective tax rate for the three months ended June 30, ~~2021~~2022 primarily due to the geographic mix of pre-tax losses, the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, and other permanent items, which included discrete ~~tax~~ impacts onof the gain on sale ~~transaction~~ in Europe and other tax reserve changes during the ~~three-month period~~three months ended June 30, 2022.

2931

Six Months Ended June 30, ~~2022~~2023 Compared with Six Months Ended June 30, ~~2021~~2022

Sales


	Six Months Ended June 30,						Variance Due To:
	2023		2022		Change		Volume / Mix*		Foreign Exchange
	(dollar amounts in thousands)
Total sales	$	1,406,198	$	1,218,901	$	187,297	$	208,919	$	(21,622)

* Net of customer price adjustments, including recoveries.

Sales for the six months ended June 30, ~~2022~~2023 increased ~~1.4%~~15.4%, compared to the six months ended June 30, ~~2021.~~2022. The increase in sales was driven by volume and mix, ~~(higher net~~namely higher vehicle production volume due to the ~~impact~~stabilization of ~~lessening semiconductor~~the supply ~~issues~~environment, elimination of prior year COVID-19 related restrictions in ~~the current year, partially offset by the impact of COVID-19 in~~ China ~~and the Ukraine conflict in Europe~~ and net customer price adjustments including recovery of cost ~~increases).~~increases. This increase was partially offset by the negative impact of foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific region. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.exchange.

Six Months Ended June 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 1,218,901 $ 1,202,152 $ 16,749 $ 64,424 $ (32,662) $ (15,013)

Gross Profit


	Six Months Ended June 30,								Variance Due To:
	2023			2022			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)
	(dollar amounts in thousands)
Cost of products sold	$	1,286,656		$	1,181,983		$	104,673	$	114,325	$	(11,072)	$	1,420
Gross profit	119,542			36,918			82,624		94,594		(10,550)		(1,420)
Gross profit percentage of sales	8.5		%	3.0		%

* Net of customer price adjustments, including ~~recoveries~~

~~Gross Profit~~

Six Months Ended June 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Cost Increases / (Decreases)**
(dollar amounts in thousands)
Cost of products sold $ 1,181,983 $ 1,134,793 $ 47,190 $ 13,588 $ (28,035) $ 61,637
Gross profit 36,918 67,359 (30,441) 50,836 (4,627) (76,650)
Gross profit percentage of sales 3.0 % 5.6 %

* Net of customer price adjustments, including recoveries

** Net of deconsolidationrecoveries.

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation, warranty costs and other direct operating expenses. The Company’s material cost of products sold was approximately ~~50%~~52% and ~~47%~~50% of total cost of products sold for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The change in ~~the~~ cost of products sold was impacted by ~~commodity inflation,~~ higher volume and mix, net of recovery of cost increases, higher ~~compensation related costs, increased~~inflation of labor and overhead ~~costs due to inconsistent volume production schedules,~~ and higher energy ~~and transportation~~ costs. These costs were partially offset by manufacturing and purchasing savings through lean initiatives, favorable foreign exchange ~~purchasing lean~~ and ~~manufacturing efficiencies, restructuring savings and the deconsolidation of a joint venture in the Asia Pacific region.~~commodity costs.

Gross profit for the six months ended June 30, ~~2022 decreased 45.2%~~2023 increased 223.8%, compared to the six months ended June 30, ~~2021.~~2022. The change was driven by ~~commodity and wage inflation and the non-recurrence of prior year COVID-19 government incentives. These items were partially offset by~~ volume and mix, net of customer price adjustments including recovery of cost increases, manufacturing and purchasing savings through lean initiatives and favorable ~~operational performance, lower variable employee compensation expenses, purchasing lean savings, restructuring savings,~~commodity costs, partially offset by wage and ~~the prior year divestiture of our European rubber fluid transfer~~energy inflation and ~~specialty sealing businesses and Indian operations.~~foreign exchange.

Selling, Administration and Engineering ~~Expense.~~Expenses. Selling, administration and engineering ~~expense includes~~expenses include administrative expenses as well as product engineering and design and development costs. ~~Sales,~~Selling, administration and engineering ~~expense~~expenses for the six months ended June 30, ~~2022~~2023 was ~~8.5%~~7.6% of sales compared to ~~9.0%~~8.5% for the six months ended June 30, ~~2021.~~2022. The decrease was primarily due to salaried headcount initiative savings ~~customer recovery of engineering expense,~~ and foreign exchange, partially offset by higher compensation related costs.

~~Loss (Gain) on Sale of Business, Net.~~ ~~The gain on sale of business, net of $0.7 million for the six months ended June 30, 2021 related to the net effect of our 2020 divestitures.~~

Gain on Sale of Fixed Assets, Net. The gain on sale of fixed assets for the six months ended June 30, 2022 was attributable to the gain on the sale-leaseback of a European facility of $33.4 million.

Amortization of Intangibles. Intangible amortization for the six months ended June 30, ~~2022~~2023 was comparable to the six months ended June 30, ~~2021.~~2022.

~~Restructuring.~~Restructuring Charges. Restructuring charges for the six months ended June 30, ~~2022~~2023 decreased ~~$21.4~~$0.4 million compared to the six months ended June 30, ~~2021.~~2022. The decrease was primarily driven by lower restructuring charges in ~~Europe.~~Europe partially offset by higher restructuring charges in North America.

Impairment Charges. Impairment charges for the six months ended June 30, ~~2022 decreased $0.4~~2023 increased $0.2 million, as compared to the six months ended June 30, ~~2021.~~2022. The ~~decrease~~increase was driven by the impairment of certain assets in Asia Pacific offset in part by lower impairment charges in Europe in the current year period.

Interest Expense, Net. Net interest expense for the six months ended June 30, 2023 increased $27.6 million compared to the six months ended June 30, 2022, primarily due to an increase in interest rates on the new debt subsequent to the Refinancing Transactions (as further described in Liquidity and Capital Resources).

Loss on Refinancing and Extinguishment of Debt. Loss on refinancing and extinguishment of debt for the six months ended June 30, 2023 was ~~relatively consistent with~~$81.9 million, which resulted from certain fees and the ~~prior year period.~~partial write off of new and unamortized debt issuance costs and unamortized original issue discount related to the Refinancing Transactions.

Other Expense, Net. Other expense for the six months ended June 30, ~~2022 decreased $1.0~~2023 increased $3.8 million compared to the six months ended June 30, ~~2021,~~2022, primarily due to ~~favorable~~the unfavorable impact of foreign currency exchange and increased net periodic benefit cost, offset in part by a loss on ~~deconsolidation.~~deconsolidation in the prior year period.

Income Tax ~~Expense (Benefit).~~Expense. Income tax expense for the six months ended June 30, ~~2022~~2023 was $5.1 million on losses before income taxes of $154.4 million compared to income tax expense of $2.7 million on losses before income taxes of $93.3 million ~~compared to income tax benefit of $16.5 million on losses before income taxes of $115.8 million~~ for the six months ended June 30, ~~2021.~~2022. The effective tax rate for the six months ended June 30, ~~2022~~2023 differed primarily from the effective tax rate for the six months ended June 30, ~~2021~~2022 due to the geographic mix of pre-tax losses, the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, and other permanent items which included discrete tax impacts of the gain on sale transaction in Europe and other tax reserve changes during the ~~six-month period~~six months ended June 30, 2022.

Segment Results of Operations

Our business is organized into the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company uses ~~Segment~~segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We have defined adjusted EBITDA as net income before interest, taxes, depreciation, amortization, restructuring expense, and special items.

The following tables present sales and segment adjusted EBITDA for each of the reportable segments.

Three Months Ended June 30, ~~2022~~2023 Compared with Three Months Ended June 30, ~~2021~~2022

Sales


		Three Months Ended June 30,						Variance Due To:							Three Months Ended June 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2023		2022		Change		Volume/ Mix*		Foreign Exchange
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	331,687	$	247,525	$	84,162	$	85,220	$	(1,058)	$	—	North America	$	368,810	$	331,687	$	37,123	$	39,691	$	(2,568)
Europe	Europe	126,287		132,621		(6,334)		10,499		(16,833)		—		Europe	177,897		126,287		51,610		47,513		4,097
Asia Pacific	Asia Pacific	85,779		103,915		(18,136)		(6,741)		(4,852)		(6,543)		Asia Pacific	111,222		85,779		25,443		31,750		(6,307)
South America	South America	26,261		14,153		12,108		10,319		1,789		—		South America	33,514		26,261		7,253		7,460		(207)
Total Automotive	Total Automotive	570,014		498,214		71,800		99,297		(20,954)		(6,543)		Total Automotive	691,443		570,014		121,429		126,414		(4,985)
Corporate, eliminations and other	Corporate, eliminations and other	35,903		34,971		932		2,581		(1,649)		—		Corporate, eliminations and other	32,297		35,903		(3,606)		(3,905)		299
Consolidated	Consolidated	$	605,917	$	533,185	$	72,732	$	101,878	$	(22,603)	$	(6,543)	Consolidated	$	723,740	$	605,917	$	117,823	$	122,509	$	(4,686)

* Net of customer price adjustments, including recoveries.

•Volume and mix, net of customer price adjustments including recoveries, was mainly driven by vehicle production volume increases due to the stabilization of the supply environment and elimination of prior year COVID-19 related restrictions in China.

•The impact of foreign currency exchange was primarily related to the Chinese Renminbi, Euro and Canadian Dollar.

Segment adjusted EBITDA


	Three Months Ended June 30,						Variance Due To:
	2023		2022		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases
	(dollar amounts in thousands)
Segment adjusted EBITDA
North America	$	23,849	$	15,441	$	8,408	$	11,632	$	(8,280)	$	5,056
Europe	16,260		(15,316)		31,576		31,036		(1,559)		2,099
Asia Pacific	7,194		(7,799)		14,993		9,700		2,093		3,200
South America	3,375		(1,298)		4,673		2,194		1,679		800
Total Automotive	50,678		(8,972)		59,650		54,562		(6,067)		11,155
Corporate, eliminations and other	(2,739)		(1,402)		(1,337)		615		100		(2,052)
Consolidated adjusted EBITDA	$	47,939	$	(10,374)	$	58,313	$	55,177	$	(5,967)	$	9,103

* Net of customer price adjustments, including recoveries.

•Volume and mix, net of customer price adjustments including recoveries, was driven by vehicle production volume increases due to the ~~lessening impact~~stabilization of ~~semiconductor-related~~the supply ~~issues, partially offset by the impact~~environment and elimination of prior year COVID-19 ~~shutdowns~~related restrictions in China ~~and the Ukraine conflict in Europe.~~.

•The impact of foreign currency exchange was primarily related to the ~~Euro, Chinese Renminbi, Korean Won~~Mexican Peso, Canadian Dollar and ~~Brazilian Real.~~

~~Segment adjusted EBITDA~~

Three Months Ended June 30, Variance Due To:
2022 2021 Change
Volume/ Mix*
Foreign Exchange Cost (Increases)/ Decreases**
(dollar amounts in thousands)
Segment adjusted EBITDA
North America $ 15,441 $ 756 $ 14,685 $ 34,180 $ (723) $ (18,772)
Europe (15,316) (14,391) (925) 11,328 2,096 (14,349)
Asia Pacific (7,799) (2,302) (5,497) 3,862 (2,688) (6,671)
South America (1,298) (726) (572) 2,967 (2,297) (1,242)
Total Automotive (8,972) (16,663) 7,691 52,337 (3,612) (41,034)
Corporate, eliminations and other (1,402) 1,937 (3,339) 2,621 (124) (5,836)
Consolidated adjusted EBITDA $ (10,374) $ (14,726) $ 4,352 $ 54,958 $ (3,736) $ (46,870)

* ~~Net of customer price adjustments, including recoveries~~

** ~~Net of deconsolidation~~

•Volume and mix, net of customer price adjustments, including recoveries, was driven by vehicle production volume increases due to a lessening impact on customer production schedules for semi-conductor-related supply issues in the current year period partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.

•~~The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi, Korean Won and Brazilian Real.~~Polish Zloty.

•The Cost (Increases) / Decreases category above includes:

◦Commodity cost and inflationary economics; and

◦Manufacturing ~~efficiencies~~ and purchasing savings through lean ~~initiatives;~~

◦~~Increased compensation-related expenses; and~~

◦~~Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.~~initiatives.

Six Months Ended June 30, ~~2022~~2023 Compared with Six Months Ended June 30, ~~2021~~2022

Sales


		Six Months Ended June 30,						Variance Due To:							Six Months Ended June 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2023		2022		Change		Volume/ Mix*		Foreign Exchange
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	653,581	$	586,561	$	67,020	$	68,396	$	(1,376)	$	—	North America	$	733,937	$	653,581	$	80,356	$	85,095	$	(4,739)
Europe	Europe	257,701		298,397		(40,696)		(14,121)		(26,575)		—		Europe	339,752		257,701		82,051		85,184		(3,133)
Asia Pacific	Asia Pacific	189,532		218,140		(28,608)		(8,535)		(5,060)		(15,013)		Asia Pacific	206,007		189,532		16,475		29,793		(13,318)
South America	South America	47,780		29,639		18,141		15,228		2,913		—		South America	62,355		47,780		14,575		14,771		(196)
Total Automotive	Total Automotive	1,148,594		1,132,737		15,857		60,968		(30,098)		(15,013)		Total Automotive	1,342,051		1,148,594		193,457		214,843		(21,386)
Corporate, eliminations and other	Corporate, eliminations and other	70,307		69,415		892		3,456		(2,564)		—		Corporate, eliminations and other	64,147		70,307		(6,160)		(5,924)		(236)
Consolidated	Consolidated	$	1,218,901	$	1,202,152	$	16,749	$	64,424	$	(32,662)	$	(15,013)	Consolidated	$	1,406,198	$	1,218,901	$	187,297	$	208,919	$	(21,622)

* Net of customer price adjustments, including recoveries.

•The impact of foreign currency exchange was primarily related to the Chinese Renminbi, Canadian Dollar and Euro.

Segment adjusted EBITDA


	Six Months Ended June 30,						Variance Due To:
	2023		2022		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases
	(dollar amounts in thousands)
Segment adjusted EBITDA
North America	$	49,723	$	32,937	$	16,786	$	31,430	$	(11,974)	$	(2,670)
Europe	3,865		(29,973)		33,838		46,479		(3,237)		(9,404)
Asia Pacific	8,884		(8,541)		17,425		9,484		335		7,606
South America	5,303		(1,707)		7,010		5,511		1,335		164
Total Automotive	67,775		(7,284)		75,059		92,904		(13,541)		(4,304)
Corporate, eliminations and other	(7,379)		(2,945)		(4,434)		1,690		(98)		(6,026)
Consolidated adjusted EBITDA	$	60,396	$	(10,229)	$	70,625	$	94,594	$	(13,639)	$	(10,330)

*Net of customer price adjustments, including recoveries.

•Volume and mix, net of customer price adjustments including recoveries, was mainly driven by vehicle production volume increases due to ~~a lessening impact on customer production schedules for semi-conductor related supply issues in the~~

~~current year period partially offset by~~ the ~~impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.~~

•~~The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi, Korean Won and Brazilian Real.~~

~~Segment adjusted EBITDA~~

Six Months Ended June 30, Variance Due To:
2022 2021 Change Volume/ Mix* Foreign Exchange Cost (Increases)/ Decreases**
(dollar amounts in thousands)
Segment adjusted EBITDA
North America $ 32,937 $ 41,989 $ (9,052) $ 27,170 $ (502) $ (35,720)
Europe (29,973) (15,880) (14,093) 8,260 2,340 (24,693)
Asia Pacific (8,541) 1,250 (9,791) 4,019 (2,589) (11,221)
South America (1,707) (3,334) 1,627 4,529 1,121 (4,023)
Total Automotive (7,284) 24,025 (31,309) 43,978 370 (75,657)
Corporate, eliminations and other (2,945) (211) (2,734) 6,858 347 (9,939)
Consolidated adjusted EBITDA $ (10,229) $ 23,814 $ (34,043) $ 50,836 $ 717 $ (85,596)

* ~~Net of customer price adjustments, including recoveries~~

** ~~Net of deconsolidation~~

•~~Volume and mix, net of customer price adjustments, including recoveries, was driven by vehicle production volume increases due to a lessening impact on vehicle manufacturers~~stabilization of the ~~semi-conductor~~supply environment and elimination of prior year COVID-19 related ~~supply issues partially offset by the impact of COVID-19 shutdowns~~restrictions in China ~~and the Ukraine conflict in Europe.~~.

•The impact of foreign currency exchange was primarily related to ~~the Euro, Chinese Renminbi, Korean Won~~Mexican Peso and ~~Brazilian Real.~~Polish Zloty.

•The Cost (Increases) / Decreases category above includes:

◦Commodity cost and inflationary economics; and

◦Manufacturing ~~efficiencies~~ and purchasing savings through lean ~~initiatives;~~

◦~~Increased compensation-related expenses; and~~

◦~~Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.~~initiatives.

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks

~~We intend~~The sources to fund our ongoing working capital, capital expenditures, debt service and other funding requirements ~~through~~are a combination of cash flows from operations, cash on hand, borrowings under our senior asset-based revolving credit facility (“ABL Facility”) and receivables factoring. The Company utilizes intercompany loans and equity contributions to fund its worldwide operations. There may be country-specific regulations which may restrict or result in increased costs in the repatriation of these funds. See Note ~~9. “Debt”~~7. “Debt and Other Financing” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

We continue to actively preserve cash and enhance liquidity, including decreasing our capital expenditures ~~and improving working capital. Based on those actions and current projections~~as a percent of OEM customer production, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital, capital expenditures and debt service requirements for the next twelve months, despite the challenges presented by the COVID-19 pandemic and supply chain issues facing the industry.sales. We continuously monitor and forecast our liquidity situation, in light of automotive industry, customer and economic factors, and take the necessary actions to preserve our liquidity and evaluate other financial alternatives that may be available to us should the need arise. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with the financial covenants, including borrowing base limitations, under our ABL Facility, depend on our future operating performance and cash flows and many factors outside of our control, including the costs of raw materials, the state of the overall automotive industry and financial and economic conditions, including the continued impact of COVID-19, and other factors. Based on those actions and current projections of light vehicle production and customer demand for our products, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital requirements, capital expenditures, debt service and other funding requirements for the foreseeable future, despite the challenges facing the industry.

Refinancing Transactions

On January 27, 2023 (the “Settlement Date”), the Company, Cooper-Standard Automotive Inc. (the “Issuer”), a wholly-owned subsidiary of the Company, and certain other of the Company’s direct and indirect subsidiaries completed certain refinancing transactions (the “Refinancing Transactions”) consisting of: (i) the exchange (the “Exchange Offer”) of $357,446 aggregate principal amount of the Issuer’s then existing 5.625% Senior Notes due 2026 (the “2026 Senior Notes”) (representing 89.36% of the aggregate principal amount outstanding of the 2026 Senior Notes) for $357,446 aggregate principal amount of the Issuer’s newly issued 5.625% Cash Pay / 10.625% PIK Toggle Senior Secured Third Lien Notes due 2027 (the “Third Lien

3335

~~Our~~Notes”), (ii) the issuance by the Issuer (the “Concurrent Notes Offering”) of $580,000 aggregate principal amount of 13.50% Cash Pay / PIK Toggle Senior Secured First Lien Notes due 2027 (the “First Lien Notes” and, together with the Third Lien Notes, the “New Notes”) to holders of 2026 Senior Notes or their designees who participated in the Exchange Offer, including to certain backstop commitment parties who committed to purchase the First Lien Notes not otherwise subscribed for, (iii) the related consent solicitation (the “Consent Solicitation”) to remove substantially all of the covenants, certain events of default and certain other provisions contained in the 2026 Senior Notes and the indenture governing the 2026 Senior Notes and to release and discharge the guarantee of the 2026 Senior Notes by the Company, (iv) the effectiveness of the Third Amendment (as defined below) to the senior asset-based revolving credit facility (“ABL Facility”) and (v) the use of proceeds from the Concurrent Notes Offering, together with cash on hand, to prepay all amounts outstanding under the Term Loan Facility ~~matures~~at par, plus any accrued and unpaid interest thereon, to redeem the Issuer’s existing 2024 Senior Secured Notes (as defined below), including the prepayment premium and any accrued and unpaid interest thereon, and to pay fees and expenses related to the Refinancing Transactions. As a result of the Refinancing Transactions, the Issuer extended the maturities of its indebtedness and reduced the amount of cash interest it is required to pay on ~~November 2,~~such indebtedness for the next two years. The Company recognized a loss on the refinancing and extinguishment of debt of $81,885 during the six months ended June 30, 2023. Additionally, the Company incurred total fees of $91,800 associated with the Refinancing Transactions, of which $86,841 were paid during the six months ended June 30, 2023, $4,237 were paid during 2022 and $722 are recorded in accounts payable in the condensed consolidated balance sheet as of June 30, 2023 and will be paid in future periods. The fees paid during the six months ended June 30, 2023 are reflected as a financing outflow in the condensed consolidated statement of cash flows. Of the fees paid during the six months ended June 30, 2023, $73,376 was included in the loss on the refinancing and extinguishment of debt referenced above, $12,465 is presented as a direct deduction from the principal balance in the condensed consolidated balance sheet, and $1,000 related to amending the ABL Facility is recorded in other long-term assets in the condensed consolidated balance sheet.

New Notes

The First Lien Notes will mature on March 31, 2027. The First Lien Notes bear interest at the rate of 13.50% per annum, payable in cash; provided, however, that for the first four interest periods after the Settlement Date, the Issuer has the option, in its sole discretion, to pay up to 4.50% of such interest on the First Lien Notes, in such amount as specified by the Issuer, by increasing the principal amount of the outstanding First Lien Notes or, in limited circumstances as described in the First Lien Notes Indenture, by issuing additional First Lien Notes. As of June 30, 2023, the aggregate principal amount of the First Lien Notes of $581,353 recognized in the condensed consolidated balance sheet reflects the election that was made by the Company to pay 4.50% of the first interest payment as payment-in-kind. The Company has ~~retained Goldman Sachs & Co. LLC~~also elected to pay 4.50% of the second interest payment as payment-in-kind. Interest on the First Lien Notes is payable semi-annually in arrears on June 15 and December 15 of each year, and commenced on June 15, 2023.

As of June 30, 2023, the Company had $9,443 of unamortized debt issuance costs and $388 of unamortized original issue discount related to the First Lien Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheet. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the First Lien Notes.

The Third Lien Notes will mature on May 15, 2027. The Third Lien Notes bear interest at the rate of 5.625% per annum, payable in cash; provided, however, that for the first four interest periods after the Settlement Date, the Issuer has the option, in its sole discretion, to instead pay such interest at 10.625% per annum either by increasing the principal amount of the outstanding Third Lien Notes or, in limited circumstances as described the Third Lien Notes Indenture, by issuing additional Third Lien Notes. As of June 30, 2023, the aggregate principal amount of the Third Lien Notes of $367,930 recognized in the condensed consolidated balance sheet reflects the election that was made by the Company to fully pay the first interest payment on the Third Lien Notes as payment-in-kind. The Company has also elected to pay the second interest payment as payment-in-kind. Interest on the Third Lien Notes is payable semi-annually in arrears on June 15 and December 15 of each year, and commenced on June 15, 2023.

For additional information regarding the guarantees, covenants and events of default with respect to the New Notes, see Note 7. “Debt and Other Financing” to the unaudited condensed consolidated financial ~~advisor~~statements included in Part I, Item 1 of this Report.

2026 Senior Notes

On November 2, 2016, the Issuer issued $400,000 aggregate principal amount of 2026 Senior Notes. On the Settlement Date, in connection with the Refinancing Transactions, the Issuer completed the Exchange Offer and delivered $357,446 aggregate principal amount of the exchanged 2026 Senior Notes to ~~analyze, evaluate~~the trustee for cancellation. Following the completion of the Exchange Offer, $42,554 aggregate principal amount of the 2026 Senior Notes remain outstanding.

The Company paid approximately $7,055 of debt issuance costs in connection with the issuance of the 2026 Senior Notes. The debt issuance costs are being amortized into interest expense over the term of the 2026 Senior Notes. As of June 30, 2023 and December 31, 2022, the Company had $254 and $2,741 of unamortized debt issuance costs related to the 2026 Senior Notes, which is presented as a ~~refinancing~~direct deduction from the principal balance in the condensed consolidated balance sheets.

2024 Senior Secured Notes

On May 29, 2020, the Issuer issued $250,000 aggregate principal amount of its 13.000% Senior Secured Notes due 2024 (the “2024 Senior Secured Notes”), pursuant to an indenture, dated as of May 29, 2020, by and among the Issuer, the other guarantors party thereto and U.S. Bank National Association, as trustee. In the first quarter of 2023, in connection with the Refinancing Transactions, the Issuer redeemed all of the outstanding 2024 Senior Secured Notes on the Settlement Date at the redemption price of 106.500% of the principal amount thereof, plus accrued and unpaid interest thereon.