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 September 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 October ~~26, 2022,~~27, 2023, there were ~~17,108,029~~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 September 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Sales $ 657,153 $ 526,690 $ 1,876,054 $ 1,728,842
Cost of products sold 618,594 534,817 1,800,577 1,669,610
Gross profit (loss) 38,559 (8,127) 75,477 59,232
Selling, administration & engineering expenses 44,847 60,367 149,033 168,506
Gain on sale of business, net — — — (696)
Gain on sale of fixed assets, net — — (33,391) —
Amortization of intangibles 1,693 1,819 5,176 5,524
Restructuring charges 1,701 1,573 13,014 34,251
Impairment charges 379 1,006 837 1,847
Operating loss (10,061) (72,892) (59,192) (150,200)
Interest expense, net of interest income (20,747) (18,243) (57,378) (54,152)
Equity in (losses) earnings of affiliates (3,391) (1,114) (8,193) 65
Other income (expense), net 146 (494) (2,574) (4,221)
Loss before income taxes (34,053) (92,743) (127,337) (208,508)
Income tax (benefit) expense (833) 32,121 1,824 15,598
Net loss (33,220) (124,864) (129,161) (224,106)
Net loss attributable to noncontrolling interests 534 1,691 1,868 3,458
Net loss attributable to Cooper-Standard Holdings Inc. $ (32,686) $ (123,173) $ (127,293) $ (220,648)
Loss per share:
Basic $ (1.90) $ (7.20) $ (7.41) $ (12.96)
Diluted $ (1.90) $ (7.20) $ (7.41) $ (12.96)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales	$	736,038	$	657,153	$	2,142,236	$	1,876,054
Cost of products sold	629,504		618,594		1,916,160		1,800,577
Gross profit	106,534		38,559		226,076		75,477
Selling, administration & engineering expenses	49,834		44,847		156,528		149,033
Loss on sale of businesses, net	334		—		334		—

Gain on sale of fixed assets, net	—		—		—		(33,391)
Amortization of intangibles	1,662		1,693		5,141		5,176
Restructuring charges	2,046		1,701		12,924		13,014

Impairment charges	—		379		654		837
Operating profit (loss)	52,658		(10,061)		50,495		(59,192)
Interest expense, net of interest income	(33,803)		(20,747)		(98,057)		(57,378)
Equity in earnings (losses) of affiliates	682		(3,391)		1,140		(8,193)
Loss on refinancing and extinguishment of debt	—		—		(81,885)		—
Other (expense) income, net	(3,816)		146		(10,381)		(2,574)
Income (loss) before income taxes	15,721		(34,053)		(138,688)		(127,337)
Income tax expense (benefit)	4,338		(833)		9,461		1,824
Net income (loss)	11,383		(33,220)		(148,149)		(129,161)
Net (income) loss attributable to noncontrolling interests	(20)		534		1,316		1,868
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	11,363	$	(32,686)	$	(146,833)	$	(127,293)

Income (loss) per share:
Basic	$	0.65	$	(1.90)	$	(8.47)	$	(7.41)
Diluted	$	0.65	$	(1.90)	$	(8.47)	$	(7.41)

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

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(Unaudited)

(Dollar amounts in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Net loss $ (33,220) $ (124,864) $ (129,161) $ (224,106)
Other comprehensive income (loss):
Currency translation adjustment (18,960) (6,215) (27,679) (4,074)
Benefit plan liabilities adjustment, net of tax 2,398 4,978 5,445 8,328
Fair value change of derivatives, net of tax 2,422 (2,132) 3,830 (1,952)
Other comprehensive (loss) income, net of tax (14,140) (3,369) (18,404) 2,302
Comprehensive loss (47,360) (128,233) (147,565) (221,804)
Comprehensive loss attributable to noncontrolling interests 185 1,916 1,253 3,744
Comprehensive loss attributable to Cooper-Standard Holdings Inc. $ (47,175) $ (126,317) $ (146,312) $ (218,060)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	11,383	$	(33,220)	$	(148,149)	$	(129,161)
Other comprehensive loss:
Currency translation adjustment	(3,296)		(18,960)		(10,278)		(27,679)
Benefit plan liabilities adjustment, net of tax	45		2,398		287		5,445
Fair value change of derivatives, net of tax	(4,821)		2,422		(3,052)		3,830
Other comprehensive loss, net of tax	(8,072)		(14,140)		(13,043)		(18,404)
Comprehensive income (loss)	3,311		(47,360)		(161,192)		(147,565)
Comprehensive loss attributable to noncontrolling interests	718		185		1,671		1,253
Comprehensive income (loss) attributable to Cooper-Standard Holdings Inc.	$	4,029	$	(47,175)	$	(159,521)	$	(146,312)

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)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	231,177	$	248,010	Cash and cash equivalents	$	204,848	$	186,875
Accounts receivable, net	Accounts receivable, net	366,824		317,469		Accounts receivable, net	450,963		358,700
Tooling receivable, net	Tooling receivable, net	93,832		88,900		Tooling receivable, net	91,818		95,965
Inventories	Inventories	195,003		158,075		Inventories	181,050		157,756
Prepaid expenses	Prepaid expenses	31,348		26,313		Prepaid expenses	28,639		31,170
Income tax receivable and refundable credits	Income tax receivable and refundable credits	12,474		82,813		Income tax receivable and refundable credits	11,530		13,668
Other current assets	Other current assets	74,525		73,317		Other current assets	95,106		101,515

Total current assets	Total current assets	1,005,183		994,897		Total current assets	1,063,954		945,649
Property, plant and equipment, net	Property, plant and equipment, net	667,117		784,348		Property, plant and equipment, net	608,554		642,860
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	95,803		111,052		Operating lease right-of-use assets, net	85,007		94,571
Goodwill	Goodwill	141,958		142,282		Goodwill	140,710		142,023
Intangible assets, net	Intangible assets, net	48,413		60,375		Intangible assets, net	41,975		47,641

Other assets	Other assets	143,727		133,539		Other assets	88,800		90,785
Total assets	Total assets	$	2,102,201	$	2,226,493	Total assets	$	2,029,000	$	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	$	48,890	$	56,111	Debt payable within one year	$	169,349	$	54,130
Accounts payable	Accounts payable	373,481		348,133		Accounts payable	372,657		338,210
Payroll liabilities	Payroll liabilities	94,712		69,353		Payroll liabilities	114,320		99,029

Accrued liabilities	Accrued liabilities	130,257		101,466		Accrued liabilities	130,156		119,463
Current operating lease liabilities	Current operating lease liabilities	20,172		22,552		Current operating lease liabilities	18,634		20,786

Total current liabilities	Total current liabilities	667,512		597,615		Total current liabilities	805,116		631,618
Long-term debt	Long-term debt	978,435		980,604		Long-term debt	1,029,068		982,054
Pension benefits	Pension benefits	113,521		129,880		Pension benefits	99,096		98,481
Postretirement benefits other than pensions	Postretirement benefits other than pensions	40,960		43,498		Postretirement benefits other than pensions	30,678		31,014

Long-term operating lease liabilities	Long-term operating lease liabilities	79,222		92,760		Long-term operating lease liabilities	70,237		77,617
Other liabilities	Other liabilities	47,289		50,776		Other liabilities	52,181		41,553
Total liabilities	Total liabilities	1,926,939		1,895,133		Total liabilities	2,086,376		1,862,337

Equity:	Equity:					Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,173,838 shares issued and 17,108,029 shares outstanding as of September 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; 19,263,288 shares issued and 17,197,479 shares outstanding as of September 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; 19,263,288 shares issued and 17,197,479 shares outstanding as of September 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	506,971		504,497		Additional paid-in capital	510,122		507,498
Retained (loss) earnings		(101,740)		25,553
Retained deficit						Retained deficit	(336,664)		(189,831)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(224,203)		(205,184)		Accumulated other comprehensive loss	(222,659)		(209,971)
Total Cooper-Standard Holdings Inc. equity	Total Cooper-Standard Holdings Inc. equity	181,045		324,883		Total Cooper-Standard Holdings Inc. equity	(49,184)		107,713
Noncontrolling interests	Noncontrolling interests	(5,783)		6,477		Noncontrolling interests	(8,192)		(6,521)
Total equity	Total equity	175,262		331,360		Total equity	(57,376)		101,192
Total liabilities and equity	Total liabilities and equity	$	2,102,201	$	2,226,493	Total liabilities and equity	$	2,029,000	$	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	6,908	—		909		—		—		909		—		909		Share-based compensation, net	58,035	—		868		—		—		868		—		868

Net loss	Net loss	—	—		—		(32,686)		—		(32,686)		(534)		(33,220)		Net loss	—	—		—		(27,829)		—		(27,829)		(591)		(28,420)
Other comprehensive income (loss)		—	—		—		—		(14,489)		(14,489)		349		(14,140)
Balance as of September 30, 2022		17,108,029	$	17	$	506,971	$	(101,740)	$	(224,203)	$	181,045	$	(5,783)	$	175,262
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)

Share-based compensation, net																	Share-based compensation, net	926	—		1,016		—		—		1,016		—		1,016

Net income																	Net income	—	—		—		11,363		—		11,363		20		11,383
Other comprehensive loss																	Other comprehensive loss	—	—		—		—		(7,334)		(7,334)		(738)		(8,072)
Balance as of September 30, 2023																	Balance as of September 30, 2023	17,197,479	$	17	$	510,122	$	(336,664)	$	(222,659)	$	(49,184)	$	(8,192)	$	(57,376)

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
Share-based compensation, net 2,116 — 1,516 — — 1,516 — 1,516
Net loss — — — (123,173) — (123,173) (1,691) (124,864)
Other comprehensive loss — — — — (3,144) (3,144) (225) (3,369)
Balance as of September 30, 2021 16,990,630 $ 17 $ 502,864 $ 129,622 $ (239,308) $ 393,195 $ 13,257 $ 406,452


	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


Share-based compensation, net	6,908	—		909		—		—		909		—		909

Net loss	—	—		—		(32,686)		—		(32,686)		(534)		(33,220)
Other comprehensive (loss) income	—	—		—		—		(14,489)		(14,489)		349		(14,140)
Balance as of September 30, 2022	17,108,029	$	17	$	506,971	$	(101,740)	$	(224,203)	$	181,045	$	(5,783)	$	175,262

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)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Operating Activities:	Operating Activities:					Operating Activities:
Net loss	Net loss	$	(129,161)	$	(224,106)	Net loss	$	(148,149)	$	(129,161)
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	88,997		99,497		Depreciation	77,876		88,997
Amortization of intangibles	Amortization of intangibles	5,176		5,524		Amortization of intangibles	5,141		5,176
Gain on sale of business, net		—		(696)
Loss on sale of businesses, net						Loss on sale of businesses, net	334		—

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	837		1,847		Impairment charges	654		837
Share-based compensation expense	Share-based compensation expense	2,593		4,781		Share-based compensation expense	4,071		2,593
Equity in losses of affiliates, net of dividends related to earnings	Equity in losses of affiliates, net of dividends related to earnings	11,195		2,146		Equity in losses of affiliates, net of dividends related to earnings	1,159		11,195

Loss on refinancing and extinguishment of debt						Loss on refinancing and extinguishment of debt	81,885		—
Payment-in-kind interest						Payment-in-kind interest	44,019		—
Deferred income taxes	Deferred income taxes	(5,478)		9,785		Deferred income taxes	(586)		(5,478)
Other	Other	2,383		2,219		Other	3,606		2,383
Changes in operating assets and liabilities	Changes in operating assets and liabilities	46,489		(12,485)		Changes in operating assets and liabilities	(32,394)		46,489
Net cash used in operating activities		(10,360)		(111,488)
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	37,616		(10,360)
Investing activities:	Investing activities:					Investing activities:
Capital expenditures	Capital expenditures	(58,491)		(75,965)		Capital expenditures	(63,184)		(58,491)
Proceeds from sale of businesses, net of cash divested						Proceeds from sale of businesses, net of cash divested	15,351		—

Proceeds from sale of fixed assets	Proceeds from sale of fixed assets	52,956		3,095		Proceeds from sale of fixed assets	—		52,956
Other	Other	167		35		Other	358		167
Net cash used in investing activities	Net cash used in investing activities	(5,368)		(72,835)		Net cash used in investing activities	(47,475)		(5,368)
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	924,299		—
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	(3,786)		(4,227)		Principal payments on long-term debt	(1,613)		(3,786)
Borrowings on revolving credit facility, net						Borrowings on revolving credit facility, net	120,000		—
Decrease in short-term debt, net	Decrease in short-term debt, net	(977)		(597)		Decrease in short-term debt, net	(1,241)		(977)

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	(607)		(777)		Taxes withheld and paid on employees' share-based payment awards	(214)		(607)
Other	Other	(688)		884		Other	(439)		(688)
Net cash used in financing activities		(6,058)		(4,717)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	39,370		(6,058)
Effects of exchange rate changes on cash, cash equivalents and restricted cash	Effects of exchange rate changes on cash, cash equivalents and restricted cash	9,296		7,853		Effects of exchange rate changes on cash, cash equivalents and restricted cash	(8,307)		9,296
Changes in cash, cash equivalents and restricted cash	Changes in cash, cash equivalents and restricted cash	(12,490)		(181,187)		Changes in cash, cash equivalents and restricted cash	21,204		(12,490)

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	$	238,638	$	262,391	Cash, cash equivalents and restricted cash at end of period	$	214,011	$	238,638

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
		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	231,177	$	248,010	Cash and cash equivalents	$	204,848	$	186,875
Restricted cash included in other current assets	Restricted cash included in other current assets	5,846		961		Restricted cash included in other current assets	7,694		4,650
Restricted cash included in other assets	Restricted cash included in other assets	1,615		2,157		Restricted cash included in other assets	1,469		1,282
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	238,638	$	251,128	Total cash, cash equivalents and restricted cash	$	214,011	$	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 September 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 nine months ended September 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~~Divestitures and Deconsolidations

2023 Divestiture

In the second quarter of 2023, the Company signed a share purchase and assignment agreement to sell its European technical rubber products business. In the third quarter of 2023, the Company closed the transaction and received cash proceeds in the amount of $15,009. Upon finalization of the sale, during the three months ended September 30, 2023, the Company recorded a loss of $443, included in the condensed consolidated statements of operations. The loss included the write off of goodwill with a carrying amount of $1,300.

2023 Joint Venture Divestiture

Management approved a plan to sell the Company’s entire controlling equity interest of a joint venture in the Asia Pacific region, and the sale was completed in the third quarter of 2023. As a result of the sale, during the three months ended September 30, 2023, the Company recorded a gain of $109, included in the condensed consolidated statements of operations.

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 nine months ended September 30, 2022, the Company recorded a loss of $2,257, included in other (expense) 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~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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 the divestiture to Mutares SE & Co. KGaA (“Mutares”). During~~amount of $50,008 during the nine months ended September 30, ~~2021,~~2022. The sale-leaseback became effective on April 1, 2022, and the Company recorded ~~subsequent adjustments resulting in~~ a ~~net~~ gain on the sale transaction of ~~$696.~~$33,391 during the nine months ended September 30, 2022.

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 September 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	402,756	$	141,677	$	120,561	$	34,348	$	—	$	699,342
Commercial	4,094		5,720		56		—		1,788		11,658
Other	4,056		153		—		—		20,829		25,038
Revenue	$	410,906	$	147,550	$	120,617	$	34,348	$	22,617	$	736,038

Revenue by customer group for the nine months ended September 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	1,119,679	$	468,238	$	326,222	$	96,697	$	—	$	2,010,836
Commercial	12,731		18,729		399		6		5,467		37,332
Other	12,433		335		3		—		81,297		94,068
Revenue	$	1,144,843	$	487,302	$	326,624	$	96,703	$	86,764	$	2,142,236

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


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	343,012	$	108,628	$	129,167	$	27,069	$	—	$	607,876
Commercial	4,132		4,957		326		4		1,725		11,144
Other	3,867		85		—		—		34,181		38,133
Revenue	$	351,011	$	113,670	$	129,493	$	27,073	$	35,906	$	657,153

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

~~(Unaudited)~~

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

Revenue by customer group for the nine months ended September 30, 2022 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	$	981,131	$	354,689	$	317,909	$	74,838	$	—	$	1,728,567
Commercial	11,855		16,426		1,114		15		5,047		34,457
Other	11,606		256		2		—		101,166		113,030
Revenue	$	1,004,592	$	371,371	$	319,025	$	74,853	$	106,213	$	1,876,054

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

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Passenger and Light Duty $ 262,821 $ 93,766 $ 109,187 $ 15,973 $ — $ 481,747
Commercial 3,341 4,773 337 8 1,333 9,792
Other 4,430 143 2 — 30,576 35,151
Revenue $ 270,592 $ 98,682 $ 109,526 $ 15,981 $ 31,909 $ 526,690

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

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Passenger and Light Duty $ 834,545 $ 380,519 $ 325,178 $ 45,597 $ — $ 1,585,839
Commercial 11,027 16,125 2,484 23 4,029 33,688
Other 11,581 435 4 — 97,295 109,315
Revenue $ 857,153 $ 397,079 $ 327,666 $ 45,620 $ 101,324 $ 1,728,842

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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.

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 September 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	150,963	$	116,466	$	78,283	$	25,451	$	—	$	371,163
Fluid handling:
Fuel and brake delivery systems	138,897		26,463		23,387		6,972		—		195,719
Fluid transfer systems	121,046		4,621		18,947		1,925		—		146,539
Total fluid handling	259,943		31,084		42,334		8,897		—		342,258
Other	—		—		—		—		22,617		22,617
Revenue	$	410,906	$	147,550	$	120,617	$	34,348	$	22,617	$	736,038

Revenue by product line for the nine months ended September 30, 2023 was as follows:


	North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	$	427,237	$	389,097	$	207,563	$	73,004	$	—	$	1,096,901
Fluid handling:
Fuel and brake delivery systems	383,344		85,067		65,736		17,906		—		552,053
Fluid transfer systems	334,262		13,138		53,325		5,793		—		406,518
Total fluid handling	717,606		98,205		119,061		23,699		—		958,571
Other	—		—		—		—		86,764		86,764
Revenue	$	1,144,843	$	487,302	$	326,624	$	96,703	$	86,764	$	2,142,236

Revenue by product line for the three months ended September 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	$	133,347	$	91,078	$	85,309	$	21,654	$	—	$	331,388	Sealing systems	$	133,347	$	91,078	$	85,309	$	21,654	$	—	$	331,388
Fluid handling:														Fluid handling:
Fuel and brake delivery systems	Fuel and brake delivery systems	113,755		19,572		27,540		3,715		—		164,582		Fuel and brake delivery systems	113,755		19,572		27,540		3,715		—		164,582
Fluid transfer systems	Fluid transfer systems	103,909		3,020		16,644		1,704		—		125,277		Fluid transfer systems	103,909		3,020		16,644		1,704		—		125,277
Total fluid handling														Total fluid handling	217,664		22,592		44,184		5,419		—		289,859
Other	Other	—		—		—		—		35,906		35,906		Other	—		—		—		—		35,906		35,906
Revenue	Revenue	$	351,011	$	113,670	$	129,493	$	27,073	$	35,906	$	657,153	Revenue	$	351,011	$	113,670	$	129,493	$	27,073	$	35,906	$	657,153

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 nine months ended September 30, 2022 was as follows:

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Sealing systems $ 388,244 $ 298,163 $ 198,219 $ 56,999 $ — $ 941,625
Fuel and brake delivery systems 324,090 64,248 71,768 12,090 — 472,196
Fluid transfer systems 292,258 8,960 49,038 5,764 — 356,020
Other — — — — 106,213 106,213
Revenue $ 1,004,592 $ 371,371 $ 319,025 $ 74,853 $ 106,213 $ 1,876,054

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

North America Europe Asia Pacific South America Corporate, Eliminations and Other Consolidated
Sealing systems $ 102,636 $ 75,824 $ 69,872 $ 12,114 $ — $ 260,446
Fuel and brake delivery systems 80,549 18,989 23,446 2,286 — 125,270
Fluid transfer systems 87,407 3,869 16,208 1,581 — 109,065
Other — — — — 31,909 31,909
Revenue $ 270,592 $ 98,682 $ 109,526 $ 15,981 $ 31,909 $ 526,690

~~Revenue by product line for the nine months ended September 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	$	313,985	$	310,063	$	201,873	$	34,921	$	—	$	860,842	Sealing systems	$	388,244	$	298,163	$	198,219	$	56,999	$	—	$	941,625
Fluid handling:														Fluid handling:
Fuel and brake delivery systems	Fuel and brake delivery systems	275,594		73,770		76,981		7,299		—		433,644		Fuel and brake delivery systems	324,090		64,248		71,768		12,090		—		472,196
Fluid transfer systems	Fluid transfer systems	267,574		13,246		48,812		3,400		—		333,032		Fluid transfer systems	292,258		8,960		49,038		5,764		—		356,020
Total fluid handling														Total fluid handling	616,348		73,208		120,806		17,854		—		828,216
Other	Other	—		—		—		—		101,324		101,324		Other	—		—		—		—		106,213		106,213
Revenue	Revenue	$	857,153	$	397,079	$	327,666	$	45,620	$	101,324	$	1,728,842	Revenue	$	1,004,592	$	371,371	$	319,025	$	74,853	$	106,213	$	1,876,054

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 nine months ended September 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:

September 30, 2022 December 31, 2021 Change
Contract assets $ 3,690 $ — $ 3,690
Contract liabilities (13) (143) 130
Net contract assets (liabilities) $ 3,677 $ (143) $ 3,820

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

~~(Unaudited)~~

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


	September 30, 2023		December 31, 2022		Change
Contract assets	$	878	$	530	$	348
Contract liabilities	(14)		(15)		1
Net contract assets	$	864	$	515	$	349

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 September 30, ~~2022~~2023 and December 31, ~~2021~~2022 were current liabilities of ~~$13,968~~$11,330 and ~~$12,045,~~$9,325, respectively, and long-term liabilities of ~~$5,733~~$4,218 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 nine months ended September 30, 2022 and 2021 was as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
North America $ (66) $ 307 $ (152) $ 3,513
Europe 1,383 1,113 11,518 27,284
Asia Pacific 319 282 1,318 1,265
South America 147 (129) 252 1,858
Total Automotive 1,783 1,573 12,936 33,920
Corporate and other (82) — 78 331
Total $ 1,701 $ 1,573 $ 13,014 $ 34,251

~~Restructuring activity for the nine months ended September 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 8,654 4,360 13,014
Cash payments (15,361) (2,455) (17,816)
Foreign exchange translation and other (2,074) (517) (2,591)
Balance as of September 30, 2022 $ 12,176 $ 7,015 $ 19,191

~~Other exit costs for the nine months ended September 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:~~

September 30, 2022 December 31, 2021
Finished goods $ 52,462 $ 43,186
Work in process 47,136 37,045
Raw materials and supplies 95,405 77,844
$ 195,003 $ 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Operating lease expense $ 6,954 $ 7,827 $ 21,578 $ 23,258
Short-term lease expense 1,413 1,719 3,558 5,324
Variable lease expense 326 191 792 620
Finance lease expense:
Amortization of right-of-use assets 523 519 1,500 1,586
Interest on lease liabilities 318 356 980 1,094
Total lease expense $ 9,534 $ 10,612 $ 28,408 $ 31,882

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

Nine Months Ended September 30,
2022 2021
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows for operating leases $ 21,944 $ 25,641
     Operating cash flows for finance leases 988 1,093
     Financing cash flows for finance leases 1,488 1,677
Non-cash right-of-use assets obtained in exchange for lease obligations:
     Operating leases 11,012 14,968
     Finance leases 128 606
Weighted Average Remaining Lease Term (in years)
Operating leases 7.4 7.6
Finance leases 9.1 9.9
Weighted Average Discount Rate
Operating leases 6.1 % 5.7 %
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 September 30, 2022 were as follows:~~

Year Operating Leases Finance
Leases
Remainder of 2022 $ 6,567 $ 756
2023 24,425 3,059
2024 18,619 3,250
2025 15,136 3,274
2026 11,060 3,033
Thereafter 48,714 16,396
Total future minimum lease payments 124,521 29,768
Less imputed interest (25,127) (7,015)
Total $ 99,394 $ 22,753

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

September 30, 2022 December 31, 2021
Operating Leases
Operating lease right-of-use assets, net $ 95,803 $ 111,052
Current operating lease liabilities 20,172 22,552
Long-term operating lease liabilities 79,222 92,760
Finance Leases
Property, plant and equipment, net 22,260 25,690
Debt payable within one year 2,067 2,153
Long-term debt 20,686 23,590

~~As of September 30, 2022, the Company had additional leases, primarily~~Restructuring charges (reversals) by segment for ~~real estate, that had not yet commenced with undiscounted lease payments of approximately $3,163.~~

~~7. Property, Plant and Equipment~~

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

September 30, 2022 December 31, 2021
Land and improvements $ 40,889 $ 44,495
Buildings and improvements 253,181 285,240
Machinery and equipment 1,198,754 1,269,330
Construction in progress 79,252 80,868
1,572,076 1,679,933
Accumulated depreciation (904,959) (895,585)
Property, plant and equipment, net $ 667,117 $ 784,348

~~During~~ the three and nine months ended September 30, 2023 and 2022 the Company recorded impairment charges of $379 and $837, respectively, primarily due to idle assets in Europe and North America. The fair value was determined using salvage value. During the three and nine months ended September 30, 2021, the Company recorded impairment charges of $1,006 and $1,847, respectively, due to idle assets, primarily in certain North American and European locations. The fair value was determined using salvage value.were 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 September 30, 2022.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
North America	$	5	$	(66)	$	5,384	$	(152)
Europe	3,661		1,383		8,711		11,518
Asia Pacific	(1,794)		319		(1,474)		1,318
South America	162		147		208		252
Total Automotive	2,034		1,783		12,829		12,936
Corporate and other	12		(82)		95		78
Total	$	2,046	$	1,701	$	12,924	$	13,014

~~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. DuringRestructuring activity for the nine months ended September 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 sheet2023 was as ~~of September 30, 2022.~~follows:


	Employee Separation Costs		Other Exit Costs		Total
Balance as of December 31, 2022	$	13,185	$	6,383	$	19,568
Expense	10,589		2,335		12,924
Cash payments	(6,559)		(4,352)		(10,911)

Foreign exchange translation and other	(161)		(109)		(270)
Balance as of September 30, 2023	$	17,054	$	4,257	$	21,311

8.5. Inventories

Inventories consist of the following:


	September 30, 2023		December 31, 2022
Finished goods	$	47,394	$	39,202
Work in process	46,890		40,521
Raw materials and supplies	86,766		78,033
	$	181,050	$	157,756

6. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reporting unit for the nine months ended September 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 (324) — (324)
Balance as of September 30, 2022 $ 127,922 $ 14,036 $ 141,958


	North America		Industrial Specialty Group		Total
Balance as of December 31, 2022	$	127,987	$	14,036	$	142,023
Divestiture	—		(1,300)		(1,300)

Foreign exchange translation	(13)		—		(13)
Balance as of September 30, 2023	$	127,974	$	12,736	$	140,710

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 nine months ended September 30, ~~2022.~~

~~Intangible Assets~~

~~Intangible assets~~2023. The write off of goodwill of $1,300 is related to the sale of the European technical rubber products business. Refer to Note. 2 “Divestitures and ~~accumulated amortization balances as of September 30, 2022 and December 31, 2021 were as follows:~~

Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
Customer relationships $ 152,210 $ (128,099) $ 24,111
Other 37,662 (13,360) 24,302
Balance as of September 30, 2022 $ 189,872 $ (141,459) $ 48,413
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 in the first quarter of 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 September 30, 2022.Deconsolidations” for further information.

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 September 30, 2023 and December 31, 2022 were as follows:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	152,116	$	(132,386)	$	19,730
Other	37,754		(15,509)		22,245
Balance as of September 30, 2023	$	189,870	$	(147,895)	$	41,975

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 September 30, ~~2022~~2023 and December 31, ~~2021~~2022 is as follows:


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Senior Notes		$	397,080	$	396,544
Senior Secured Notes		243,700		241,683
First Lien Notes						First Lien Notes	$	588,646	$	—
Third Lien Notes						Third Lien Notes	378,184		—
2026 Senior Notes						2026 Senior Notes	42,319		397,259
2024 Senior Secured Notes						2024 Senior Secured Notes	—		244,471
Term Loan	Term Loan	319,393		321,212		Term Loan	—		318,787

ABL Facility						ABL Facility	120,000		—
Finance leases	Finance leases	22,753		25,743		Finance leases	22,355		23,765
Other borrowings	Other borrowings	44,399		51,533		Other borrowings	46,913		51,902
Total debt	Total debt	1,027,325		1,036,715		Total debt	1,198,417		1,036,184
Less current portion		(48,890)		(56,111)
Less: current portion						Less: current portion	(169,349)		(54,130)
Total long-term debt	Total long-term debt	$	978,435	$	980,604	Total long-term debt	$	1,029,068	$	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 nine months ended September 30, 2023.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

Additionally, the Company incurred total fees of $91,800 associated with the Refinancing Transactions, of which $87,563 were paid during the nine months ended September 30, 2023 and $4,237 were paid during 2022. The fees paid during the nine months ended September 30, 2023 are reflected as a financing outflow in the condensed consolidated statement of cash flows. Of the fees paid during the nine months ended September 30, 2023, $73,376 was included in the loss on the refinancing and extinguishment of debt referenced above, $13,187 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 September 30, 2023, the aggregate principal amount of the First Lien Notes of $588,646 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 September 30, ~~2022 and December 31, 2021,~~2023, the Company had ~~$2,920 and $3,456~~$8,814 of unamortized debt issuance costs ~~respectively,~~and $363 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 September 30, 2022 and December 31, 2021, the Company had $3,452 and $4,594 of unamortized debt issuance costs, respectively, and $2,848 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 September 30, 2023, the aggregate principal amount of the Third Lien Notes of $378,184 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 September 30, 2023, the Company had $5,459 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 “ABL Facility Collateral Agent”), 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 September 30, 2023 and December 31, 2022, the Company had $235 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

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. The 2024 Senior Secured Notes would have matured

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 $180,000. 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 ABL Facility Collateral Agent 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 September 30, 2023 was $180,000 and the monthly fixed charge coverage ratio was at a level that provided the Company full access to the borrowing base. Net of $5,476 of outstanding letters of credit, and $120,000 of outstanding borrowings, the Company effectively had $54,524 available for borrowing under its ABL Facility as of September 30, 2023.

As of September 30, 2023, there was $120,000 outstanding under the ABL Facility which is recorded in short-term debt in the condensed consolidated balance sheet. This amount was subsequently repaid on November 3, 2023.

Maturity. Any borrowings then outstanding 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 ABL Facility Collateral 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 ABL Facility Collateral Agent. The borrowing base is also subject to certain reserves, which are established by the ABL Facility Collateral 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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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 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. As of September 30, 2023, availability under the ABL Facility was at a level that did not trigger this requirement. The ABL Facility also contains various events of default that are customary for comparable facilities.

Debt Issuance Costs. As of September 30, 2023 and December 31, 2022, the Company had $1,047 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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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%~~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 terminated. The Company has retained Goldman Sachs & Co. LLC as its financial advisor to analyze, evaluate and help arrange a refinancing of~~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 ~~possibly certain other debt instruments. The Company’s ability to continue as a going concern is contingent upon its ability to refinance its~~the Term Loan Facility. The Company continues its discussions with certain investors with respect to potential refinancing alternatives. While discussions are ongoing, the Company has not reached an agreement with respect to such a transaction for refinancing its capital structure and there can be no assurances that such an agreement will be reached in the future.Facility was terminated.

Debt Issuance Costs.As of ~~September 30, 2022 and~~ December 31, ~~2021,~~2022, the Company had ~~$642 and $1,087~~$494 of unamortized debt issuance costs ~~respectively,~~ and ~~$414 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 September 30, 2023.

Other Financing

Finance leases and other. Other borrowings as of September 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 extends indefinitely after December 31, 2023 unless the Company or the Factor provides a three-month notice to terminate.

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 by various locations as of the period end were as follows:


	September 30, 2023		December 31, 2022
Off-balance sheet arrangements	$	32,865	$	52,491

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


	Off-Balance Sheet Arrangements
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Accounts receivable factored	$	86,575	$	89,263	$	303,880	$	262,145
Costs	652		156		1,725		395

As of September 30, 2023 and December 31, 2022, cash collections on behalf of the Factor that have yet to be remitted were $6,302 and $3,772, respectively, and are reflected in other current assets as restricted cash in the condensed consolidated balance sheets.

1518

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

~~ABL Facility~~

In November 2016, the Company 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 Amendment of the Third Amended and Restated Loan Agreement (“the Amendment”). As a result of the Amendment, the senior asset-based revolving credit facility (“ABL Facility”) maturity was extended to March 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 September 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 $6,310 of outstanding letters of credit, the Company effectively had $155,690 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 September 30, 2022 and December 31, 2021, the Company had $597 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 September 30, 2022.~~

~~Other~~

~~Other borrowings as of September 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 September 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows:

September 30, 2022 December 31, 2021 Input
Forward foreign exchange contracts - other current assets $ 3,624 $ 647 Level 2
Forward foreign exchange contracts - accrued liabilities (487) (1,535) Level 2

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

~~(Unaudited)~~

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


	September 30, 2023		December 31, 2022		Input
Forward foreign exchange contracts - other current assets	$	5,164	$	8,643	Level 2
Forward foreign exchange contracts - accrued liabilities	1		—		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. ~~For further information on~~

During the three months ended September 30, 2023, the Company did not record any impairment charges. During the nine months ended September 30, 2023, the Company recorded impairment charges of $654, primarily related to certain assets in Asia Pacific. During the three and ~~liabilities measured at~~nine months ended September 30, 2022, the Company recorded impairment charges of $379 and $837, respectively, primarily due to idle assets in Europe and North America. The fair value was determined using salvage value.

In addition, during the nine months ended September 30, 2022, the Company recorded a loss on the deconsolidation of a ~~nonrecurring basis see Note 2. “Deconsolidation~~joint venture in the Asia Pacific region of $2,257, included in other income (expense), net in the condensed consolidated statements of operations. Refer to Note. 2 “Divestitures and ~~Divestiture” and Note 7. “Property, Plant and Equipment.”~~Deconsolidations” for further information.

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:


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Aggregate fair value	Aggregate fair value	$	719,807	$	899,909	Aggregate fair value	$	926,026	$	744,010
Aggregate carrying value (1)	Aggregate carrying value (1)	970,450		973,000		Aggregate carrying value (1)	1,024,019		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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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 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 September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the notional amount of these contracts was ~~$155,054~~$33,684 and ~~$136,103,~~$135,285, respectively, and consisted of hedges of cash flow transactions upextending out to December 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ 3,168 $ (1,606) $ 5,064 $ (964)


	(Loss) Gain Recognized in OCI
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Forward foreign exchange contracts	$	(813)	$	3,168	$	9,429	$	5,064

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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ 486 $ 508 $ 1,048 $ 1,045


	Gain Reclassified from AOCI to Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Forward foreign exchange contracts	$	4,321	$	486	$	12,900	$	1,048

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.

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 sheet. Amounts outstanding under receivable transfer agreements entered into by various locations as of the period end were as follows:

September 30, 2022 December 31, 2021
Off-balance sheet arrangements $ 49,155 $ 52,743

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

Off-Balance Sheet Arrangements
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Accounts receivable factored $ 89,263 $ 68,897 $ 262,145 $ 286,214
Costs 156 117 395 421

As of September 30, 2022 and December 31, 2021, cash collections on behalf of the Factor that have yet to be remitted were $5,216 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 cost (income) ~~cost~~ for the Company’s defined benefit plans and other postretirement benefit plans were as follows:


		Pension Benefits									Pension Benefits
		Three Months Ended September 30,									Three Months Ended September 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	$	658	$	223	$	878	Service cost	$	—	$	548	$	193	$	658
Interest cost	Interest cost	1,766		690		1,629		659		Interest cost	2,314		1,318		1,766		690
Expected return on plan assets	Expected return on plan assets	(2,323)		(247)		(3,564)		(335)		Expected return on plan assets	(2,113)		(309)		(2,323)		(247)
Amortization of prior service cost and actuarial loss	Amortization of prior service cost and actuarial loss	222		376		418		509		Amortization of prior service cost and actuarial loss	778		6		222		376
Other		—		—		—		—
Net periodic benefit (income) cost		$	(142)	$	1,477	$	(1,294)	$	1,711

Net periodic benefit cost (income)										Net periodic benefit cost (income)	$	979	$	1,563	$	(142)	$	1,477
		Pension Benefits
		Nine Months Ended September 30,
		2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost		$	579	$	2,071	$	669	$	2,705
Interest cost		5,298		2,139		4,887		1,967
Expected return on plan assets		(6,969)		(753)		(10,692)		(1,013)
Amortization of prior service cost and actuarial loss		666		1,187		1,254		2,374
Other		—		—		—		125

Net periodic benefit (income) cost		$	(426)	$	4,644	$	(3,882)	$	6,158


		Other Postretirement Benefits									Pension Benefits
		Three Months Ended September 30,									Nine Months Ended September 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	$	22	$	56	$	26	$	91	Service cost	$	—	$	1,626	$	579	$	2,071
Interest cost	Interest cost	140		163		133		178		Interest cost	6,942		3,928		5,298		2,139
Amortization of prior service credit and actuarial (gain) loss		(394)		41		(349)		191
Expected return on plan assets										Expected return on plan assets	(6,339)		(924)		(6,969)		(753)
Amortization of prior service cost and actuarial loss										Amortization of prior service cost and actuarial loss	2,334		18		666		1,187

Net periodic benefit (income) cost		$	(232)	$	260	$	(190)	$	460
Net periodic benefit cost (income)										Net periodic benefit cost (income)	$	2,937	$	4,648	$	(426)	$	4,644
		Other Postretirement Benefits
		Nine Months Ended September 30,
		2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost		$	66	$	171	$	78	$	274
Interest cost		420		498		399		538
Amortization of prior service credit and actuarial (gain) loss		(1,182)		125		(1,047)		577

Net periodic benefit (income) cost		$	(696)	$	794	$	(570)	$	1,389


	Other Postretirement Benefits
	Three Months Ended September 30,
	2023				2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	13	$	37	$	22	$	56
Interest cost	205		198		140		163
Amortization of prior service credit and actuarial (gain) loss	(609)		(21)		(394)		41

Net periodic benefit (income) cost	$	(391)	$	214	$	(232)	$	260


	Other Postretirement Benefits
	Nine Months Ended September 30,
	2023				2022
	U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	$	39	$	112	$	66	$	171
Interest cost	615		593		420		498
Amortization of prior service credit and actuarial (gain) loss	(1,827)		(63)		(1,182)		125

Net periodic benefit (income) cost	$	(1,173)	$	642	$	(696)	$	794

The service cost component of net periodic benefit cost (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 cost (income) ~~cost~~ are included in other (expense) income, ~~(expense),~~ net in the condensed consolidated statements of operations for all periods presented.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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

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

~~(Unaudited)~~

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

termination of the U.S. Pension Plan is expected to take ~~twelve~~up 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 September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the U.S. Pension Plan was ~~overfunded~~underfunded under U.S. generally accepted accounting principles by ~~$31,307~~$5,953 and ~~$29,804,~~$5,759, respectively.

~~13.~~10. Other (Expense) Income, ~~(Expense),~~ Net

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 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 gains (losses)		649		(1,396)		993		(5,546)
Components of net periodic benefit (cost) income other than service cost		(434)		531		(1,429)		631
Foreign currency (losses) gains										Foreign currency (losses) gains	(1,536)		649		(3,987)		993
Components of net periodic cost other than service cost										Components of net periodic cost other than service cost	(1,767)		(434)		(5,277)		(1,429)
Factoring costs	Factoring costs	(156)		(117)		(395)		(421)		Factoring costs	(652)		(156)		(1,725)		(395)
Miscellaneous income	Miscellaneous income	87		488		514		1,115		Miscellaneous income	139		87		608		514
Other income (expense), net		$	146	$	(494)	$	(2,574)	$	(4,221)
Other (expense) income, net										Other (expense) income, net	$	(3,816)	$	146	$	(10,381)	$	(2,574)

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

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Income tax (benefit) expense $ (833) $ 32,121 $ 1,824 $ 15,598
Loss before income taxes (34,053) (92,743) (127,337) (208,508)
Effective tax rate 2 % (35) % (1) % (7) %


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income tax expense (benefit)	$	4,338		$	(833)		$	9,461		$	1,824
Income (loss) before income taxes	15,721			(34,053)			(138,688)			(127,337)
Effective tax rate	28		%	2		%	(7)		%	(1)		%

The effective tax rate for the three and nine months ended September 30, ~~2022~~2023 varied from the effective tax rate for the three and nine months ended September 30, ~~2021~~2022 primarily due to ~~the initial recognition of valuation allowances in the U.S., resulting in tax expense of $31,740 and $13,278 recorded in the three and nine months ended September 30, 2021, respectively,~~ the geographic mix of pre-tax income and losses, and the inability to record a tax expense for pre-tax income and a benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation ~~allowances. Additionally the~~allowances, and other permanent items. The three and nine months ended September 30, 2022 ~~were impacted by~~also included discrete ~~tax~~ impacts of the gain on ~~sale-leaseback~~sale transaction in Europe and other tax reserve ~~changes, and other permanent items.~~changes.

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

During the nine months ended September 30, 2022, the Company received $54,273 in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss carrybacks.

2022

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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 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 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.

~~Inflation Reduction Action~~The Company, or one of ~~2022~~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 nine months ended September 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 September 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.

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. ~~Based~~The provisions were effective in the first quarter of 2023 and did not have a significant impact on ~~its current analysis~~the Company’s condensed consolidated financial statements.

Numerous countries have agreed to a statement in support of the ~~provisions,~~Organization for Economic Co-operation and Development (“OECD”) model rules that propose a global minimum tax rate of 15%, and European Union member states have agreed to implement the global minimum tax. Certain countries, including European Union member states, have enacted or are expected to enact legislation to be effective as early as 2024, with widespread implementation of a global minimum tax expected by 2025. As the legislation becomes effective in countries in which the Company does ~~not believe this~~business, its provision for income taxes could be impacted. The Company will continue to monitor pending legislation ~~will have a material~~and implementation by individual countries and evaluate the potential impact on its ~~consolidated financial statements, but the Company is continuing to evaluate the implications.~~business in future periods.

~~15.~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

12. Net ~~Loss~~Income (Loss) Per Share Attributable to Cooper-Standard Holdings Inc.

Basic net ~~loss~~income (loss) per share attributable to Cooper-Standard Holdings Inc. was computed by dividing net ~~loss~~income (loss) attributable to Cooper-Standard Holdings Inc. by the weighted average number of shares of common stock outstanding during the period. Diluted net ~~loss~~income (loss) per share attributable to Cooper-Standard Holdings Inc. was computed using the treasury stock method by dividing diluted net ~~loss~~income (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~~income (loss) per share attributable to Cooper-Standard Holdings Inc. was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Net loss available to Cooper-Standard Holdings Inc. common stockholders		$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)
Net income (loss) available to Cooper-Standard Holdings Inc. common stockholders										Net income (loss) available to Cooper-Standard Holdings Inc. common stockholders	$	11,363	$	(32,686)	$	(146,833)	$	(127,293)

Basic weighted average shares of common stock outstanding	Basic weighted average shares of common stock outstanding	17,218,165		17,097,766		17,181,534		17,027,226		Basic weighted average shares of common stock outstanding	17,427,082		17,218,165		17,331,199		17,181,534
Dilutive effect of common stock equivalents	Dilutive effect of common stock equivalents	—		—		—		—		Dilutive effect of common stock equivalents	133,139		—		—		—
Diluted weighted average shares of common stock outstanding	Diluted weighted average shares of common stock outstanding	17,218,165		17,097,766		17,181,534		17,027,226		Diluted weighted average shares of common stock outstanding	17,560,221		17,218,165		17,331,199		17,181,534

Basic net loss per share attributable to Cooper-Standard Holdings Inc.		$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)
Basic net income (loss) per share attributable to Cooper-Standard Holdings Inc.										Basic net income (loss) per share attributable to Cooper-Standard Holdings Inc.	$	0.65	$	(1.90)	$	(8.47)	$	(7.41)

Diluted net loss per share attributable to Cooper-Standard Holdings Inc.		$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)
Diluted net income (loss) per share attributable to Cooper-Standard Holdings Inc.										Diluted net income (loss) per share attributable to Cooper-Standard Holdings Inc.	$	0.65	$	(1.90)	$	(8.47)	$	(7.41)

Securities excluded from the calculation of diluted loss per share were approximately 52,000 ~~and 169,000~~ for the three months ended September 30, 2022, and ~~2021, respectively,~~66,000 and 52,000 ~~and 159,000~~ for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively, because the inclusion of such securities in the calculation would have been anti-dilutive. There were no anti-dilutive securities during the three months ended September 30, 2023.

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 September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 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	$	(147,736)		$	(134,377)		$	(138,751)		$	(136,579)		Balance at beginning of period	$	(165,388)		$	(147,736)		$	(158,023)		$	(138,751)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(19,309)		(1)	(6,134)		(1)	(28,000)		(1)	(3,932)		(1)	Other comprehensive loss before reclassifications	(2,558)		(1)	(19,309)		(1)	(9,923)		(1)	(28,000)		(1)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	—			144			(294)			144			Amounts reclassified from accumulated other comprehensive loss	—			—			—			(294)
Balance at end of period	Balance at end of period	$	(167,045)		$	(140,367)		$	(167,045)		$	(140,367)		Balance at end of period	$	(167,946)		$	(167,045)		$	(167,946)		$	(167,045)
Benefit plan liabilities	Benefit plan liabilities													Benefit plan liabilities
Balance at beginning of period	Balance at beginning of period	$	(62,256)		$	(102,729)		$	(65,303)		$	(106,079)		Balance at beginning of period	$	(60,009)		$	(62,256)		$	(60,251)		$	(65,303)
Other comprehensive income (loss) before reclassifications (net of tax expense (benefit) of $70, $27, $(174), and $(250), respectively)		2,227			4,119			4,765			5,160
Other comprehensive (loss) income before reclassifications (net of tax expense (benefit) of $68, $70, $39, and $(174), respectively)														Other comprehensive (loss) income before reclassifications (net of tax expense (benefit) of $68, $70, $39, and $(174), respectively)	(114)			2,227			(188)			4,765
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	171		(2)	859		(3)	680		(4)	3,168		(5)	Amounts reclassified from accumulated other comprehensive loss	159		(2)	171		(3)	475		(4)	680		(5)
Balance at end of period	Balance at end of period	$	(59,858)		$	(97,751)		$	(59,858)		$	(97,751)		Balance at end of period	$	(59,964)		$	(59,858)		$	(59,964)		$	(59,858)
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	$	278		$	942		$	(1,130)		$	762		Balance at beginning of period	$	10,072		$	278		$	8,303		$	(1,130)
Other comprehensive income (loss) before reclassifications (net of tax expense of $419, $154, $500, and $220, respectively)		2,749			(1,760)			4,564			(1,184)
Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $159, $136, $314, and $277, respectively)		(327)			(372)			(734)			(768)
Other comprehensive (loss) income before reclassifications (net of tax (benefit) expense of $(72), $419, $220, and $500, respectively)														Other comprehensive (loss) income before reclassifications (net of tax (benefit) expense of $(72), $419, $220, and $500, respectively)	(741)			2,749			9,209			4,564
Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $241, $159, $639, and $314, respectively)														Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $241, $159, $639, and $314, respectively)	(4,080)			(327)			(12,261)			(734)
Balance at end of period	Balance at end of period	$	2,700		$	(1,190)		$	2,700		$	(1,190)		Balance at end of period	$	5,251		$	2,700		$	5,251		$	2,700
Accumulated other comprehensive loss, ending balance	Accumulated other comprehensive loss, ending balance	$	(224,203)		$	(239,308)		$	(224,203)		$	(239,308)		Accumulated other comprehensive loss, ending balance	$	(222,659)		$	(224,203)		$	(222,659)		$	(224,203)

(1)Includes other comprehensive ~~(loss) income~~loss related to intra-entity foreign currency balances that are of a long-term investment nature of ~~$(24,098)~~$(6,413) and ~~$(9,265)~~$(24,098) for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$(28,333)~~$(8,257) and ~~$(5,986)~~$(28,333) for the nine months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively.

(2)Includes the effect of the amortization of actuarial losses of $149 and amortization of prior service cost of $6, net of tax of $4.

(3)Includes the effect of the amortization of actuarial losses of $138 and amortization of prior service cost of $37, net of tax of $4.

~~(3)~~(4)Includes the effect of the amortization of actuarial losses of ~~$664,~~$443 and amortization of prior service cost of ~~$41, and impact of curtailment of $193,~~$18, net of tax of ~~$39.~~$14.

~~(4)~~(5)Includes the effect of the amortization of actuarial losses of $562 and amortization of prior service cost of $130, net of tax of $12.

~~(5)Includes the effect of the amortization of actuarial losses of $2,916, amortization of prior service cost of $169, and impact of curtailment of $310, net of tax of $227.~~

~~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 September 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 nine months ended September 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
PUs $ 203 $ 357 $ 515 $ 51
RSUs 476 873 1,097 3,004
Stock options 289 549 981 1,726
Total $ 968 $ 1,779 $ 2,593 $ 4,781

~~19.~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

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 be reasonably estimated. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. As of September 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 September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had approximately ~~$10,780~~$10,788 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 September 30,													Three Months Ended September 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	$	351,011	$	3,223	$	19,401	$	270,592	$	2,711	$	8,817	North America	$	410,906	$	2,693	$	60,215	$	351,011	$	3,223	$	19,401
Europe	Europe	113,670		2,142		(10,905)		98,682		1,903		(25,112)		Europe	147,550		3,094		10,057		113,670		2,142		(10,905)
Asia Pacific	Asia Pacific	129,493		1,065		7,523		109,526		306		(14,274)		Asia Pacific	120,617		2,946		8,770		129,493		1,065		7,523
South America	South America	27,073		11		766		15,981		—		(3,422)		South America	34,348		—		2,639		27,073		11		766
Total Automotive	Total Automotive	621,247		6,441		16,785		494,781		4,920		(33,991)		Total Automotive	713,421		8,733		81,681		621,247		6,441		16,785
Corporate, eliminations and other	Corporate, eliminations and other	35,906		(6,441)		3,720		31,909		(4,920)		132		Corporate, eliminations and other	22,617		(8,733)		(2,578)		35,906		(6,441)		3,720
Consolidated	Consolidated	$	657,153	$	—	$	20,505	$	526,690	$	—	$	(33,859)	Consolidated	$	736,038	$	—	$	79,103	$	657,153	$	—	$	20,505

		Nine Months Ended September 30,
		2022						2021
		External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America		$	1,004,592	$	9,500	$	52,338	$	857,153	$	7,484	$	50,806
Europe		371,371		6,052		(40,878)		397,079		7,718		(40,992)
Asia Pacific		319,025		2,598		(1,018)		327,666		1,794		(13,024)
South America		74,853		16		(941)		45,620		15		(6,756)
Total Automotive		1,769,841		18,166		9,501		1,627,518		17,011		(9,966)
Corporate, eliminations and other		106,213		(18,166)		775		101,324		(17,011)		(79)
Consolidated		$	1,876,054	$	—	$	10,276	$	1,728,842	$	—	$	(10,045)

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Adjusted EBITDA $ 20,505 $ (33,859) $ 10,276 $ (10,045)
Restructuring charges (1,701) (1,573) (13,014) (34,251)
Deconsolidation of joint venture — — (2,257) —
Impairment charges (379) (1,006) (837) (1,847)
(Loss) gain on sale of business, net — — — 696
Gain on sale of fixed assets, net — — 33,391 —
Lease termination costs — (322) — (430)
Indirect tax and customs adjustments (569) — (1,477) —
EBITDA $ 17,856 $ (36,760) $ 26,082 $ (45,877)
Income tax expense 833 (32,121) (1,824) (15,598)
Interest expense, net of interest income (20,747) (18,243) (57,378) (54,152)
Depreciation and amortization (30,628) (36,049) (94,173) (105,021)
Net loss attributable to Cooper-Standard Holdings Inc. $ (32,686) $ (123,173) $ (127,293) $ (220,648)


	Nine Months Ended September 30,
	2023						2022
	External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America	$	1,144,843	$	8,620	$	109,938	$	1,004,592	$	9,500	$	52,338
Europe	487,302		6,465		13,922		371,371		6,052		(40,878)
Asia Pacific	326,624		7,635		17,654		319,025		2,598		(1,018)
South America	96,703		11		7,942		74,853		16		(941)
Total Automotive	2,055,472		22,731		149,456		1,769,841		18,166		9,501
Corporate, eliminations and other	86,764		(22,731)		(9,957)		106,213		(18,166)		775
Consolidated	$	2,142,236	$	—	$	139,499	$	1,876,054	$	—	$	10,276

2426

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

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

September 30, 2022 December 31, 2021
Segment assets:
North America $ 900,990 $ 885,517
Europe 364,208 372,097
Asia Pacific 437,627 510,524
South America 78,142 61,479
Total Automotive 1,780,967 1,829,617
Corporate, eliminations and other 321,234 396,876
Consolidated $ 2,102,201 $ 2,226,493


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Adjusted EBITDA	$	79,103	$	20,505	$	139,499	$	10,276
Restructuring charges	(2,046)		(1,701)		(12,924)		(13,014)
Deconsolidation of joint venture	—		—		—		(2,257)
Impairment charges	—		(379)		(654)		(837)
Loss on sale of businesses, net	(334)		—		(334)		—
Gain on sale of fixed assets, net	—		—		—		33,391

Indirect tax adjustments	—		(569)		—		(1,477)



Loss on refinancing and extinguishment of debt	—		—		(81,885)		—
EBITDA	$	76,723	$	17,856	$	43,702	$	26,082
Income tax (expense) benefit	(4,338)		833		(9,461)		(1,824)
Interest expense, net of interest income	(33,803)		(20,747)		(98,057)		(57,378)
Depreciation and amortization	(27,219)		(30,628)		(83,017)		(94,173)
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	11,363	$	(32,686)	$	(146,833)	$	(127,293)


	September 30, 2023		December 31, 2022
Segment assets:
North America	$	904,928	$	851,623
Europe	311,730		338,225
Asia Pacific	392,926		447,257
South America	90,937		73,403
Total Automotive	1,700,521		1,710,508
Corporate, eliminations and other	328,479		253,021
Consolidated	$	2,029,000	$	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 ~~2021,~~2022, global automotive production ~~was~~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 2025. Global consumer demand for new vehicles has largely remained resilient despite the headwinds of rising ~~inflation,~~ 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~~in the ~~second~~third quarter ~~of 2021.~~2023 reached its highest level in more than a year. 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 uncertainty surrounding~~ the ~~upcoming mid-term elections~~resolution of the government’s debt ceiling crisis. These changing dynamics have eased concerns over the likelihood of a major economic recession in the ~~United States are also important factors. However, low unemployment rates, rising wages, continued~~near term. A continuing strong labor market, resilience in the services sector and government ~~spending and private~~ spending related to ~~pent-up consumer demand continue~~infrastructure are expected to ~~support~~drive continued but more modest economic ~~growth.~~growth during the remainder of 2023. Economists at the International Monetary Fund (IMF) are expecting the economies of the United States, Canada and Mexico to grow by ~~1.6 percent, 3.3 percent and~~ 2.1 ~~percent, respectively, in 2022 with growth expectations moderating to 1.0~~ percent, 1.3 percent and ~~1.2~~3.2 percent, respectively, in ~~2023.~~2023 with more modest growth expected in the United States and Mexico in 2024.

In Europe, ~~the war in Ukraine, related sanctions imposed on Russia~~current consumer and ~~infrastructure disruptions 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~~continuing. 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. With~~economic growth, and inflation appears to be moderating. However, industrial demand and output have leveled off as pandemic-related backlogs have been depleted, and the European Central Bank ~~having ended stimulative asset purchases and aggressively raising policy interest rates to stem inflation, economic growth~~ is expected to ~~moderate~~withdraw compensatory support related to energy and inflation in ~~the fourth quarter of 2022. Economists~~2024.In this uncertain environment, economists at the IMF are currently expecting the economy in the Eurozone region to grow by approximately ~~3.1 percent for the full year 2022 but just 0.5~~0.7 percent in ~~2023.~~2023, improving to 1.2 percent in 2024.

In the Asia Pacific region, China’s economy experienced a sharp rebound during the ~~combination~~first quarter of ~~more transmissible variants~~2023 following the removal of COVID-related restrictions. Year-over-year growth continued in the second quarter, primarily due to the weak prior year comparable data which was adversely impacted by the pandemic. Underlying economic momentum slowed in the third quarter, however, due to subdued consumer sentiment and continued weakness in the ~~strict zero-COVID strategy~~property sector. In addition, demand for

Chinese exports has softened due to continuing geopolitical tensions among key trading partners. While considerable uncertainty remains in ~~China has led~~various, important economic sectors, the nation’s leaders have pledged to ~~repeated mobility restrictions~~provide additional monetary and ~~localized lockdowns that have weighed on~~fiscal support as necessary to ensure key economic activity and private consumption. Moreover, real estate investment in China, once a key driver of economic growth, has slowed significantly. However, higher infrastructure investment and government spendingtargets are ~~expected to support growth for the remainder of 2022 and into 2023.~~achieved. Economists at the IMF are expecting the Chinese economy to grow ~~4.3~~5.0 percent in ~~2022, with expected growth moderating~~2023, but slowing to ~~just 2.6~~4.2 percent in ~~2023.~~2024.

In South America, the Brazilian economy ~~continues~~has experienced better than expected economic growth in 2023, driven mainly by surging agricultural output to ~~expand amid fiscal support and the lessening impact~~meet increasing demand from China, resilience of the ~~COVID-19 pandemic. Increasing exports of goods~~service sector and ~~services~~increased consumption which has been bolstered by fiscal stimulus. Higher interest rates put in place in 2022 have ~~provided strong support~~been effective in controlling inflation, and the unemployment rate ~~remains low. Certain fiscal interventions such as recently enacted tax cuts and fuel subsidies have provided stimulative support~~

has fallen to levels not seen since 2015. In June, the Brazilian ~~economy in the second half~~Senate approved a revised fiscal framework which looks to balance fiscal prudence while still providing flexibility for additional social spending. In view of ~~2022 but may expire following the runoff presidential elections in late October. This would likely result in slower economic growth rates going forward. Economists~~this, economists at the IMF are now estimating the Brazilian economy will grow ~~2.9 percent for the full year 2022, with growth moderating to just 0.7~~3.1 percent in ~~2023.~~2023, but slowing to 1.5 percent in 2024. We remain cautious for the economic outlook in this market given the long history of political instability and economic volatility in the ~~region.~~

~~Raw Materials~~

Our business is susceptible to inflationary pressures with respect to raw materials which may place operational and profitability burdens on the entire supply chain. Costs related to raw materials, such as steel, aluminum, and oil-derived commodities, continue to be volatile, which led to significant increases in these costs in 2021. Current global events continue to add further price pressure and uncertainty to raw material costs for 2022. In addition, we continue to see 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 our material-related cost exposures through a combination of expanded index-based agreements and other commercial enhancements.region.

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, but have improved sequentially quarter over quarter. 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 with our customers to minimize production inefficiencies while supporting their needs.~~continued in the third quarter of 2023 in North America and Europe. For the first nine months of 2023, all regions reported year-over-year increases in light vehicle production.

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


		Three Months Ended September 30,			Nine Months Ended September 30,				Three Months Ended September 30,			Nine Months Ended September 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	3.7	3.0	24.2%	10.8	9.8	10.6%	North America	4.0	3.6	9.3%	12.0	10.7	11.3%
Europe	Europe	3.6	3.0	20.3%	11.5	11.9	(3.3)%	Europe	3.9	3.6	6.3%	13.1	11.5	14.0%
Asia Pacific	Asia Pacific	12.5	9.6	29.9%	34.1	31.0	9.9%	Asia Pacific	13.0	12.8	1.7%	36.8	34.3	7.3%
Greater China	Greater China	7.2	5.5	31.2%	19.0	17.1	10.9%	Greater China	7.4	7.4	(0.3)%	20.0	19.1	4.8%
South America	South America	0.8	0.6	33.4%	2.1	1.9	10.0%	South America	0.8	0.8	(0.3)%	2.2	2.1	5.9%

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

~~In all regions,~~Despite the strong production ~~volumes were impacted by the global shortage of semiconductors which began~~ in the third quarter and first ~~quarter~~nine months of ~~2021~~2023, vehicle production and ~~deteriorated thereafter throughout~~inventory levels remain well below pre-pandemic historical averages. In addition, labor unions in North America initiated limited, targeted strikes against certain OEM production and distribution facilities beginning in mid-September 2023. While tentative agreements have been reached between these OEMs and labor unions, those agreements have not yet been ratified and the ~~year. Production~~OEMs are slowly ramping up production. It is difficult to forecast the full extent to which these actions will impact light vehicle production for the remainder of 2023. 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, the extent and duration of work stoppages related to ~~semiconductor~~union contract negotiations with the OEMs in North America.

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 may result in operational and ~~other supply chain shortages continued into~~profitability challenges for the Company and the industry as a whole. Following the pandemic, market prices for key raw materials, such as steel, aluminum, and oil-derived commodities, experienced a period of extreme volatility, which led to significant cost increases for our business in 2021 and 2022. In response, we worked with our customers throughout 2022 ~~but~~to implement or expand index-based commercial agreements that have ~~improved sequentially quarter over quarter. In Europe, vehicle production~~enabled us to 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 2023, and material cost impacts on our results for the nine months ended September 30, ~~2022 was negatively impacted by additional supply chain issues related to the Russia-Ukraine crisis.~~2023 were relatively small.

2729

General Inflation and Recovery Strategy

With continued inflationary pressures on wages, energy, transportation and other general costs, in order to remain competitive, we are working with our customers on an ongoing basis to offset the costs associated with this inflation. We are actively negotiating pricing adjustments on current business and considering the impact of inflationary and other costs in our quotes for new business. Most of the customer negotiations for inflation recovery and sustainable pricing were completed by the end of the third quarter, while the few remaining are expected to be concluded in the fourth quarter 2023.

Results of Operations

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 Change 2022 2021 Change
(dollar amounts in thousands)
Sales $ 657,153 $ 526,690 $ 130,463 $ 1,876,054 $ 1,728,842 $ 147,212
Cost of products sold 618,594 534,817 83,777 1,800,577 1,669,610 130,967
Gross profit (loss) 38,559 (8,127) 46,686 75,477 59,232 16,245
Selling, administration & engineering expenses 44,847 60,367 (15,520) 149,033 168,506 (19,473)
Gain on sale of business, net — — — — (696) 696
Gain on sale of fixed assets, net — — — (33,391) — (33,391)
Amortization of intangibles 1,693 1,819 (126) 5,176 5,524 (348)
Restructuring charges 1,701 1,573 128 13,014 34,251 (21,237)
Impairment charges 379 1,006 (627) 837 1,847 (1,010)
Operating loss (10,061) (72,892) 62,831 (59,192) (150,200) 91,008
Interest expense, net of interest income (20,747) (18,243) (2,504) (57,378) (54,152) (3,226)
Equity in (losses) earnings of affiliates (3,391) (1,114) (2,277) (8,193) 65 (8,258)
Other income (expense), net 146 (494) 640 (2,574) (4,221) 1,647
Loss before income taxes (34,053) (92,743) 58,690 (127,337) (208,508) 81,171
Income tax (benefit) expense (833) 32,121 (32,954) 1,824 15,598 (13,774)
Net loss (33,220) (124,864) 91,644 (129,161) (224,106) 94,945
Net loss attributable to noncontrolling interests 534 1,691 (1,157) 1,868 3,458 (1,590)
Net loss attributable to Cooper-Standard Holdings Inc. $ (32,686) $ (123,173) $ 90,487 $ (127,293) $ (220,648) $ 93,355


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		Change		2023		2022		Change
	(dollar amounts in thousands)
Sales	$	736,038	$	657,153	$	78,885	$	2,142,236	$	1,876,054	$	266,182
Cost of products sold	629,504		618,594		10,910		1,916,160		1,800,577		115,583
Gross profit	106,534		38,559		67,975		226,076		75,477		150,599
Selling, administration & engineering expenses	49,834		44,847		4,987		156,528		149,033		7,495
Loss on sale of businesses, net	334		—		334		334		—		334
Gain on sale of fixed assets, net	—		—		—		—		(33,391)		33,391
Amortization of intangibles	1,662		1,693		(31)		5,141		5,176		(35)
Restructuring charges	2,046		1,701		345		12,924		13,014		(90)

Impairment charges	—		379		(379)		654		837		(183)
Operating profit (loss)	52,658		(10,061)		62,719		50,495		(59,192)		109,687
Interest expense, net of interest income	(33,803)		(20,747)		(13,056)		(98,057)		(57,378)		(40,679)
Equity in earnings (losses) of affiliates	682		(3,391)		4,073		1,140		(8,193)		9,333
Loss on refinancing and extinguishment of debt	—		—		—		(81,885)		—		(81,885)
Other (expense) income, net	(3,816)		146		(3,962)		(10,381)		(2,574)		(7,807)
Income (loss) before income taxes	15,721		(34,053)		49,774		(138,688)		(127,337)		(11,351)
Income tax expense (benefit)	4,338		(833)		5,171		9,461		1,824		7,637
Net income (loss)	11,383		(33,220)		44,603		(148,149)		(129,161)		(18,988)
Net (income) loss attributable to noncontrolling interests	(20)		534		(554)		1,316		1,868		(552)
Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	11,363	$	(32,686)	$	44,049	$	(146,833)	$	(127,293)	$	(19,540)

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

Sales

Three Months Ended September 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 657,153 $ 526,690 $ 130,463 $ 168,724 $ (32,114) $ (6,147)


	Three Months Ended September 30,						Variance Due To:
	2023		2022		Change		Volume / Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Total sales	$	736,038	$	657,153	$	78,885	$	81,792	$	5,925	$	(8,832)

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

Sales for the three months ended September 30, ~~2022~~2023 increased ~~24.8%~~12.0%, compared to the three months ended September 30, ~~2021.~~2022. The increase in sales was driven by volume and mix, ~~(higher net~~mainly higher vehicle production volume due to the ~~impact~~stabilization of ~~lessening semiconductor~~the supply ~~issues in the current year) and~~environment, net customer price adjustments including recovery of cost ~~increases.~~increases, and favorable foreign exchange. This increase was partially offset by the ~~negative impact~~divestitures of ~~foreign exchange,~~our European technical rubber products business and ~~the deconsolidation of~~ a joint

venture in the Asia Pacific region. See Note 2. ~~“Deconsolidation~~“Divestitures and ~~Divestiture”~~Deconsolidations” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

Gross Profit


		Three Months Ended September 30,								Variance Due To:							Three Months Ended September 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	$	618,594		$	534,817		$	83,777	$	100,132	$	(30,584)	$	14,229	Cost of products sold	$	629,504		$	618,594		$	10,910	$	13,488	$	12,319	$	(14,897)
Gross profit	Gross profit	38,559			(8,127)			46,686		68,592		(1,530)		(20,376)		Gross profit	106,534			38,559			67,975		68,304		(6,394)		6,065
Gross profit percentage of sales	Gross profit percentage of sales	5.9		%	(1.5)		%									Gross profit percentage of sales	14.5		%	5.9		%

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

** Net of ~~deconsolidation~~divestitures.

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation and other direct operating expenses. The Company’s material portion of cost of products sold was approximately 51% and 52% of total cost of products sold for the three months ended September 30, 2023 and 2022, respectively. The change in cost of products sold was impacted by higher volume and mix, net of recovery of cost increases, higher inflation of labor and overhead, higher energy costs and unfavorable foreign exchange. These costs were partially offset by manufacturing and purchasing savings through lean initiatives, favorable commodity costs and the divestitures of our European technical rubber products business and a joint venture in the Asia Pacific region.

Gross profit for the three months ended September 30, 2023 increased $68.0 million compared to the three months ended September 30, 2022. The change was driven by volume and mix, net of customer price adjustments including recovery of cost increases, manufacturing and purchasing savings through lean initiatives and favorable commodity costs, partially offset by labor, overhead and energy inflation and unfavorable foreign exchange.

Selling, Administration and Engineering Expenses. Selling, administration and engineering expenses include administrative expenses as well as product engineering and design and development costs. Selling, administration and engineering expenses for both the three months ended September 30, 2023 and 2022 was 6.8% of sales.

Loss on Sale of Business, Net. Loss on sale of business, net for the three months ended September 30, 2023 was $0.3 million, due to the net effect of our 2023 divestitures, which included the sale of our European technical rubber products business and the sale of our entire controlling equity interest of a joint venture in the Asia Pacific region.

Amortization of Intangibles. Intangibles amortization for the three months ended September 30, 2023 was comparable to the three months ended September 30, 2022.

Restructuring Charges. Restructuring charges for the three months ended September 30, 2023 increased $0.3 million compared to the three months ended September 30, 2022. The increase was primarily driven by higher restructuring charges in Europe, partially offset by a reversal of restructuring charges in Asia Pacific that were recognized in prior periods.

Impairment Charges. Non-cash impairment charges for the three months ended September 30, 2023 decreased $0.4 million compared to the three months ended September 30, 2022, primarily due to impairments of certain assets in Asia Pacific in the prior year period.

Interest Expense, Net. Net interest expense for the three months ended September 30, 2023 increased $13.1 million compared to the three months ended September 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).

Other (Expense) Income, Net. Other expense, net, for the three months ended September 30, 2023 increased $4.0 million compared to the three months ended September 30, 2022, primarily due to the unfavorable impact of foreign currency exchange and increased net periodic benefit cost other than service cost.

Income Tax Expense (Benefit). Income tax expense for the three months ended September 30, 2023 was $4.3 million on earnings before income taxes of $15.7 million compared to an income tax benefit of $0.8 million on losses before income taxes of $34.1 million for the three months ended September 30, 2022. The effective tax rate for the three months ended September 30, 2023 differed from the effective tax rate for the three months ended September 30, 2022 primarily due to the geographic mix of pre-tax losses, the inability to record a tax expense for pre-tax earnings and tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, and other permanent items.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Sales


	Nine Months Ended September 30,						Variance Due To:
	2023		2022		Change		Volume / Mix*		Foreign Exchange		Divestitures
	(dollar amounts in thousands)
Total sales	$	2,142,236	$	1,876,054	$	266,182	$	290,711	$	(15,697)	$	(8,832)

* Net of customer price adjustments, including recoveries.

Sales for the nine months ended September 30, 2023 increased 14.2%, compared to the nine months ended September 30, 2022. The increase in sales was driven by volume and mix, mainly higher vehicle production volume due to the stabilization of the supply environment, elimination of prior year COVID-19 related restrictions in China and net customer price adjustments including recovery of cost increases. This increase was partially offset by the negative impact of foreign exchange and the divestitures of our European technical rubber products business and a joint venture in the Asia Pacific region. See Note 2. “Divestitures and Deconsolidations” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

Gross Profit


	Nine Months Ended September 30,								Variance Due To:
	2023			2022			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)**
	(dollar amounts in thousands)
Cost of products sold	$	1,916,160		$	1,800,577		$	115,583	$	127,813	$	1,247	$	(13,477)
Gross profit	226,076			75,477			150,599		162,898		(16,944)		4,645
Gross profit percentage of sales	10.6		%	4.0		%

* Net of customer price adjustments, including recoveries.

** Net of divestitures.

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 portion of cost of products sold was approximately 52% and ~~47%~~51% of total cost of products sold for the ~~three~~nine months ended September 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~~of labor and overhead, ~~costs due to inconsistent volume production schedules,~~ higher ~~compensation related~~energy costs and ~~higher energy and transportation costs.~~the negative impact of foreign exchange. These costs were partially offset by ~~foreign exchange,~~ manufacturing ~~efficiencies,~~and purchasing savings through lean ~~savings, restructuring savings~~initiatives, favorable commodity costs and the ~~deconsolidation~~divestitures of ~~a joint venture in the Asia Pacific region.~~

~~Gross profit for the three months ended September 30, 2022 increased $46.7 million, compared to the three months ended September 30, 2021. The change was driven by volume~~our European technical rubber products business and mix, net customer price adjustments including recovery of cost increases, manufacturing efficiencies, purchasing lean savings and restructuring savings, partially offset by commodity and wage inflation, higher compensation related costs, higher energy and transportation costs and foreign exchange.

~~Selling, Administration and Engineering Expense.~~ Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Selling, administration and engineering expense for the three months ended September 30, 2022 was 6.8% of sales compared to 11.5% for the three months ended September 30, 2021~~. The decrease was primarily due to the non-recurrence of a prior year credit loss, salaried headcount initiative savings and foreign exchange partially offset by higher compensation related costs.~~

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

~~Restructuring.~~ ~~Restructuring charges for the three months ended September 30, 2022 was comparable to the three months ended September 30, 2021.~~

~~Impairment Charges.~~ Non-cash impairment charges for the three months ended September 30, 2022 decreased $0.6 million compared to the three months ended September 30, 2021, primarily due to impairments in Europe in the prior year period.

~~Interest Expense, Net.~~ Net interest expense for the three months ended September 30, 2022 increased $2.5 million compared to the three months ended September 30, 2021, primarily due to an increase in interest rates on variable rate debt.

~~Other Income, Net.~~ Other income, net, for the three months ended September 30, 2022 increased $0.6 million compared to the three months ended September 30, 2021, primarily due to the favorable impact of foreign exchange.

~~Income Tax Expense.~~ Income tax benefit for the three months ended September 30, 2022 was $0.8 million on losses before income taxes of $34.1 million compared to an income tax expense of $32.1 million on losses before income taxes of $92.7 million for the three months ended September 30, 2021. The effective tax rate for the three months ended September 30, 2022 differed from the effective tax rate for the three months ended September 30, 2021 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 during the three-month period ended September 30, 2022. Additionally, a discrete expense of $31.7 million for the initial recognition of valuation allowance against net deferred tax assets in the U.S. was recorded in the three months ended September 30, 2021.

~~Nine Months Ended September 30, 2022 Compared with Nine Months Ended September 30, 2021~~

~~Sales~~

Sales for the nine months ended September 30, 2022 increased 8.5%, compared to the nine months ended September 30, 2021. The increase in sales was driven by volume and mix (higher net vehicle production volume due to the impact of lessening semiconductor supply issues 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. This was partially offset by 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.

Nine Months Ended September 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 1,876,054 $ 1,728,842 $ 147,212 $ 233,148 $ (64,776) $ (21,160)

* Net of customer price adjustments, including recoveries

~~Gross Profit~~

Nine Months Ended September 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Cost Increases / (Decreases)**
(dollar amounts in thousands)
Cost of products sold $ 1,800,577 $ 1,669,610 $ 130,967 $ 113,720 $ (58,619) $ 75,866
Gross profit 75,477 59,232 16,245 119,428 (6,157) (97,026)
Gross profit percentage of sales 4.0 % 3.4 %

* Net of customer price adjustments, including 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 51% and 47% of total cost of products sold for the nine months ended September 30, 2022 and 2021, respectively. The change in the cost of products sold was impacted by higher volume and mix, commodity inflation, increased labor and overhead costs due to inconsistent volume production schedules, higher compensation related costs and higher energy and transportation costs. These costs were partially offset by foreign exchange, manufacturing efficiencies, purchasing lean savings, restructuring savings and the deconsolidation of a joint venture in the Asia Pacific region.

Gross profit for the nine months ended September 30, ~~2022~~2023 increased ~~27.4%~~199.5%, compared to the nine months ended September 30, ~~2021.~~2022. The change was driven by volume and mix, net of customer price ~~reductions~~adjustments including recovery of cost increases, manufacturing ~~efficiencies,~~and purchasing savings through lean ~~savings~~initiatives and ~~restructuring savings. These items were~~favorable commodity costs, partially offset by ~~commodity~~labor, overhead and ~~wage~~energy inflation ~~higher compensation related costs~~ and ~~the negative impact of~~unfavorable 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 nine months ended September 30, ~~2022~~2023 was ~~7.9%~~7.3% of sales compared to ~~9.7%~~7.9% for the nine months ended September 30, ~~2021.~~2022. The decrease was primarily due ~~the non-recurrence of a prior year credit loss,~~to salaried headcount initiative savings ~~customer recovery of engineering expense,~~ and foreign exchange, partially offset by higher ~~compensation related~~compensation-related costs.

~~Gain~~Loss on Sale of Business, ~~Net.~~ Net~~The gain~~. Loss on sale of business, net ~~of $0.7 million~~ for the nine months ended September 30, ~~2021 related~~2023 was $0.3 million, due to the net effect of our ~~2020 divestitures.~~2023 divestitures, which included the sale of our European technical rubber products business and the sale of our entire controlling equity interest of a joint venture in the Asia Pacific region.

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

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

~~Restructuring.~~Restructuring Charges. Restructuring charges for the nine months ended September 30, ~~2022~~2023 decreased ~~$21.2~~$0.1 million compared to the nine months ended September 30, ~~2021.~~2022. The decrease was primarily driven by lower restructuring charges in ~~Europe.~~Europe and a reversal of restructuring charges in Asia Pacific that were recognized in prior periods, partially offset by higher restructuring charges in North America.

Impairment Charges. Impairment charges for the nine months ended September 30, ~~2022~~2023 decreased ~~$1.0~~$0.2 million, as compared to the nine months ended September 30, ~~2021.~~2022. The decrease was driven by lower impairment charges in Europe and North America, partially offset by the impairment of certain assets in Asia Pacific in the current year period.

Interest Expense, Net. Net interest expense for the nine months ended September 30, ~~2022~~2023 increased ~~$3.2~~$40.7 million compared to the nine months ended September 30, 2022, primarily due to an increase in interest rates on ~~variable rate debt.~~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 nine months ended September 30, 2023 was $81.9 million, which resulted from certain fees and the 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, net for the nine months ended September 30, ~~2022 decreased $1.6~~2023 increased $7.8 million compared to the nine months ended September 30, ~~2021,~~2022, primarily due to ~~favorable~~the unfavorable impact of foreign currency exchange and increased net periodic benefit cost other than service cost, partially offset by a loss on ~~deconsolidation.~~deconsolidation in the prior year period.

Income Tax ~~Expense (Benefit).~~Expense. Income tax expense for the nine months ended September 30, ~~2022~~2023 was $9.5 million on losses before income taxes of $138.7 million compared to income tax expense of $1.8 million on losses before income taxes of $127.3 million ~~compared to income tax expense of $15.6 million on losses before income taxes of $208.5 million~~ for the nine months ended September 30, ~~2021.~~2022. The effective tax rate for the nine months ended September 30, ~~2022~~2023 differed primarily from the effective tax rate for the nine months ended September 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 asset sale transaction in Europe and other tax reserve changes ~~and other permanent items~~ during the nine months ended September 30, 2022. Additionally, a discrete expense of $13.3 million for the initial recognition of valuation allowance against net deferred tax assets in the U.S. was recorded in the nine months ended September 30, 2021.

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

Sales


		Three Months Ended September 30,						Variance Due To:							Three Months Ended September 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2023		2022		Change		Volume/ Mix*		Foreign Exchange		Divestitures
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	351,011	$	270,592	$	80,419	$	80,840	$	(421)	$	—	North America	$	410,906	$	351,011	$	59,895	$	62,323	$	(2,428)	$	—
Europe	Europe	113,670		98,682		14,988		34,726		(19,738)		—		Europe	147,550		113,670		33,880		22,933		10,947		—
Asia Pacific	Asia Pacific	129,493		109,526		19,967		35,932		(9,818)		(6,147)		Asia Pacific	120,617		129,493		(8,876)		(2,861)		(5,252)		(763)
South America	South America	27,073		15,981		11,092		11,129		(37)		—		South America	34,348		27,073		7,275		4,968		2,307		—
Total Automotive	Total Automotive	621,247		494,781		126,466		162,627		(30,014)		(6,147)		Total Automotive	713,421		621,247		92,174		87,363		5,574		(763)
Corporate, eliminations and other	Corporate, eliminations and other	35,906		31,909		3,997		6,097		(2,100)		—		Corporate, eliminations and other	22,617		35,906		(13,289)		(5,571)		351		(8,069)
Consolidated	Consolidated	$	657,153	$	526,690	$	130,463	$	168,724	$	(32,114)	$	(6,147)	Consolidated	$	736,038	$	657,153	$	78,885	$	81,792	$	5,925	$	(8,832)

* 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.

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

Segment adjusted EBITDA


	Three Months Ended September 30,						Variance Due To:
	2023		2022		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases**
	(dollar amounts in thousands)
Segment adjusted EBITDA
North America	$	60,215	$	19,401	$	40,814	$	49,830	$	(9,490)	$	474
Europe	10,057		(10,905)		20,962		18,578		1,705		679
Asia Pacific	8,770		7,523		1,247		(419)		(1,462)		3,128
South America	2,639		766		1,873		1,426		601		(154)
Total Automotive	81,681		16,785		64,896		69,415		(8,646)		4,127
Corporate, eliminations and other	(2,578)		3,720		(6,298)		(1,111)		(678)		(4,509)
Consolidated adjusted EBITDA	$	79,103	$	20,505	$	58,598	$	68,304	$	(9,324)	$	(382)

* Net of customer price adjustments, including recoveries.

** Net of divestitures.

•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.~~environment.

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

3134

~~Segment adjusted EBITDA~~

Three Months Ended September 30, Variance Due To:
2022 2021 Change
Volume/ Mix*
Foreign Exchange Cost (Increases)/ Decreases**
(dollar amounts in thousands)
Segment adjusted EBITDA
North America $ 19,401 $ 8,817 $ 10,584 $ 29,273 $ (1,355) $ (17,334)
Europe (10,905) (25,112) 14,207 16,942 1,205 (3,940)
Asia Pacific 7,523 (14,274) 21,797 10,612 (10) 11,195
South America 766 (3,422) 4,188 2,750 1,060 378
Total Automotive 16,785 (33,991) 50,776 59,577 900 (9,701)
Corporate, eliminations and other 3,720 132 3,588 9,015 28 (5,455)
Consolidated adjusted EBITDA $ 20,505 $ (33,859) $ 54,364 $ 68,592 $ 928 $ (15,156)

* ~~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 semiconductor-related supply issues in the current year period.

•~~The impact of foreign currency exchange was primarily related to the Euro and Brazilian Real, partially offset by the Mexican Peso.~~

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

◦Commodity cost and inflationary economics;

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

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

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

Nine Months Ended September 30, ~~2022~~2023 Compared with Nine Months Ended September 30, ~~2021~~2022

Sales


		Nine Months Ended September 30,						Variance Due To:							Nine Months Ended September 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2023		2022		Change		Volume/ Mix*		Foreign Exchange		Divestitures
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	1,004,592	$	857,153	$	147,439	$	149,236	$	(1,797)	$	—	North America	$	1,144,843	$	1,004,592	$	140,251	$	147,418	$	(7,167)	$	—
Europe	Europe	371,371		397,079		(25,708)		20,605		(46,313)		—		Europe	487,302		371,371		115,931		108,117		7,814		—
Asia Pacific	Asia Pacific	319,025		327,666		(8,641)		27,397		(14,878)		(21,160)		Asia Pacific	326,624		319,025		7,599		26,932		(18,570)		(763)
South America	South America	74,853		45,620		29,233		26,357		2,876		—		South America	96,703		74,853		21,850		19,739		2,111		—
Total Automotive	Total Automotive	1,769,841		1,627,518		142,323		223,595		(60,112)		(21,160)		Total Automotive	2,055,472		1,769,841		285,631		302,206		(15,812)		(763)
Corporate, eliminations and other	Corporate, eliminations and other	106,213		101,324		4,889		9,553		(4,664)		—		Corporate, eliminations and other	86,764		106,213		(19,449)		(11,495)		115		(8,069)
Consolidated	Consolidated	$	1,876,054	$	1,728,842	$	147,212	$	233,148	$	(64,776)	$	(21,160)	Consolidated	$	2,142,236	$	1,876,054	$	266,182	$	290,711	$	(15,697)	$	(8,832)

* Net of customer price adjustments, including ~~recoveries~~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 semiconductor~~the stabilization of the supply environment and elimination of prior year COVID-19 related ~~supply issues~~restrictions in ~~the current year period partially offset by the impact of COVID-19 shutdowns in~~ China ~~and the Ukraine conflict in Europe.~~

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

Segment adjusted EBITDA


		Nine Months Ended September 30,						Variance Due To:						Nine Months Ended September 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)
Segment adjusted EBITDA	Segment adjusted EBITDA														Segment adjusted EBITDA
North America	North America	$	52,338	$	50,806	$	1,532	$	56,443	$	(1,857)	$	(53,054)		North America	$	109,938	$	52,338	$	57,600		$	81,260	$	(21,464)	$	(2,196)
Europe	Europe	(40,878)		(40,992)		114		25,202		3,545		(28,633)			Europe	13,922		(40,878)		54,800			65,057		(1,532)		(8,725)
Asia Pacific	Asia Pacific	(1,018)		(13,024)		12,006		14,631		(2,599)		(26)			Asia Pacific	17,654		(1,018)		18,672			9,065		(1,127)		10,734
South America	South America	(941)		(6,756)		5,815		7,279		2,181		(3,645)			South America	7,942		(941)		8,883			6,937		1,936		10
Total Automotive	Total Automotive	9,501		(9,966)		19,467		103,555		1,270		(85,358)			Total Automotive	149,456		9,501		139,955			162,319		(22,187)		(177)
Corporate, eliminations and other	Corporate, eliminations and other	775		(79)		854		15,873		375		(15,394)			Corporate, eliminations and other	(9,957)		775		(10,732)			579		(776)		(10,535)
Consolidated adjusted EBITDA	Consolidated adjusted EBITDA	$	10,276	$	(10,045)	$	20,321	$	119,428	$	1,645	$	(100,752)		Consolidated adjusted EBITDA	$	139,499	$	10,276	$	129,223		$	162,898	$	(22,963)	$	(10,712)

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

** Net of ~~deconsolidation~~divestitures.

•Volume and mix, net of customer price adjustments including recoveries, was mainly driven by vehicle production volume increases due to ~~a lessening impact on vehicle manufacturers~~the stabilization of the ~~semiconductor~~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 net impact of foreign currency exchange was primarily related to ~~the Euro and Brazilian Real partially offset by the~~ Mexican ~~Peso, Chinese Renminbi and Korean Won.~~Peso.

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

◦Commodity cost and inflationary economics;

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

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

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

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks

The sources to fund our ongoing working capital, capital expenditures, debt service and other funding requirements 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.~~expenditures as a percent of 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 work stoppages related to union contract negotiations with OEMs in North America and the continued impact of COVID-19, and other factors. Based on those actions and current projections of ~~OEM~~light vehicle production and customer ~~production,~~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, ~~and~~ capital expenditures, debt service and other funding requirements for the foreseeable future, despite the challenges facing the industry. Nonetheless, the Company opted to access the ABL Facility in the third quarter as a precautionary measure in view of market uncertainty related to then anticipated OEM labor negotiations and the potential for interruption of light vehicle production. In the fourth quarter, tentative agreements were reached in the OEM labor negotiations, leading the Company to repay the amounts outstanding under the ABL Facility.

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 $357.4 million 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 $357.4 million 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 $580.0 million 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 ~~twelve~~two years. The Company recognized a loss on the refinancing and extinguishment of debt of $81.9 million during the nine months ~~despite~~ended September 30, 2023. Additionally, the ~~challenges presented by~~Company incurred total fees of $91.8 million associated with the ~~COVID-19 pandemic~~Refinancing Transactions, of which $87.6 million were paid during the nine months ended September 30, 2023 and ~~supply chain issues facing~~$4.2 million were paid during 2022. The fees paid during the ~~industry. Our ability to meet our debt service requirements for~~nine months ended September 30, 2023 are reflected as a financing outflow in the ~~next twelve~~condensed consolidated statement of cash flows. Of the fees paid during the nine months ~~is contingent upon our ability to refinance our Term Loan Facility.~~

ended September 30, 2023,

3336

~~Our~~$73.4 million was included in the loss on the refinancing and extinguishment of debt referenced above, $13.2 million is presented as a direct deduction from the principal balance in the condensed consolidated balance sheet, and $1.0 million 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 $580.0 million 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 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 September 30, 2023, the aggregate principal amount of the First Lien Notes of $588.6 million 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 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 September 30, 2023, the Company had $8.8 million of unamortized debt issuance costs and $0.4 million 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.

On the Settlement Date, the Issuer issued $357.4 million 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 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 September 30, 2023, the aggregate principal amount of the Third Lien Notes of $378.2 million 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.

Debt issuance costs related to the Third Lien Notes are amortized into interest expense over the term of the Third Lien Notes. As of September 30, 2023, the Company had $5.5 million 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.

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 statements included in Part I, Item 1 of this Report.

2026 Senior Notes

On November 2, 2016, the Issuer issued $400.0 million 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 $357.4 million aggregate principal amount of the exchanged 2026 Senior Notes to the trustee for cancellation. Following the completion of the Exchange Offer, $42.6 million aggregate principal amount of the 2026 Senior Notes remain outstanding.

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 $7.1 million 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 September 30, 2023 and December 31, 2022, the Company had $0.2 million and $2.7 million 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

On May 29, 2020, the Issuer issued $250.0 million 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.

The Company paid approximately $6.4 million 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 $5.0 million. As of December 31, 2022, the Company had $3.0 million of unamortized debt issuance costs and $2.5 million 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;

•authorize the ABL Facility Collateral Agent 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 $100.0 million letter of credit sub-facility and a $25.0 million swing line sub-facility. The ABL Facility also provides for an uncommitted $100.0 million incremental loan facility, for a potential total ABL Facility of $280.0 million (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 September 30, 2023 was $180.0 million and the monthly fixed charge coverage ratio was at a level that provided the Company full access to the borrowing base. Net of $5.5 million of outstanding letters of credit, and $120.0 million of outstanding borrowings, the Company effectively had $54.5 million available for borrowing under its ABL Facility as of September 30, 2023.

As of September 30, 2023, there was $120.0 million outstanding under the ABL Facility which is recorded in short-term debt in the condensed consolidated balance sheet. The Company opted to access the ABL Facility in the third quarter as a precautionary measure in view of market uncertainty related to then anticipated OEM labor negotiations and the potential for interruption of light vehicle production. This amount was subsequently repaid on November 3, 2023.

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 $30.0 million and 85% of eligible tooling accounts receivable; minus reserves established by the ABL Facility Collateral 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 ABL Facility Collateral Agent. The borrowing base is also subject to certain reserves, which are established by the ABL Facility Collateral Agent (which may include changes to the advance rates indicated above). Loan availability under the ABL Facility is apportioned as follows: $160.0 million to the U.S. Borrower and $20.0 million to the Canadian Borrower.

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

•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.

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.

Debt Issuance Costs. As of September 30, 2023 and December 31, 2022, the Company had $1.0 million and $0.5 million, respectively, of unamortized debt issuance costs related to the ABL Facility recorded in other long-term assets in the condensed consolidated balance sheets.

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

Term Loan Facility

On November 2, 2016, Cooper-Standard Automotive Inc., as borrower, entered into Amendment No. 1 to its senior term loan facility (the “Term Loan Facility”), which provided for loans in an aggregate principal amount of $340.0 million. In connection with the Refinancing Transactions, Cooper-Standard Automotive Inc. repaid the Term Loan Facility ~~matures~~in full on ~~November 2, 2023. The~~the Settlement Date and the Term Loan Facility was terminated.

As of December 31, 2022, the Company ~~has retained Goldman Sachs & Co. LLC as its financial advisor~~had $0.5 million of unamortized debt issuance costs and $0.3 million of unamortized original issue discount related to ~~analyze, evaluate~~the Term Loan Facility. Both the debt issuance costs and ~~help arrange~~the original issue discount were amortized into interest expense over the term of the Term Loan Facility.

For a ~~refinancing~~further description of the Term Loan Facility, see Note 7. “Debt and ~~possibly certain other debt instruments. To the extent the Company is not able to refinance its Term Loan Facility prior~~Other Financing” to the ~~issuance of the~~unaudited condensed consolidated financial statements for the year ended December 31, 2022, our independent auditors may issue an audit opinion including an explanatory paragraph that indicates there is substantial doubt about our ability to continue as a going concern. The inclusionincluded in Part I, Item 1 of such an explanatory paragraph in the report of our independent auditors would breach a covenant under our Term Loan Facility which, unless cured, would constitute an event of default thereunder. Such an event of default would cause a cross-default or cross-acceleration of other indebtedness. In such a case, the Company would not expect that it would have sufficient liquidity to repay all of its outstanding indebtedness at such time. The Company continues its discussions with certain investors with respect to potential refinancing alternatives. While discussions are ongoing, the Company has not reached an agreement with respect to such a transaction for refinancing its capital structure and there can be no assurances that such an agreement will be reached in the future.this Report.

Cash Flows

Operating Activities. Net cash provided by operations was $37.6 million for the nine months ended September 30, 2023, compared to net cash used in operations ~~was~~of $10.4 million for the nine months ended September 30, ~~2022, compared to net cash used in operations of $111.5 million for the nine months ended September 30, 2021.~~2022. The net change was primarily due to improved operating ~~results and~~performance offset by changes in working capital balances, including the receipt of $54.3 million in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss ~~carrybacks.~~carrybacks during the nine months ended September 30, 2022.

Investing Activities. Net cash used in investing activities was $47.5 million for the nine months ended September 30, 2023, compared to net cash used in investing activities of $5.4 million for the nine months ended September 30, ~~2022, compared to~~2022. The net ~~cash used in investing activities of $72.8 million for the nine months ended September 30, 2021. The~~ change was primarily related to proceeds of $50.0 million related to the sale-leaseback of a certain European facility which were received in the nine months ended September 30, 2022, ~~along~~compared with ~~reduced capital spending~~net proceeds of $15.4 million related to our 2023 divestitures which were received in ~~2022.~~the nine months ended September 30, 2023. We expect to continue initiatives to reduce overall capital spending and anticipate that we will spend approximately ~~$80~~$70 - ~~$90~~$80 million on capital expenditures in ~~2022.~~2023.

Financing Activities. Net cash provided by financing activities totaled $39.4 million for the nine months ended September 30, 2023, compared to net cash used in financing activities ~~totaled~~of $6.1 million for the nine months ended September 30, ~~2022, compared~~2022. The net change was primarily due to ~~net cash provided~~$120.0 million of borrowings drawn on our revolving credit facility, partially offset by ~~financing activities~~the impact of ~~$4.7 million for~~ the ~~nine months ended September 30, 2021. The outflow in 2022 was relatively consistent with the outflow in 2021.~~Refinancing Transactions.

Share Repurchase Program

In June 2018, our Board of Directors approved a common stock repurchase program (the “2018 Program”) authorizing us to repurchase, in the aggregate, up to $150.0 million of our 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 us and in accordance with prevailing market conditions and federal securities laws and regulations. We expect to fund any future repurchases from cash on hand and future cash flows from operations. The specific timing and amount of any future repurchase will vary based on market and business conditions, changes in tax laws (including the Inflation Reduction Act) and other factors. We are not obligated to acquire a particular amount of securities, and the 2018 Program may be discontinued at any time at our discretion. As of September 30, ~~2022,~~2023, we had approximately $98.7 million of repurchase authorization remaining under the 2018 Program. We did not make any repurchases under the 2018 Program during the nine months ended September 30, ~~2022~~ 2023 or ~~2021~~.2022.

Non-GAAP Financial Measures

In evaluating our business, management considers EBITDA and Adjusted EBITDA to be key indicators of our operating performance. Our management also uses EBITDA and Adjusted EBITDA:

•because similar measures are utilized in the calculation of the financial covenants and ratios contained in our financing arrangements;

•in developing our internal budgets and forecasts;

•as a significant factor in evaluating our management for compensation purposes;

•in evaluating potential acquisitions;

•in comparing our current operating results with corresponding historical periods and with the operational performance of other companies in our industry; and

•in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as is used by management in their assessments of performance and in forecasting and budgeting for our company.

In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts and other interested parties in evaluating our performance. We define Adjusted EBITDA as net income (loss) plus income tax expense (benefit), interest expense, net of interest income, depreciation and amortization or EBITDA, as adjusted

for items that management does not consider to be reflective of our core operating performance. These adjustments include, but are not limited to, restructuring costs, impairment charges, non-cash fair value adjustments and acquisition-related costs.

EBITDA and Adjusted EBITDA are not financial measurements recognized under U.S. GAAP, and when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA as a supplement to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, nor as an alternative to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of our results of operations as reported under U.S. GAAP. These limitations include:

•they do not reflect our cash expenditures or future requirements for capital expenditure or contractual commitments;

•they do not reflect changes in, or cash requirements for, our working capital needs;

•they do not reflect interest expense or cash requirements necessary to service interest or principal payments under our ABL Facility, Term Loan Facility, New Notes, 2026 Senior Notes and 2024 Senior Secured Notes;

•they do not reflect certain tax payments that may represent a reduction in cash available to us;

•although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and

•other companies, including companies in our industry, may calculate these measures differently and, as the number of differences in the way companies calculate these measures increases, the degree of their usefulness as a comparative measure correspondingly decreases.

In addition, in evaluating Adjusted EBITDA, it should be noted that in the future, we may incur expenses similar to the adjustments in the below presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by special items.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA from net ~~loss,~~income (loss), which is the most comparable financial measure in accordance with U.S. GAAP:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
		(dollar amounts in thousands)									(dollar amounts in thousands)
Net loss attributable to Cooper-Standard Holdings Inc.		$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)
Income tax (benefit) expense		(833)		32,121		1,824		15,598
Net income (loss) attributable to Cooper-Standard Holdings Inc.										Net income (loss) attributable to Cooper-Standard Holdings Inc.	$	11,363	$	(32,686)	$	(146,833)	$	(127,293)
Income tax expense (benefit)										Income tax expense (benefit)	4,338		(833)		9,461		1,824
Interest expense, net of interest income	Interest expense, net of interest income	20,747		18,243		57,378		54,152		Interest expense, net of interest income	33,803		20,747		98,057		57,378
Depreciation and amortization	Depreciation and amortization	30,628		36,049		94,173		105,021		Depreciation and amortization	27,219		30,628		83,017		94,173
EBITDA	EBITDA	$	17,856	$	(36,760)	$	26,082	$	(45,877)	EBITDA	$	76,723	$	17,856	$	43,702	$	26,082
Restructuring charges	Restructuring charges	1,701		1,573		13,014		34,251		Restructuring charges	2,046		1,701		12,924		13,014
Deconsolidation of joint venture (1)	Deconsolidation of joint venture (1)	—		—		2,257		—		Deconsolidation of joint venture (1)	—		—		—		2,257
Impairment charges (2)	Impairment charges (2)	379		1,006		837		1,847		Impairment charges (2)	—		379		654		837
Loss (gain) on sale of business, net (3)		—		—		—		(696)
Loss on sale of businesses, net (3)										Loss on sale of businesses, net (3)	334		—		334		—
Gain on sale of fixed assets, net (4)	Gain on sale of fixed assets, net (4)	—		—		(33,391)		—		Gain on sale of fixed assets, net (4)	—		—		—		(33,391)
Lease termination costs (5)		—		322		—		430

Indirect tax and customs adjustments (6)		569		—		1,477		—

Indirect tax adjustments (5)										Indirect tax adjustments (5)	—		569		—		1,477
Loss on refinancing and extinguishment of debt (6)										Loss on refinancing and extinguishment of debt (6)	—		—		81,885		—

Adjusted EBITDA	Adjusted EBITDA	$	20,505	$	(33,859)	$	10,276	$	(10,045)	Adjusted EBITDA	$	79,103	$	20,505	$	139,499	$	10,276

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

(2)Non-cash impairment charges in ~~2022~~2023 related to certain assets in Asia Pacific and ~~2021~~North America, and non-cash impairment charges in 2022 related to idle assets in Europe.

(3)~~During 2021, we recorded subsequent adjustments to the net gain~~Loss on sale of ~~business, which~~businesses related to ~~the 2020 divestiture of our European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations.~~divestitures in 2023.

(4)In the first quarter of 2022, the Company signed a sale-leaseback agreement on one of its European facilities, and a gain was recognized in the second quarter of 2022.

(5)~~Lease termination costs no longer recorded as restructuring charges~~Impact of indirect tax adjustments in ~~accordance with ASC 842.~~2022.

(6)~~Impact~~Loss on refinancing and extinguishment of ~~prior period indirect tax and customs adjustments.~~

debt relating to the Refinancing Transactions.

3641

Contingencies and Environmental Matters

The information concerning contingencies, including environmental contingencies and the amount currently held in reserve for environmental matters, contained in Note ~~19.~~15. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report, is incorporated herein by reference.

Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the nine months ended September 30, ~~2022.~~2023.

Forward-Looking Statements

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Our use of words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “outlook”, “guidance”, “forecast,” or future or conditional verbs, such as “will,” “should,” “could,” “would,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Among other items, such factors may include: ~~Volatility~~volatility or decline of the Company’s stock price, or absence of stock price appreciation; impacts, including commodity cost increases and disruptions related to the war in Ukraine and the ~~current COVID-related lockdowns in China;~~Middle East; our ability to achieve commercial recoveries and to offset the adverse impact of higher commodity and other costs through pricing and other negotiations with our customers; ~~the impact, and expected continued impact, of the COVID-19 outbreak on~~work stoppages or other labor disruptions with our ~~financial condition and results of operations; significant risks to~~employees or our ~~liquidity presented by the COVID-19 pandemic risk;~~customers’ employees; prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; competitive threats and commercial risks associated with our diversification strategy through our Advanced Technology Group; possible variability of our working capital requirements; risks associated with our international operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness and variable rates of interest; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet customers’ needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal and regulatory proceedings, claims or investigations against us; ~~work stoppages or other labor disruptions;~~the impact, and expected continued impact, of the COVID-19 outbreak on our financial condition and results of operations; significant risks to our liquidity presented by the COVID-19 pandemic risk; the ability of our intellectual property to withstand legal challenges; cyber-attacks, data privacy concerns, other disruptions in, or the inability to implement upgrades to, our information technology systems; the possible volatility of our annual effective tax rate; the possibility of a failure to maintain effective controls and procedures; the possibility of future impairment charges to our goodwill and long-lived assets; our ability to identify, attract, develop and retain a skilled, engaged and diverse workforce; our ability to procure insurance at reasonable rates; and our dependence on our subsidiaries for cash to satisfy our obligations.

You should not place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date of this quarterly report on Form 10-Q, and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This quarterly report on Form 10-Q also contains estimates and other information that is based on industry publications, surveys, and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously disclosed in the Company’s ~~2021~~2022 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company has evaluated, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Based on that evaluation, the Company’s Chief Executive Officer along with the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this Report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended September 30, ~~2022~~2023 that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

3844

PART II — OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

The Company is authorized to purchase, in the aggregate, up to $150 million of our outstanding common stock under our common stock repurchase program, which was effective in November 2018. As of September 30, ~~2022,~~2023, we had approximately $98.7 million of repurchase authorization remaining under our common stock share repurchase program as discussed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Share Repurchase Program,” and Note ~~17.~~14. “Common Stock” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report.

A summary of our shares of common stock repurchased during the three months ended September 30, ~~2022~~2023 is shown below:

Period
Total Number of Shares Purchased(1)
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2022 through July 31, 2022 2,152 $ 4.90 — $ 98.7
August 1, 2022 through August 31, 2022 255 10.96 — 98.7
September 1, 2022 through September 30, 2022 — — — 98.7
Total 2,407 —


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2023 through July 31, 2023	368	$	14.21	—	$	98.7
August 1, 2023 through August 31, 2023	—	—		—	98.7
September 1, 2023 through September 30, 2023	—	—		—	98.7
Total	368			—

(1)Represents shares repurchased by the Company to satisfy employee tax withholding requirements due upon the vesting of restricted stock awards.

3945

Item 5.Other Information

Rule 10b5-1 Trading Arrangements

During the three months ended September 30, 2023, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

Item 6. Exhibits



Exhibit No.						Description of Exhibit

~~10.1*†~~						~~Form of 2022 Cooper-Standard Holdings Inc. 2021 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (cash or stock-settled award) (interim awards).~~

31.1*						Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).

31.2*						Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).

32**						Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH***						Inline XBRL Taxonomy Extension Schema Document

101.CAL***						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF***						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB***						Inline XBRL Taxonomy Label Linkbase Document

101.PRE***						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104***						Cover Page Interactive Data File, formatted in Inline XBRL


*			Filed with this Report.
**			Furnished with this Report.
***			Submitted electronically with this Report in accordance with the provisions of Regulation S-T.
†			Management contract or compensatory plan or arrangement.

4047

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COOPER-STANDARD HOLDINGS INC.

November ~~2, 2022~~3, 2023

/S/ JONATHAN P. BANAS

Date

Jonathan P. Banas
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)

4148



		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Changes in Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2628
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3743
Item 4.	Controls and Procedures	3844

	PART II. OTHER INFORMATION


Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	3945
Item 5.	Other Information	46
Item 6.	Exhibits	4047
SIGNATURES		4148


Year	Operating Leases		Finance Leases
Remainder of 2022	$	6,567	$	756
2023	24,425		3,059
2024	18,619		3,250
2025	15,136		3,274
2026	11,060		3,033
Thereafter	48,714		16,396
Total future minimum lease payments	124,521		29,768
Less imputed interest	(25,127)		(7,015)
Total	$	99,394	$	22,753


	September 30, 2022		December 31, 2021
Land and improvements	$	40,889	$	44,495
Buildings and improvements	253,181		285,240
Machinery and equipment	1,198,754		1,269,330
Construction in progress	79,252		80,868
	1,572,076		1,679,933
Accumulated depreciation	(904,959)		(895,585)
Property, plant and equipment, net	$	667,117	$	784,348


	Gain (Loss) Recognized in OCI
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Forward foreign exchange contracts	$	3,168	$	(1,606)	$	5,064	$	(964)