Deutsche Bank Leveraged Finance...

Deutsche Bank Leveraged Finance Conference

October 1, 2014

244844-64 - CTB investor day - 15Apr14 - V17 (Roy script).pptx 1Draft—for discussion only

Safe Harbor

This presentation contains what the Company believes are forward-looking statements related to future financial results and business operations for Cooper Tire & Rubber Company. Actual results may differ materially from current management forecasts and projections as a result of factors over which the Company may have limited or no control. Information on certain of these risk factors and additional information on forward-looking statements are included in the Company’s reports on file with the Securities and Exchange Commission and set forth at the end of this presentation.

CTB investor day - 6May14 - VF.pptx 2Draft—for discussion only

Americas Tire Operations Business Overview

• Established in 2007

• One manufacturing facility near Guadalajara with our JV partner

• ~1,100 total employees including JV partner

• 4th largest manufacturer in North America1

• Three tire manufacturing facilities (Findlay, Tupelo and Texarkana)

• ~4,900 employees

• Max-Trac Tire Co., Inc. dba Mickey Thompson Performance Tires & Wheels; wholly-owned Cooper subsidiary

• Acquired in 2003• Premium brand,

performance positioning• ~65 employees

Deegan 38CooperDiscoverer AT3

Cooper CS5Ultra Touring

CooperClassic

1. Based on production capacity. Source: Tire Business 2013 Global Tire Report


North America 2013 Unit Sales Breakdown

Cooper increasing exposure to the fastest growing and most attractive segments with a strong portfolio of house brands

Replacement Focus Diversified Product Mix Principally Branded

1%OE Market

Replacement Market

Privatelabel

Housebrands

2% Specialty

1% TBR3% Winter

LightTruckPassenger 74% 20%

99%

69% 31%


Winning Formula for North America Tire Operations

Strategic Focus Areas

Mix and margin enhancement

Continue product launch successes

Focus on growth of the Cooper brand

Convert capacity to grow more premium units

Grow in underpenetrated channels

Deemphasize wholesale private-label business

Become an established OE

supplierGrow OE segment

No more than 10% of business

Enter car dealer replacement channel

Further advance Cooper technology

Grow in Commercial

VehiclesRecover and grow Roadmaster share

Grow in OE segment

Enter fleet replacement channel

Leverage footprint to grow in Latin America

Expand Mexico manufacturing

Continue success in Mexico and Central America

Leverage footprint to grow in the rest of Latin America

1 2 3 4

Diversify and grow in the most attractive segmentsto be our customers' best service/value supplierVision


We Have Been Successfully Shifting Our Mix Toward Premium Segments…

1. Winter, UHP, V-rated, H-rated and SUVSource: Cooper internal data

Cooper PCR / SUV mix Several Drivers of Premium Mix Shift

• Increasing pace of branded new product development with focus on premium segments

• Accelerating capacity conversion to support premium unit growth

• Growing our branded PCR and SUV share in underpenetrated channels

• Continuing Mickey Thompson growth in the specialty segment

• Raising brand awareness through targeted advertising spend2009

% of Cooper volume

20132011

T & below

Premium segments(Winter, UHP, H, V, and SUV)

Next level(by 2017)

Operating profits for “premium segments" 5 to 15 timeshigher than T & below rated tires

Mix & margin enhancement1


Cooper Becoming an Established OE Supplier in North America

0

250

500

Million units

OE

Replacement79%

21%

2017E

2.6%

333

2013

368

23%

77%

4%

2%

CAGR'13-17

Become an established OE supplier2

We expect OE to be no more than 10% of our businesswhile maintaining focus on the replacement segment

OE is a faster-growing segment and market conditions for OE profitability have improved

We have the right technology and products

OE generates pull for replacement market, increases penetration in car dealership channels

Also enhances brand awareness

Ultimately, it compels us to always get better!

OE Growing Twice as Fast as Replacement Market1 in North America2

We Have a Strong Rationale for Entering the OE Business Now

1. Includes PCR and LT. 2. United States, Canada, and Mexico. Source: LMC Automotive


We Are Increasing Our TBR Market Share in North America...

Our Focus on Recuperating Roadmaster Share in 2014... ...While Growing in Fleet and OE

Significant growth opportunity for Cooper, and currently building in-house expertise and capabilities:

• National Accounts Program• 24/7 Fleet Emergency Service• Fleet Engineer team

Success in fleets also a pull-through in OE segment

Increased investments in sales and marketing

Our TBR margins ~2–3 times higher than PCR/LT margins

Grow in Commercial Vehicles3

TBR unit sales -46%

+33% CAGR

2013201220102008

Supply issue due to labor disruptions at CCT resolved

Began delivering Roadmaster products in Q1 2014

Winning back positions with key customers


...And Growing in Mexico, Brazil and Latin America by Leveraging Mexico LCC Manufacturing

Low cost, near-sourced manufacturing facility• Lower labor and distribution cost• Faster response to market demand changes

Reduced duties for major Latin American markets

Opportunity to raise capacity by 50% to accelerate LT and PCR production

Chile 2017F(Millions)

Population 18Replacementtire demand1 5

Brazil 2017F(Millions)


Colombia 2017F (Millions)

Population 48Replacement tire demand1 7

We are targeting 4–5 million units in Latin America by 2020

Leverage footprint to grow in Latin America4

Mexico 2017F (Millions)


Cooper tire manufacturing

facility near Guadalajara

1. Annual replacement unit demand for PCR, LT and TBRSource: LMC Automotive

Leveraging Strong Asset in Mexico… ...To Grow in Latin America


International Tire Operations Business Overview

Cooper Tire Asia

~5,800 employees

Established operations in 2006

Two manufacturing facilities in China: Rongcheng (CCT) and Kunshan (CKT)

Asia Technical Center opened in 2008, moved to new facility in 2014

Cooper Tire Europe

~1,400 employees

Acquired operations in 1997

Two manufacturing facilities in Europe: Melksham (U.K.) and Krusevac (Serbia)

European Technical Center opened in 2007


International Segment 2013 Unit Sales Breakdown

Improving product and channel mixwith strong house brands

OE Market

Replacement Market

Motorcycle2% Winter

Light TruckPassenger

TBR

UHP

Privatelabel8%House

brands

Source: Cooper internal data

Replacement Focus Product Diversification Principally Branded

85%

15%

44%

26%

13%

7% 8%

92%


Winning Formula for International Tire Operations

Achieve profitable, sustainable growth in our International segment to account for 50% of total company salesVision

PCR / TBR growth in China

Penetrate China OE market

Profitable growth in

Western Europe

Strategic Focus Areas

Leverage our sourcing for growth in Eastern Europe

Increase pace of new product launches to meet customer needs

Grow in long distance and city bus, as well as long-haul truck

Improve PCR/TBRdistribution channels

Expand our OEposition in China

Generate consumer pull via increased brand recognition

Clarify and strengthen product offering to customers

Improve Cooper brand awareness and growth

Grow profitably in key markets (U.K., Germany)

Improve service through local sourcing

Improve manufacturing cost competitiveness

Grow in high potential Eastern European countries and Russia

1 2 43


We Quickened the Pace of New Product Introductions to Meet Customer Needs in PCR and TBR

Near-termtarget

+81%

20132008

+72%

Total PCR SKUs

Unique R&D center: local design and

faster time to market

Unique footprint with two

manufacturing facilities

1

Cooper Weather-Master Ice 100

Dean D280

New product focus on driving meaningful

position in long-haul truck & bus segments

Strong PCR offering across major segments

• 4x4/SUV • UHP• Winter• Low rolling

resistance

In Recent Years, We Launched More New Products Than Ever Before

Cooper Now Positioned to Address Customer Needs in PCR/TBR

PCR/TBR growth in China


OE Presence is Vital to Win in China

2 Penetrate China OE market

Note: Figures include demand for PCR and Light TruckSource: LMC Automotive

0

250

500

12%

2017E

375

60%

40%

2013

235

57%

43%

Million units

In China, OE Accounts for ~40%of total PCR and LT demand Growth in OE is Vital to Win in China

OE segment for PCR and LT make up ~40% of market demand in China and growing rapidly at ~11% per year

Consumers have a strong sense of brand in China and OE fittings drive consumer pull for replacement tires

• High preference for OE brand in first and second replacements

OE presence also important to raise brand awareness and consideration

11%

ReplacementOE

13%


We Are Focused on Growing our Solid Position in the U.K. and Capturing Profitable Growth in Germany

GermanyUnited

Kingdom

Note: Figures include demand for PCR, light truck and TBRSource: LMC Automotive

United Kingdom

3533

0

20

40

60

Total replacementdemand (M units)

1%

2017F2013

Germany

6458

0

50

100

2017F

Total replacementdemand (M units)

3%

2013

• Largest market in Europe• Increased market share in 2013

with strong growth in W,Y,Z rated PCR and SUV segments

• Leveraging new product successes to grow Cooper brand awareness

3 Profitable growth in Western Europe

• Cooper one of the top 5 players with well established brands and distribution footprint

• Melksham production facility to serve local demand

• Profitable niche and premium strategy (e.g. UHP, motorcycle, racing tires)


Plans to Expand Presence in High Potential Countries in Eastern Europe

RussiaEstonia

Latvia

Lithuania

Romania

Bulgaria

Ukraine

Hungary

Czech Rep.

Poland

Belarus

Serbia

Note: Figures include OE and replacement demand for PCR, light truck and TBRSource: LMC Automotive

Eastern Europe (including Russia)

163

129

0

50

100

150

200

Total demand (units)

2017F

6%

2013

• Fastest growing markets in Europe

• Leverage manufacturing presence in Serbia – LCC cost advantage – Duty free into both EU & Russia

• Plans to increase sales force and resources in Eastern Europe

4 Leverage our sourcing for growth in Eastern Europe

Slovakia

Financial Update


2014 Off to a Great Start with Strong Results

...And Operating Margin Increased 12 Percent

889 884

0

200

400

600

800

1,000

2Q ‘14

Net sales ($M)1%

2Q ‘13

8.67.8

0

5

10

15

2Q ‘132Q ‘14

Operating margin

+12%

9

5

0

2

4

6

8

10

NorthAmerica

2Q '14 – 2Q '13 volume growth (%)

International

2Q Net sales Rose 1 Percent From Strong Unit Growth

Source: Cooper quarterly financial reports


We Have a Strong Balance Sheet That Gives us Financial Flexibility

398346

0

200

400

600

Cash and cash equivalents ($M)+15%

Q4 ’13Q4 ’07

16

38

0

20

40

2013

-22

Debt/Enterprise value1

2008

$200MAsset backed revolving

credit facilityParent

company

Asiasubsidiary

$175MAccounts receivable

securitization program

$348MUnsecured annually renewable

credit lines

1. Debt is short-term debt, current portion of long-term debt and long-term debt

...With Ample Financing FlexibilityHealthy Balance Sheet...


We Carefully Consider How to Best Allocate Capital to High Shareholder Return Opportunities

16 1611

2214

-14

8

-20

-10

0

10

20

30

2011 2012 20132010

ROIC1

2007 20092008

1. Return on Invested Capital, including non-controlling equity

ROIC weighted averagein last five years = 16%

Different Alternatives forUsing Excess Cash

Fund maintenance projects

Pursue high ROIC projects• E.g. U.S. plant automation, product mix change

Expand capacity to support growth• Within current plant footprint ...• ... or beyond, e.g., Serbia

Maintain strong balance sheet including pension funding

Return capital to shareholders: • Regular dividends (set based on ability to

maintain through recessions)• Buybacks or special dividend

In the Last Five Years, We Efficiently Deployed Capital


CCT Ownership Key to Decisions About Capital Deployment

Independent valuation firm

determined the fair market value of the

joint venture

• Well-built asset with a great track record

• Likely to continue to look at other growth opportunities, e.g. M&A

• Cooper maintains supply via offtakerights for at least three years

• Several options available, e.g. brown and greenfield

Must be resolved before we can determine long-term capital deployment plans

Cooper Buys CCT Cooper Sells CCT


We Have Set Bold Aspirations for the Future

Cooper today

Long-term (end of decade)

$3.4Bnet sales

7%operating

margin

8-10%operating margin on a

consistent basis

$5-6Bnet sales

10+%operating

margin


It is possible that actual results may differ materially from projections or expectations due to a variety of factors, including but not limited to: • volatility in raw material and energy prices, including those of rubber, steel, petroleum based products and natural gas and the unavailability of such raw materials or energy sources; • the failure of the Company’s suppliers to timely deliver products in accordance with contract specifications; • changes in economic and business conditions in the world; • failure to implement information technologies or related systems, including failure by the Company to successfully implement an ERP system; • increased competitive activity including actions by larger competitors or lower-cost producers; • the failure to achieve expected sales levels; • changes in the Company’s customer relationships, including loss of particular business for competitive or other reasons; • the ultimate outcome of litigation brought against the Company, including stockholders lawsuits relating to the Apollo merger as well as products liability claims, in each case which

could result in commitment of significant resources and time to defend and possible material damages against the Company or other unfavorable outcomes; • changes to tariffs or the imposition of new tariffs or trade restrictions; • changes in pension expense and/or funding resulting from investment performance of the Company’s pension plan assets and changes in discount rate, salary increase rate, and

expected return on plan assets assumptions, or changes to related accounting regulations; • government regulatory and legislative initiatives including environmental and healthcare matters; • volatility in the capital and financial markets or changes to the credit markets and/or access to those markets; • changes in interest or foreign exchange rates; • an adverse change in the Company’s credit ratings, which could increase borrowing costs and/or hamper access to the credit markets; • the risks associated with doing business outside of the United States; • the failure to develop technologies, processes or products needed to support consumer demand; • technology advancements; the inability to recover the costs to develop and test new products or processes; • the impact of labor problems, including labor disruptions at the Company, its joint ventures, including CCT, or at one or more of its large customers or suppliers; • failure to attract or retain key personnel; • consolidation among the Company’s competitors or customers; • inaccurate assumptions used in developing the Company’s strategic plan or operating plans or the inability or failure to successfully implement such plans; • failure to successfully integrate acquisitions into operations or their related financings may impact liquidity and capital resources; • the ability to sustain operations at CCT, including obtaining financial and other operational data of CCT; • changes in the Company’s relationship with its joint-venture partners, or changes in the ownership structure of its joint ventures, including changes resulting from the previously

announced agreement between the Company and the CCT joint-venture partner; • the inability to obtain and maintain price increases to offset higher production or material costs; • inability to adequately protect the Company’s intellectual property rights; • inability to use deferred tax assets; and • the ultimate outcome of legal actions brought by the Company against wholly-owned subsidiaries of Apollo Tyres Ltd.

Risks


Available Information

You can find Cooper Tire on the web at coopertire.com. Our company webcasts earnings calls and presentations from certain events that we participate in or host on the investor relations portion of our website (http://coopertire.com/investors.aspx). In addition, we also make available a variety of other information for investors on the site. Our goal is to maintain the investor relations portion of the website as a portal through which investors can easily find or navigate to pertinent information about Cooper Tire, including:

• Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file that material or furnish it to the Securities and Exchange Commission (“SEC”);

• Information on our business strategies, financial results and selected key performance indicators;• Announcements of our participation at investor conferences and other events;• Press releases on quarterly earnings, product and service announcements and legal developments;• Corporate governance information; and,• Other news and announcements that we may post from time to time that investors may find relevant.

The content of our website is not intended to be incorporated by reference into this presentation or in any report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

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