UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A No. 1
(Mark One)
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1998
or
( ) 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 1-4329
COOPER TIRE & RUBBER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 34-4297750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Lima and Western Avenues, Findlay, Ohio 45840
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (419) 423-1321
Securities registered pursuant to Section 12(b) of the Act:
(Name of each exchange on
(Title of each class) which registered)
Common Stock, $1 par per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. (X)
State the aggregate market value of the voting stock held by non-
affiliates of the registrant (computed by reference to the closing price
on the Composite Tape for securities listed on the New York Stock
Exchange as of March 8, 1999). $1,516,705,360
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
(Class) (Outstanding at March 8, 1999)
Common Stock, $1 par per share 75,835,268
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K into which the document is incorporated:
Proxy statement dated March 23, 1999 - Part III
EXHIBIT INDEX appears on the following two pages
<PAGE>
INDEX TO FINANCIAL STATEMENTS, SCHEDULE AND EXHIBITS
(As amended June 28, 1999 to file financial statements and supplemental
schedules for the employee benefit plans identified below as exhibits (99))
Page(s)
FINANCIAL STATEMENTS: Reference
---------
Consolidated Statements of Income for the years
ended December 31, 1998, 1997 and 1996
Consolidated Balance Sheets at December 31, 1998 and 1997
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows for the years
ended December 31, 1998, 1997 and 1996
Notes to Financial Statements
Report of Independent Auditors
SUPPLEMENTARY INFORMATION:
Quarterly Financial Data (Unaudited)
FINANCIAL STATEMENT SCHEDULE:
II. Valuation and qualifying accounts
EXHIBITS:
(3) Certificate of Incorporation and Bylaws
(i) Certificate of Incorporation, as restated and filed with
the Secretary of State of Delaware on May 17, 1993, is
incorporated herein by reference from Exhibit 3(i) of the
Company's Form 10-Q for the quarter ended June 30, 1993
Certificate of Correction of Restated Certificate of
Incorporation as filed with the Secretary of State of
Delaware on November 24, 1998.
(ii) Bylaws, as amended May 5, 1987, are incorporated herein
by reference from Exhibit 19 of the Company's Form 10-Q
for the quarter ended June 30, 1987
(4) Amended and Restated Rights Agreement, dated May 11, 1998, between
the Company and The Fifth Third Bank as Rights Agent is
incorporated herein by reference from Exhibit 4 to the Company's
Form 8-K dated May 15, 1998.
(10) Description of management contracts, compensatory plans, contracts,
or arrangements is incorporated herein by reference from pages 5
through 10 and 19 of the Company's Proxy Statement dated
March 23, 1999.
The following related documents are incorporated by reference:
a) 1981 Incentive Stock Option Plan - Form S-8
Registration Statement No. 2-77400, Exhibit 15(a)
b) 1986 Incentive Stock Option Plan - Form S-8
Registration Statement No. 33-5483, Exhibit 4(a)
c) Thrift and Profit Sharing Plan - Form S-8
Registration Statement No. 2-58577, Post-Effective
Amendment No. 6, Exhibit 4
d) 1991 Stock Option Plan for Non-Employee Directors -
Form S-8 Registration Statement No. 33-47980 and
Appendix to the Company's Proxy Statement dated
March 26, 1991
e) 1996 Stock Option Plan - Form S-8 Registration Statement
No. 333-09619 and Appendix to the Company's Proxy
Statement dated March 26, 1996
(continued)
<PAGE>
(12) Computation of Ratio of Earnings to Fixed Charges
(13) Annual report to security holders, Form 10-Q or quarterly
report to security holders
(23) Consent of Independent Auditors
(24) Powers of Attorney
(27) Financial Data Schedule
(99) Undertakings of the Company
Financial statements and schedules of the Cooper Tire &
Rubber Company Thrift and Profit Sharing Plan for the
fiscal year ended December 31, 1998 1-15
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Texarkana) for the
fiscal year ended December 31, 1998 16-30
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Auburn) for the
fiscal year ended December 31, 1998 31-45
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Findlay) for the
fiscal year ended December 31, 1998 46-60
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (El Dorado) for the
fiscal year ended December 31, 1998 61-75
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Bowling Green - Hose)
for the fiscal year ended December 31, 1998 76-90
Financial statements and schedules of the Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Bowling Green - Sealing)
for the fiscal year ended December 31, 1998 91-105
All other schedules have been omitted since the required information is
not present or not present in amounts sufficient to require submission
of the schedules, or because the information required is included in the
financial statements or the notes thereto.
<PAGE>
SIGNATURES
Registrant has duly caused this Form 10-K/A No. 1 to be signed on
its behalf by the undersigned, thereunto duly authorized.
COOPER TIRE & RUBBER COMPANY
PATRICK W. ROONEY, Chairman of the Board, Chief
Executive Officer and Director
(Principal Executive Officer)
THOMAS A. DATTILO, President, Chief Operating Officer
and Director
JOHN FAHL, Vice President and Director
PHILIP G. WEAVER, Vice President
(Principal Financial Officer)
EILEEN B. WHITE, Corporate Controller
(Principal Accounting Officer)
ARTHUR H. ARONSON, Director
EDSEL D. DUNFORD, Director
DEBORAH M. FRETZ, Director
DENNIS J. GORMLEY, Director
JOHN F. MEIER, Director
BYRON O. POND, Director
JOHN H. SHUEY, Director
By /s/ Stan C. Kaiman
--------------------------------
STAN C. KAIMAN, Attorney-in-fact
Date: June 28, 1999
--------------
<PAGE>
EXHIBIT (23)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 2-58577, 33-35071, 33-47979, 33-47981, 33-
47982, 33-52499, and 33-52505) of Cooper Tire & Rubber Company
pertaining to the Company's Thrift and Profit Sharing Plan, the Pre-Tax
Savings Plan (Texarkana), the Pre-Tax Savings Plan (Auburn), the Pre-Tax
Savings Plan (Findlay), the Pre-Tax Savings Plan (El Dorado), the Pre-
Tax Savings Plan (Bowling Green - Hose) and the Pre-Tax Savings Plan
(Bowling Green - Sealing), respectively, of our reports dated May 14,
1999 with respect to the financial statements and schedules of the
Cooper Tire & Rubber Company Thrift and Profit Sharing Plan, the Cooper
Tire & Rubber Company Pre-Tax Savings Plan (Texarkana), the Cooper Tire
& Rubber Company Pre-Tax Savings Plan (Auburn), the Cooper Tire & Rubber
Company Pre-Tax Savings Plan (Findlay), the Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado), the Cooper Tire & Rubber Company Pre-
Tax Savings Plan (Bowling Green - Hose), and the Cooper Tire & Rubber
Company Pre-Tax Savings Plan (Bowling Green - Sealing) included in
Amendment No. 1 to the Annual Report (Form 10-K) of Cooper Tire & Rubber
Company for the year ended December 31, 1998.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
Toledo, Ohio
June 28, 1999
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
1
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Thrift and Profit Sharing
Plan as of December 31, 1998 and 1997, and the related statements of
changes in assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Thrift and Profit Sharing Plan at
December 31, 1998 and 1997, and the changes in its assets available for
plan benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
2
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
------------ ------------
<S> <C> <C>
Assets
Investments (Notes 4 and 5):
Value of interest in Pooled Fund $208,266,377 $271,917,956
Cooper Tire & Rubber Company common stock 8,198,254 5,745,968
Mutual funds:
Short-term investment 490,510 162,402
Washington Mutual Investors Fund 18,318,800 331,025
Investment Company of America 33,875,469 20,679
----------- -----------
269,149,410 278,178,030
Cash 1,211,850 5,108,412
Employer contribution receivable 2,384,271 3,654,337
----------- -----------
Assets available for plan benefits $272,745,531 $286,940,779
=========== ===========
<FN>
See accompanying notes.
</TABLE>
2
3
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year ended December 31
1998 1997
----------- -----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $18,935,001 $11,784,022
Employer (gross amount before
reduction for forfeitures) 9,851,922 8,568,810
Less forfeitures arising from withdrawals (273,043) (206,362)
---------- -----------
Net employer contributions 9,578,879 8,362,448
---------- -----------
28,513,880 20,146,470
Investment income (loss):
Net gain (loss) from Pooled Fund (Note 4) (11,707,244) 49,701,339
Net (depreciation) appreciation in fair
value of Cooper Tire & Rubber Company
common stock and mutual funds (417,163) 357,002
Dividends 4,291,559 29,094
Interest 24,290 904,965
----------- -----------
(7,808,558) 50,992,400
----------- -----------
Total additions 20,705,322 71,138,870
Participants' withdrawals (34,900,570) (34,133,280)
----------- -----------
Increase (decrease) in assets available for
plan benefits during the year (14,195,248) 37,005,590
Assets available for plan benefits at
beginning of year 286,940,779 249,935,189
----------- -----------
Assets available for plan benefits at
end of year $272,745,531 $286,940,779
=========== ===========
<FN>
See accompanying notes.
</TABLE>
3
4
<PAGE>
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Thrift and Profit Sharing Plan (Plan),
is a defined contribution plan administered by a Plan Committee
appointed by the plan sponsor, Cooper Tire & Rubber Company (the
Company). Participation in the Plan is voluntary and any salaried
employee of the Company is eligible to participate in the Plan if he or
she has completed one year of continuous credited service. At December
31, 1998, 4,862 participants had designated investment of contributions
in one or more investment options of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides the following:
- After-tax dollar (ATD) contributions may be made in one percent
multiples of participant's compensation up to sixteen percent.
- Pre-tax dollar qualifier (PDQ) contributions may be made in one
percent multiples of participant's compensation up to fifteen
percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan.
- In no event shall the aggregate of a participant's contributions
exceed sixteen percent of participant's compensation.
- The Company will contribute to the Plan each year from current or
accumulated earnings an amount equal to the lesser of:
(a) the aggregate of all ATD and PDQ contributions which represent up
to six percent of each participant's compensation, less any
forfeitures, or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
(continued)
4
5
<PAGE>
1. Summary of Plan (continued)
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
The Company's contributions are allocated to each participant's account
in proportion to his or her ATD contributions and PDQ contributions up
to an aggregate of six percent of the participant's compensation for
each year. The Company contribution to a participant's account becomes
vested after five years of continuous credited service; thereafter,
Company contributions become vested when made. In addition,
participants will have a fully vested right to the Company's
contributions upon termination from the Plan due to retirement, total
and permanent disability, or death and shall be eligible to receive the
Company's contribution for that year as if he or she had not terminated
participation. Earnings attributed to Company contributions allocated
to a participant's account and those attributed to a participant's
contributions are vested immediately.
The Plan provides for total or partial withdrawal of a participant's
account. Except for the unvested portion of Company contributions, a
participant may withdraw the total of his or her ATD contributions and
Company contributions at any time. No amounts may be withdrawn by a
participant from PDQ contributions prior to termination of employment or
plan termination unless the participant has either attained the age of
59 1/2, becomes totally and permanently disabled, or is able to
demonstrate financial hardship. However, all withdrawals relating to
PDQ contributions are subject to the Internal Revenue Code (IRC) and
regulations thereunder.
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
The Company has reserved the right to amend, modify, suspend or
terminate the Plan at any time by action of its Board of Directors.
Upon termination of the Plan, or upon the complete discontinuance of
Company contributions under the Plan, the rights of each participant to
the assets then held for his or her account under the Plan shall be
nonforfeitable.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
(continued)
5
6
<PAGE>
2. Significant Accounting Policies (continued)
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value based on the net asset value
thereof on the last business day of the Plan year.
The Plan of Rehabilitation for Confederation Life became final on
November 13, 1996. On March 12, 1997, the Company was notified the
Rehabilitator had determined a fair value of the Confederation Life
contracts held by the Thrift Plan was equal to 109.26% of the August,
1994 contract value. This adjustment was made by the Trustee effective
March 31, 1997. On or about June 2, 1997, the total value of the
Confederation Life account was unfrozen and rolled into the Cash with
Interest Fund.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
6
7
<PAGE>
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
7
8
<PAGE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
(continued)
8
9
<PAGE>
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $208,266,377 at
December 31, 1998 and $271,917,956 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
----- -----
Cooper Tire & Rubber Company Common Stock Fund 90.2% 91.6%
Cash with Interest Fund 92.0% 94.4%
The Investment Company of America Fund - 84.5%
The Washington Mutual Investors Fund - 87.9%
9
10
<PAGE>
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
The Plan's net investment loss from the Pooled Fund is $11,707,244 for
the year ended December 31, 1998 and a net investment gain of
$49,701,339 for the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
10
11
<PAGE>
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $(417,163) $ 65,450
Armada Government Portfolio
Fund $ 24,290
Investment Co. of America
Com 1,496,629
Washington Mutual Investors
Fund 2,729,480
-------- --------- -------
Totals $(417,163) $4,291,559 $ 24,290
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $357,002 $ 29,094
Armada Government Portfolio
Fund $904,965
------- --------- -------
Totals $357,002 $ 29,094 $904,965
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
11
12
<PAGE>
Schedules
12
13
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Employer Identification #34-4297750; Plan #005
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----------
<S> <C> <C> <C>
*Cooper Tire & Rubber
Company common stock 401,128 $ 7,216,175 $ 8,198,254
Mutual funds:
*Armada Government Money Market 359,060 359,060 359,060
*Armada Government Portfolio 131,450 131,450 131,450
American Funds - Washington 589,598 17,862,313 18,318,800
Mutual Investors Fund
American Funds - Investment Co. 1,029,337 34,523,128 33,875,469
of America Com ---------- ----------
$60,092,126 $60,883,033
========== ==========
<FN>
*Party-in-interest
</TABLE>
13
14
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Thrift and Profit Sharing Plan
Employer Identification #34-4297750; Plan #005
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $11,106,749 $11,026,645 $11,026,645 $ -
Cooper Tire & Rubber
Company common stock 11,046,234 - - -
American Washington
Mutual Investors Fund 9,933,239 11,194,718 11,717,825 (523,107)
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
15
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
16
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan
(Texarkana) as of December 31, 1998 and 1997, and the related statements
of changes in assets available for plan benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Texarkana) at
December 31, 1998 and 1997, and the changes in its assets available for
plan benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
17
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
----------- -----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $10,452,955 $11,197,324
Cooper Tire & Rubber Company Common Stock - 158,974
Mutual funds 2,261,640 1,706
---------- ----------
12,714,595 11,358,004
Cash 73,171 173,654
Employer contribution receivable 243,855 91,811
Employee contribution receivable 31,173 -
---------- ----------
Assets available for plan benefits $13,062,794 $11,623,469
========== ==========
<FN>
See accompanying notes.
</TABLE>
2
18
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year Ended December 31
1998 1997
----------- -----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 2,130,720 $ 1,767,097
Employer 250,016 238,769
---------- ----------
2,380,736 2,005,866
Investment income (loss):
Net gain from Pooled Fund (Note 4) (188,000) 2,025,254
Net depreciation in fair value of Cooper
Tire & Rubber Company Common Stock - (3,347)
Net depreciation in fair value of
common stock and mutual funds (50,492) -
Dividends 180,355 1,494
Interest 256 316
---------- ----------
(57,881) 2,023,717
---------- ----------
Total additions 2,322,855 4,029,583
Participants' withdrawals (883,530) (1,026,258)
---------- ----------
Increase in assets available for plan
benefits during the year 1,439,325 3,003,325
Assets available for plan benefits at
beginning of year 11,623,469 8,620,144
---------- ----------
Assets available for plan benefits at
end of year $13,062,794 $11,623,469
========== ==========
<FN>
See accompanying notes.
</TABLE>
3
19
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Texarkana)
(Plan), as amended and restated, is a defined contribution plan
administered by a Plan Committee appointed by the plan sponsor, Cooper
Tire & Rubber Company (the Company). Participation in the Plan is
voluntary and any employee of the Company eligible for membership in
Local Union #752, United Steelworkers of America AFL-CIO/CLC (Union) is
eligible to participate in the Plan if he or she has completed thirty
days of continuous credited service. At December 31, 1998, 902
participants had designated investment of contributions in one or more
investment options of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 25% of PSP contributions which represent up to four percent of
each participant's compensation, less any forfeitures, or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
(continued)
4
20
<PAGE>
1. Summary of Plan (continued)
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until March 5, 1999. Thereafter it shall renew
itself for yearly periods unless written notice is given by the Company
or the Union that it is desired to terminate or amend the Plan. The
Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
values thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
5
21
<PAGE>
2. Significant Accounting Policies (continued)
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
(continued)
6
22
<PAGE>
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
(continued)
7
<PAGE> 23
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
(continued)
8
24
<PAGE>
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $10,452,955 at
December 31, 1998 and $11,197,324 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 4.5% 4.1%
Cash with Interest Fund 4.7% 2.8%
The Investment Company of America Fund - 2.7%
The Washington Mutual Investors Fund - 4.3%
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
9
<PAGE> 25
The Plan's net investment loss from the Pooled Fund is $188,000 for the
year ended December 31, 1998 and a net investment gain of $2,025,254 for
the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $ 377 $ 999
Armada Government Portfolio
Fund $ 256
Investment Co. of America
Com (23,962) 46,312
Washington Mutual Investors
Fund (26,907) 133,044
-------- --------- -------
Totals $ (50,492) $ 180,355 $ 256
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ (3,347) $ 1,494
Armada Government Portfolio
Fund $ 316
------- --------- -------
Totals $ (3,347) $ 1,494 $ 316
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
10
26
<PAGE>
6. Year 2000 Issue (unaudited) (continued)
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Washington Mutual
Investors Fund $1,675,964 $ -
11
27
<PAGE>
Schedules
12
28
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Employer Identification #34-4297750; Plan #012
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- ------
<S> <C> <C> <C>
Mutual funds:
*Armada Government Portfolio Fund 6,341 $ 6,341 $ 6,341
American Funds - Investment Co.
of America Com 18,647 577,492 579,335
American Funds - Washington Mutual
Investors Fund 50,926 1,705,302 1,675,964
--------- ---------
$2,289,135 $2,261,640
========= =========
<FN>
*Party-in-interest
</TABLE>
13
29
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana)
Employer Identification #34-4297750; Plan #012
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 99,599 $ 98,405 $ 98,405 $ -
Cooper Tire & Rubber
Company common stock 98,329 - - -
American Funds -
Investment Co. of
America Com 724,561 692,149 683,492 8,657
American Funds -
Washington Mutual
Investors Fund 10,007,746 1,882,840 1,955,501 72,661
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
30
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
31
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan
(Auburn) as of December 31, 1998 and 1997, and the related statements of
changes in assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Auburn) at
December 31, 1998 and 1997, and the changes in its assets available for
plan benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
32
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
---------- ----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $1,152,172 $1,391,753
Cooper Tire & Rubber Company Common Stock - 30,591
Mutual funds 565,298 351
--------- ---------
1,717,470 1,422,695
Cash 1,335 33,005
Employer contribution receivable 107,372 26,459
Employee contribution receivable 7,596 -
--------- ---------
Assets available for plan benefits $1,833,773 $1,482,159
========= =========
<FN>
See accompanying notes.
</TABLE>
2
33
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year Ended December 31
1998 1997
---------- ----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 365,154 $ 342,846
Employer 107,372 54,762
--------- ---------
472,526 397,608
Investment income (loss):
Net gain from Pooled Fund (Note 4) 35,186 228,535
Net depreciation in fair value of Cooper
Tire & Rubber Company Common Stock - (367)
Net depreciation in fair value of
common stock and mutual funds (113,263) -
Dividends 46,282 286
Interest 45 64
--------- ---------
(31,750) 228,518
--------- ---------
Total additions 440,776 626,126
Participants' withdrawals (89,162) (54,629)
--------- ---------
Increase in assets available for plan
benefits during the year 351,614 571,497
Assets available for plan benefits at
beginning of year 1,482,159 910,662
--------- ---------
Assets available for plan benefits at
end of year $1,833,773 $1,482,159
========= =========
<FN>
See accompanying notes.
</TABLE>
3
34
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Auburn) (Plan),
as amended and restated, is a defined contribution plan administered by
a Plan Committee appointed by the plan sponsor, Cooper Tire & Rubber
Company (the Company). Participation in the Plan is voluntary and any
employee of the Company eligible for membership in Local Union #634,
United Steelworkers of America AFL-CIO/CLC (formerly United Rubber,
Cork, Linoleum and Plastic Workers of America) (Union) is eligible to
participate in the Plan if he or she has completed thirty days of
continuous credited service. At December 31, 1998, 260 participants had
designated investment of contributions in one or more investment options
of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 50% (25% in 1997) of PSP contributions which represent up to four
percent of each participant's compensation, less any forfeitures,
or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
(continued)
4
35
<PAGE>
1. Summary of Plan (continued)
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until December 5, 2000. Thereafter it shall
renew itself for yearly periods unless written notice is given by the
Company or the Union that it is desired to terminate or amend the Plan.
The Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
value thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
(continued)
5
36
<PAGE>
2. Significant Accounting Policies (continued)
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
(continued)
6
37
<PAGE>
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
(continued)
7
38
<PAGE>
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
(continued)
8
<PAGE> 39
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $1,152,172 at
December 31, 1998 and $1,391,753 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 0.5% 0.4%
Cash with Interest Fund 0.4% 0.4%
The Investment Company of America Fund - 1.0%
The Washington Mutual Investors Fund - 0.6%
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
9
40
<PAGE>
The Plan's net investment gain from the Pooled Fund is $35,186 for the
year ended December 31, 1998 and a net investment gain of $228,535 for
the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
5. Investment Income
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $( 3,019) $ 193
Armada Government Portfolio
Fund $ 45
Investment Co. of America
Com ( 54,413) 24,568
Washington Mutual Investors
Fund ( 55,831) 21,521
-------- --------- -------
Totals $(113,263) $ 46,282 $ 45
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ (367) $ 286
Armada Government Portfolio
Fund $ 64
------- --------- -------
Totals $ (367) $ 286 $ 64
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
(continued)
10
41
<PAGE>
6. Year 2000 Issue (unaudited) (continued)
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Investment Co.
of America Com $294,529 $ -
American Funds - Washington Mutual
Investors Fund 270,179 -
11
42
<PAGE>
Schedules
12
43
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Employer Identification #34-4297750; Plan #015
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----
<S> <C> <C> <C>
Mutual funds:
*Armada Government Portfolio Fund 590 $ 590 $ 590
American Funds - Investment Co.
of America Com 9,480 285,234 294,529
American Funds - Washington Mutual
Investors Fund 8,210 274,911 270,179
------- -------
$560,735 $565,298
======= =======
<FN>
*Party-in-interest
</TABLE>
13
44
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Auburn)
Employer Identification #34-4297750; Plan #015
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $26,991 $26,766 $26,766 $ -
Cooper Tire & Rubber
Company common stock 26,689 - - -
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
45
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
46
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan
(Findlay) as of December 31, 1998 and 1997, and the related statements
of changes in assets available for plan benefits for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Findlay) at
December 31, 1998 and 1997, and the changes in its assets available for
plan benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
47
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
----------- -----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $ 7,655,477 $10,700,422
Cooper Tire & Rubber Company Common Stock - 164,873
Mutual funds 5,885,300 1,633
---------- ----------
13,540,777 10,866,928
Cash 15,207 314,183
Employer contribution receivable 661,748 145,345
Employee contribution receivable 37,602 -
---------- ----------
Assets available for plan benefits $14,255,334 $11,326,456
========== ==========
<FN>
See accompanying notes.
</TABLE>
2
48
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year ended December 31
1998 1997
----------- ----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 2,754,961 $ 2,407,236
Employer 661,604 297,746
--------- ----------
3,416,565 2,704,982
Investment income (loss):
Net gain (loss) from Pooled Fund (Note 4) (1,280,015) 1,859,458
Net depreciation in fair value of Cooper
Tire & Rubber Company Common Stock - (2,389)
Net appreciation in fair value of common
stock and mutual funds 817,373 -
Dividends 480,752 1,416
Interest 269 317
---------- ----------
18,379 1,858,802
---------- ----------
Total additions 3,434,944 4,563,784
Participants' withdrawals (506,066) (476,935)
---------- ----------
Increase in assets available for plan
benefits during the year 2,928,878 4,086,849
Assets available for plan benefits at
beginning of year 11,326,456 7,239,607
---------- ----------
Assets available for plan benefits at
end of year $14,255,334 $11,326,456
========== ==========
<FN>
See accompanying notes.
</TABLE>
3
49
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Findlay) (Plan),
as amended and restated, is a defined contribution plan administered by
a Plan Committee appointed by the plan sponsor, Cooper Tire & Rubber
Company (the Company). Participation in the Plan is voluntary and any
employee of the Company eligible for membership in Local Union #207,
United Steelworkers of America AFL-CIO/CLC (Union) is eligible to
participate in the Plan if he or she has completed thirty days of
continuous credited service. At December 31, 1998, 707 participants had
designated investment of contributions in one or more investment options
of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 50% (25% in 1997) of PSP contributions which represent up to four
percent of each participant's compensation, less any forfeitures,
or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
(continued)
4
50
<PAGE>
1. Summary of Plan (continued)
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until October 31, 2000. Thereafter it shall
renew itself for yearly periods unless written notice is given by the
Company or the Union that it is desired to terminate or amend the Plan.
The Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
value thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
5
51
<PAGE>
2. Significant Accounting Policies (continued)
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
(continued)
6
52
<PAGE>
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
(continued)
7
<PAGE> 53
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $7,655,477 at
December 31, 1998 and $10,700,422 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 3.9% 3.2%
Cash with Interest Fund 2.2% 1.8%
The Investment Company of America Fund - 10.0%
The Washington Mutual Investors Fund - 6.1%
8
54
<PAGE>
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
The Plan's net investment loss from the Pooled Fund is $1,280,015 for
the year ended December 31, 1998 and a net investment gain of $1,859,458
for the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
9
55
<PAGE>
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $ 36,031 $ 1,038
Armada Government Portfolio
Fund $ 269
Investment Co. of America
Com 360,185 241,313
Washington Mutual Investors
Fund 421,157 238,401
-------- --------- -------
Totals $ 817,373 $ 480,752 $ 269
======== ========= =======
</TABLE>
<TABLE>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ (2,389) $ 1,416
Armada Government Portfolio
Fund $ 317
------- --------- -------
Totals $ (2,389) $ 1,416 $ 317
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
10
56
<PAGE>
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Investment Co.
of America Com $2,892,567 $ -
American Funds - Washington Mutual
Investors Fund 2,987,699 -
11
57
<PAGE>
Schedules
12
58
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Employer Identification #34-4297750; Plan #014
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----
<S> <C> <C> <C>
Mutual funds:
*Armada Government Money Market 1,189 $ 1,189 $ 1,189
*Armada Government Portfolio Fund 3,845 3,845 3,845
American Funds - Investment Co.
of America Com 93,098 2,804,673 2,892,567
American Funds - Washington Mutual
Investors Fund 90,784 3,043,347 2,987,699
--------- ---------
$5,853,054 $5,885,300
========= =========
<FN>
*Party-in-interest
</TABLE>
13
59
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Findlay)
Employer Identification #34-4297750; Plan #014
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $147,805 $146,398 $146,398 $ -
Cooper Tire & Rubber
Company common stock 146,300 - - -
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
60
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
61
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (El
Dorado) as of December 31, 1998 and 1997, and the related statements of
changes in assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (El Dorado) at
December 31, 1998 and 1997, and the changes in its assets available for
plan benefits for the years then ended, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
62
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
---------- ----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $ 509,892 $ 535,669
Cooper Tire & Rubber Company Common Stock - 13,504
Mutual funds 108,135 195
--------- ---------
618,027 549,368
Cash 1,911 7,769
Employer contribution receivable 23,424 8,196
Employee contribution receivable 2,822 -
--------- ---------
Assets available for plan benefits $ 646,184 $ 565,333
========= =========
<FN>
See accompanying notes.
</TABLE>
2
63
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year Ended December 31
1998 1997
---------- ----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 183,459 $ 148,260
Employer 23,574 20,715
--------- ---------
207,033 168,975
Investment income (loss):
Net gain (loss) from Pooled Fund (Note 4) (48,189) 83,578
Net depreciation in fair value of Cooper
Tire & Rubber Company Common Stock - (246)
Net appreciation in fair value of
common stock and mutual funds 17,463 -
Dividends 8,817 129
Interest 24 28
--------- ---------
(21,885) 83,489
--------- ---------
Total additions 185,148 252,464
Participants' withdrawals (104,297) (110,516)
--------- ---------
Increase in assets available for plan
benefits during the year 80,851 141,948
Assets available for plan benefits at
beginning of year 565,333 423,385
--------- ---------
Assets available for plan benefits at
end of year $ 646,184 $ 565,333
========= =========
<FN>
See accompanying notes.
</TABLE>
3
64
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (El Dorado)
(Plan), as amended and restated, is a defined contribution plan
administered by a Plan Committee appointed by the plan sponsor, Cooper
Tire & Rubber Company (the Company). Participation in the Plan is
voluntary and any employee of the Company eligible for membership in
Local Union #634, United Steelworkers of America AFL-CIO/CLC (Union) is
eligible to participate in the Plan if he or she has completed thirty
days of continuous credited service. At December 31, 1998, 144
participants had designated investment of contributions in one or more
investment options of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 25% of PSP contributions which represent up to four percent of
each participant's compensation, less any forfeitures, or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
(continued)
4
65
<PAGE>
1. Summary of Plan (continued)
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until April 27, 2000. Thereafter it shall renew
itself for yearly periods unless written notice is given by the Company
or the Union that it is desired to terminate or amend the Plan. The
Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
value thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
5
66
<PAGE>
2. Significant Accounting Policies (continued)
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
(continued)
6
67
<PAGE>
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
(continued)
7
<PAGE> 68
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $509,892 at
December 31, 1998 and $535,669 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 0.2% 0.2%
Cash with Interest Fund 0.3% 0.3%
The Investment Company of America Fund - 0.1%
The Washington Mutual Investors Fund - 0.1%
8
69
<PAGE>
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
The Plan's net investment loss from the Pooled Fund is $48,189 for the
year ended December 31, 1998 and a net investment gain of $83,578 for
the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
9
70
<PAGE>
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $ 1,045 $ 86
Armada Government Portfolio
Fund $ 24
Investment Co. of America
Com 4,766 3,629
Washington Mutual Investors
Fund 11,652 5,102
-------- --------- -------
Totals $ 17,463 $ 8,817 $ 24
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ (246) $ 129
Armada Government Portfolio
Fund $ 28
------- --------- -------
Totals $ (246) $ 129 $ 28
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
10
71
<PAGE>
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Investment Co.
of America Com $43,791 $ -
American Funds - Washington Mutual
Investors Fund 63,894 -
11
72
<PAGE>
Schedules
12
73
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Employer Identification #34-4297750; Plan #013
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----
<S> <C> <C> <C>
Mutual funds:
*Armada Government Portfolio Fund 450 $ 450 $ 450
American Funds - Investment Co.
of America Com 1,410 42,368 43,791
American Funds - Washington Mutual
Investors Fund 1,942 64,861 63,894
------- -------
$107,679 $108,135
======= =======
<FN>
*Party-in-interest
</TABLE>
13
74
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (El Dorado)
Employer Identification #34-4297750; Plan #013
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 8,835 $ 8,753 $ 8,753 $ -
Cooper Tire & Rubber
Company common stock 8,674 - - -
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
75
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
76
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan
(Bowling Green - Hose) as of December 31, 1998 and 1997, and the related
statements of changes in assets available for plan benefits for the
years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green
- - Hose) at December 31, 1998 and 1997, and the changes in its assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
77
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
---------- ----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $ 650,138 $ 880,991
Cooper Tire & Rubber Company Common Stock - 27,056
Mutual funds 504,756 1,168
--------- ---------
1,154,894 909,215
Cash (1,362) 25,321
Employer contribution receivable 110,269 20,363
Employee contribution receivable 6,200 -
--------- ---------
Assets available for plan benefits $1,270,001 $ 954,899
========= =========
<FN>
See accompanying notes.
</TABLE>
2
78
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year Ended December 31
1998 1997
---------- ----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 367,854 $ 281,293
Employer 110,269 45,400
--------- ---------
478,123 326,693
Investment income (loss):
Net gain (loss) from Pooled Fund (Note 4) (104,648) 146,971
Net depreciation in fair value of Cooper
stock and mutual funds - (446)
Net appreciation in fair value of common
and convertible preferred stock 58,014 -
Dividends 41,552 259
Interest 64 56
--------- ---------
(5,018) 146,840
--------- ---------
Total additions 473,105 473,533
Participants' withdrawals (158,003) (40,133)
--------- ---------
Increase in assets available for plan
benefits during the year 315,102 433,400
Assets available for plan benefits at
beginning of year 954,899 521,499
--------- ---------
Assets available for plan benefits at
end of year $1,270,001 $ 954,899
========= =========
<FN>
See accompanying notes.
</TABLE>
3
79
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green -
Hose) (Plan), as amended and restated, is a defined contribution plan
administered by a Plan Committee appointed by the plan sponsor, Cooper
Tire & Rubber Company (the Company). Participation in the Plan is
voluntary and any employee of the Company eligible for membership in
Local Union #1152, United Steelworkers of America AFL-CIO/CLC (Union) is
eligible to participate in the Plan if he or she has completed thirty
days of continuous credited service. At December 31, 1998, 249
participants had designated investment of contributions in one or more
investment options of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 50% (25% in 1997) of PSP contributions which represent up to four
percent of each participant's compensation, less any forfeitures,
or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
(continued)
4
80
<PAGE>
1. Summary of Plan (continued)
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until April 30, 2001. Thereafter it shall renew
itself for yearly periods unless written notice is given by the Company
or the Union that it is desired to terminate or amend the Plan. The
Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
value thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
5
81
<PAGE>
2. Significant Accounting Policies (continued)
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
(continued)
6
82
<PAGE>
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
(continued)
7
<PAGE> 83
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $650,138 at
December 31, 1998 and $880,991 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 0.3% 0.3%
Cash with Interest Fund 0.2% 0.2%
The Investment Company of America Fund - 0.8%
The Washington Mutual Investors Fund - 0.5%
8
84
<PAGE>
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
The Plan's net investment loss from the Pooled Fund is $104,648 for the
year ended December 31, 1998 and a net investment gain of $146,971 for
the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
9
85
<PAGE>
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $ 2,084 $ 170
Armada Government Portfolio
Fund $ 64
Investment Co. of America
Com 21,339 19,661
Washington Mutual Investors
Fund 34,591 21,721
-------- --------- -------
Totals $ 58,014 $ 41,552 $ 64
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ (446) $ 259
Armada Government Portfolio
Fund $ 56
------- --------- -------
Totals $ (446) $ 259 $ 56
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
10
86
<PAGE>
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Investment Co.
of America Com $232,274 $ -
American Funds - Washington Mutual
Investors Fund 269,195 -
11
87
<PAGE>
Schedules
12
88
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Employer Identification #34-4297750; Plan #017
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----
<S> <C> <C> <C>
Mutual funds:
*Armada Government Portfolio Fund 3,287 $ 3,287 $ 3,287
American Funds - Investment Co.
of America Com 7,476 224,969 232,274
American Funds - Washington Mutual
Investors Fund 8,180 273,847 269,195
------- -------
$502,103 $504,756
======= =======
<FN>
*Party-in-interest
</TABLE>
13
89
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Hose)
Employer Identification #34-4297750; Plan #017
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $21,426 $21,234 $21,234 $ -
Cooper Tire & Rubber
Company common stock 21,142 - - -
American Funds -
Investment Co. of
America Com 49,735 12,247 12,290 (43)
American Funds -
Washington Mutual
Investors Fund 65,624 28,592 29,161 (569)
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
14
90
<PAGE>
EXHIBIT (99)
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Financial Statements and Schedules
Years ended December 31, 1998 and 1997
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Assets Available for Plan Benefits 2
Statements of Changes in Assets Available for Plan Benefits 3
Notes to Financial Statements 4
Schedules
Line 27a - Schedule of Assets Held for Investment Purposes 14
Line 27d - Schedule of Reportable Transactions 15
A schedule of party-in-interest transactions has not
been presented because there were no party-in-
interest transactions which are prohibited by
ERISA Section 406 and for which there is no
statutory or administrative exemption.
91
<PAGE>
Report of Independent Auditors
Pre-Tax Savings Plan Committee
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
We have audited the accompanying statements of assets available for plan
benefits of the Cooper Tire & Rubber Company Pre-Tax Savings Plan
(Bowling Green - Sealing) as of December 31, 1998 and 1997, and the
related statements of changes in assets available for plan benefits for
the years then ended. These financial statements are the responsibility
of the Plan's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for plan benefits
of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green
- - Sealing) at December 31, 1998 and 1997, and the changes in its assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying schedules
of assets held for investment purposes as of December 31, 1998 and
reportable transactions for the year then ended, are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management.
The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 1998 basic financial statements
and, in our opinion, are fairly stated in all material respects in
relation to the 1998 basic financial statements taken as a whole.
May 14, 1999
1
92
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Statements of Assets Available for Plan Benefits
<CAPTION>
December 31
1998 1997
---------- ----------
<S> <C> <C>
Assets
Investments:
Value of interest in Pooled Fund (Note 4) $ 674,922 $ 800,061
Cooper Tire & Rubber Company Common Stock - 28,836
Mutual funds 655,191 220
--------- ---------
1,330,113 829,117
Cash (overdraft) (4,524) 26,702
Employer contribution receivable 151,072 30,119
Employee contribution receivable 9,187 -
--------- ---------
Assets available for plan benefits $1,485,848 $ 885,938
========= =========
<FN>
See accompanying notes.
</TABLE>
2
93
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Statements of Changes in Assets Available for Plan Benefits
<CAPTION>
Year Ended December 31
1998 1997
---------- ----------
<S> <C> <C>
Additions:
Cash contributions:
Participants $ 560,028 $ 401,926
Employer 151,072 56,789
--------- ---------
711,100 458,715
Investment income (loss):
Net gain (loss) from Pooled Fund (Note 4) (86,308) 114,027
Net appreciation in fair value of Cooper
Tire & Rubber Company common stock - 736
Net appreciation in fair value of common
stock and mutual funds 47,164 -
Dividends 52,505 171
Interest 64 41
--------- ---------
13,425 114,975
--------- ---------
Total additions 724,525 573,690
Participants' withdrawals (124,615) (52,307)
--------- ---------
Increase in assets available for plan
benefits during the year 599,910 521,383
Assets available for plan benefits at
beginning of year 885,938 364,555
--------- ---------
Assets available for plan benefits at
end of year $1,485,848 $ 885,938
========= =========
<FN>
See accompanying notes.
</TABLE>
3
94
<PAGE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Notes to Financial Statements
December 31, 1998 and 1997
1. Summary of Plan
The Cooper Tire & Rubber Company Pre-Tax Savings Plan (Bowling Green -
Sealing) (Plan), as amended and restated, is a defined contribution plan
administered by a Plan Committee appointed by the plan sponsor, Cooper
Tire & Rubber Company (the Company). Participation in the Plan is
voluntary and any employee of the Company eligible for membership in
Local Union #1042, United Steelworkers of America AFL-CIO/CLC (Union) is
eligible to participate in the Plan if he or she has completed thirty
days of continuous credited service. At December 31, 1998, 285
participants had designated investment of contributions in one or more
investment options of the Plan, which are as follows:
1) Cooper Tire & Rubber Company common stock.
2) Mutual funds managed by the American Funds Group, a subsidiary
of Capital Group Incorporated:
a) The Investment Company of America Fund - managed to provide
long-term growth of capital and income, placing greater
emphasis on future dividends than on current income.
b) The Washington Mutual Investors Fund - managed to provide
current income and opportunity for capital growth through the
selection of common stocks.
3) Cash with interest - contributions are placed in investment
contracts with a diversified group of insurance companies, banks,
and other financial institutions. This option may also include
synthetic investment contracts backed by high quality fixed income
assets. All contracts have specific individual terms including
interest rate and maturity date. Interest rates on contracts
generally reset on a monthly or quarterly basis.
The Plan provides that Pre-Tax Savings Plan (PSP) contributions may be
made in one percent multiples of a participant's compensation up to
fifteen percent, subject to Internal Revenue Code (IRC) limits on annual
contributions to the Plan. The amount of contribution may be changed
every thirty days.
The Plan provides that the Company will contribute to the Plan each year
from current or accumulated earnings an amount equal to the lesser of:
(a) 50% (25% in 1997) of PSP contributions which represent up to four
percent of each participant's compensation, less any forfeitures,
or
(b) an amount equal to fifteen percent of the Company's current year
pre-tax earnings, exclusive of any deductions for contributions
to the Plan, in excess of ten percent of the stockholders' equity
of the Company at the beginning of the year.
The Company's Board of Directors, at its discretion, may waive the
limitation in (b) and contribute from current or accumulated earnings an
amount not to exceed the limitation in (a). Administrative expenses of
the Plan are paid by the Company.
Investment options for future contributions may be changed daily.
Reallocation of balances may be made among the investment options daily.
Directions given by participants to the Plan trustee concerning the
voting of common stock are confidential.
(continued)
4
95
<PAGE>
1. Summary of Plan (continued)
No amounts may be withdrawn by a participant from PSP contributions
prior to termination of employment unless the participant has either
attained age 59 1/2, becomes totally and permanently disabled, or is
able to demonstrate financial hardship. Hardship withdrawals by
participants not yet attaining 59 1/2 years of age are limited to PSP
contributions and are subject to the Internal Revenue Code (IRC) and
regulations thereunder. Participants are fully vested in their
contributions and earnings thereon.
The Plan shall continue until October 31, 2000. Thereafter it shall
renew itself for yearly periods unless written notice is given by the
Company or the Union that it is desired to terminate or amend the Plan.
The Company has reserved the right to amend the Plan at any time if such
amendment is necessary to enable the Plan to meet the requirements of
the IRC or the requirements of any governmental authority. If the Plan
terminates, and a successor plan is not adopted, all assets will be
distributed to participants in a lump sum.
No material amounts of withdrawals by participants, initiated on or
before December 31, 1998 or 1997, were pending.
2. Significant Accounting Policies
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of (1) additions and deductions
during the reporting period, and (2) assets and liabilities, as well as
disclosure of contingent assets and liabilities, at the date of the
financial statements. Actual results could differ from those estimates.
Investments
The Plan's investments are held by National City Bank as trustee under
an agreement which directs the trustee to invest participants'
contributions based on their investment elections. PSP contributions
and income not yet invested in the options selected by the participant
due to the "transaction period" as defined by the Plan, are invested in
cash with interest investments.
Investments in common stock of the Company are stated at quoted market
values as determined on the last business day of the Plan year. Mutual
fund investments are stated at fair value as determined by the net asset
values thereof on the last business day of the Plan year.
Certain investments of the Plan are combined with similar assets of the
other defined contribution plans sponsored by the Company. The combined
investments (Pooled Fund) are held by National City Bank as trustee and
are valued at their fair value as determined by the trustee, except for
fully benefit responsive investment contracts which are valued at
contract value. At December 31, 1998 and 1997, the contract value of
these contracts approximates fair value.
Contributions
Contributions are recorded when the Company makes payroll deductions for
Plan participants, and are invested in any of four investment options at
the participant's election.
Contributions from the Company are accrued in the period in which they
become obligations of the Company and may be in the form of cash,
treasury stock or authorized but unissued common stock of the Company.
Company contributions are invested in common stock of the Company until
the contributions become vested after which they are invested as
directed by the participant. The Company contribution to a participant's
account becomes vested after five years of continuous credited service;
thereafter, Company contributions become vested when made.
5
96
<PAGE>
2. Significant Accounting Policies (continued)
Forfeitures
Forfeitures occur when an employee elects a withdrawal from current year
or unvested contributions or is terminated, voluntarily or
involuntarily, before being fully vested. Forfeitures are used to
reduce the Company obligation.
3. Income Tax Status
The Internal Revenue Service ruled September 9, 1996 that the Plan
qualifies under Section 401(a) of the IRC and, therefore, the related
trust is not subject to tax under present income tax law. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Committee believes the Plan is
being operated in compliance with the applicable requirements of the IRC
and, therefore, believes that the Plan is qualified and the related
trust is tax exempt.
4. Value of Interest in Pooled Fund
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1998
-----------------------------
Cooper Tire
& Rubber
Company Cash with
Common Interest
Stock Fund Fund
------------ ------------
<S> <C> <C>
Armada Government Portfolio Fund $ 1,681,519 $ 3,928,115
Cooper Tire & Rubber Company
Common Stock 154,085,556
*Allstate Life Insurance Company -
6.01% contract 77020; matures
August 16, 2004 12,866,709
*Monumental Life Insurance Company -
6.08% contract BDA-00217TR; matures
August 25,2004 11,842,635
*State Street Bank & Trust - 5.35%
contract 98145; matures
September 15, 2003 6,974,051
**Casisse Des Depots - 6.15% contract
223-01; matures September 25, 2000 2,390,045
John Hancock Mutual Life Insurance
Company - 5.62% contract 8736;
matures May 1, 2007 7,651,704
New York Life Insurance Company -
7.65% contract 30200-001; matures
September 20, 2000 5,359,713
*Continental Assurance Company -
6.31% contract 63-05835; matures
February 17, 2003 4,005,674
Allstate Life Insurance Company -
5.95% contract 31040; matures
July 1, 2001 3,497,499
Allmerica Financial Life - 6.30%
contract 99212W; matures
November 15, 2004 3,474,907
**Casisse Des Depots - 5.86% contract
223-03; matures December 16, 2002 2,995,078
United of Omaha Life Insurance -
5.75% contract SDGA-11195; matures
August 2, 2000 1,995,756
(continued)
6
97
<PAGE>
Monumental Life Insurance Company -
3.66% contract ADA00561FR; matures
April 15, 1999 1,315,889
New York Life Insurance Company -
7.65% contract 30200-002; matures
April 19, 1999 1,169,061
Monumental Life Insurance Company -
5.80% contract BDA-00217TR-10;
matures December 31, 1999 59,733
------------ ------------
$155,767,075 $ 69,526,569
============ ============
<FN>
* Synthetic contract
** Non-participating synthetic contract
</TABLE>
<TABLE>
The assets of the Cooper Tire & Rubber Company Pooled Fund are as
follows:
<CAPTION>
December 31, 1997
-------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 1,214,344 $(1,863,178)$(1,153,143)$ 1,315,449
Cooper Tire & Rubber
Company Common Stock 185,112,135
Mutual funds:
The Investment Company
of America Fund 18,542,498
The Washington Mutual
Investors Fund 28,034,543
Cash with Interest Fund:
*Allstate Life Insurance
Company - 6.23% contract;
matures August 16, 2004 8,589,106
New York Life Insurance
Company - 7.65% contract;
matures September 20, 2000 7,513,568
*John Hancock Mutual Life
Insurance Company - 6.42%
contract; matures May 1,
2007 7,197,589
Provident Life and Accident
Insurance Company 5.75% -
contract; matures
January 30, 1998 6,593,931
*Continental Assurance Company -
6.06% contract; matures
January 1, 1998 3,862,569
*Allstate Life Insurance
Company - 5.95% contract;
matures February 18, 2002 3,303,020
*Allmerica Financial Life
Insurance Company - 6.81%
contract; matures
November 15, 2004 3,259,691
*Peoples Security Life -
6.89% contract; matures
June 25, 2004 3,026,927
*Caisse Des Depots (CDC) BRIC -
6.15% contract; matures
September 25, 2000 2,987,570
(continued)
7
<PAGE> 98
*Peoples Security Life -
6.08% contract; matures
April 15, 1999 1,997,156
United of Omaha Life
Insurance - 6.41% contract;
matures August 2, 2000 1,995,770
*Peoples Security Life -
6.60% contract; matures
August 25, 2004 1,979,747
*Peoples Security Life -
6.78% contract; matures
March 15, 2002 1,952,166
*Peoples Security Life -
5.29% contract; matures
December 17, 2001 1,721,801
*Caisse Des Depots (CDC) BRIC -
5.80% contract; matures
December 16, 2002 1,550,256
*Peoples Security Life -
6.17% contract; matures
July 16, 2001 1,487,592
*Caisse Des Depots (CDC) BRIC -
5.86% contract; matures
May 31, 2000 1,445,881
*Peoples Security Life -
6.94% contract; matures
January 26, 2004 1,299,224
Commonwealth Life Insurance
Company - 3.66% contract;
matures April 15, 1999 1,269,427
New York Life Insurance
Company - 7.65% contract;
matures April 19, 1999 1,085,983
*Peoples Security Life -
5.40% contract; matures
January 18, 2000 859,422
*Peoples Security Life -
5.80% contract; matures
December 31, 1999 654,404
*Peoples Security Life -
5.24% contract; matures
April 15, 1998 589,726
------------ ----------- ----------- -----------
Total assets $186,326,479 $64,359,348 $17,389,355 $29,349,992
============ =========== =========== ===========
<FN>
*Synthetic contract
</TABLE>
The average yield of the Cash with Interest Fund for the years ended
December 31, 1998 and 1997 was 6.1% and 6.7% respectively.
The value of the Plan's interest in the Pooled Fund is $674,922 at
December 31, 1998 and $800,061 at December 31, 1997.
The Plan's interest in the Pooled Fund's assets at December 31 is as
follows:
1998 1997
---- ----
Cooper Tire & Rubber Company Common Stock Fund 0.4% 0.2%
Cash with Interest Fund 0.2% 0.1%
The Investment Company of America Fund - 0.9%
The Washington Mutual Investors Fund - 0.5%
8
99
<PAGE>
<TABLE>
The net investment gain (loss) of the Cooper Tire & Rubber Company
Pooled Fund is as follows:
<CAPTION>
Year Ended December 31, 1998
--------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 142,892 $ 4,150,939 $ 7,700 $ 15,063
Dividends 2,724,804 417,248 378,191
Net realized and
unrealized
gain (loss) (23,151,293) 1,137,385 3,677,886
----------- ----------- ----------- -----------
Net investment
gain (loss) $(20,283,597) $ 4,150,939 $ 1,562,333 $ 4,071,140
=========== =========== =========== ===========
</TABLE>
<TABLE>
Year Ended December 31, 1997
---------------------------------------------------
Cooper Tire The The
& Rubber Cash Investment Washington
Company with Company of Mutual
Common Interest America Investors
Stock Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest $ 113,940 $ 3,882,280 $ 30,033 $ 33,468
Dividends 2,704,175 1,804,968 2,222,234
Net realized and
unrealized gain 38,049,952 1,573,724 3,744,388
----------- ----------- ----------- -----------
Net investment gain $40,868,067 $ 3,882,280 $ 3,408,725 $ 6,000,090
=========== =========== =========== ===========
</TABLE>
The Plan's net investment loss from the Pooled Fund is $86,308 for the
year ended December 31, 1998 and a net investment gain of $114,027 for
the year ended December 31, 1997.
The net investment gain or loss of the Pooled Fund is allocated to each
participating plan based on the percentage of that Plan's units in each
Pooled Fund category.
9
100
<PAGE>
5. Investment Income
<TABLE>
On July 24, 1998, the Plan's investments in the Investment Co. of
America Com and Washington Mutual Investors Fund were removed from the
pooled fund. Investment income on assets held outside the pooled fund
is as follows:
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1998:
Cooper Tire & Rubber
Company Common $ 3,665 $ 183
Armada Government Portfolio
Fund $ 64
Investment Co. of America
Com 17,126 26,216
Washington Mutual Investors
Fund 26,373 26,106
-------- --------- -------
Totals $ 47,164 $ 52,505 $ 64
======== ========= =======
</TABLE>
<TABLE>
<CAPTION>
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments Dividends Interest
----------------------- --------- --------
<S> <C> <C> <C>
Year ended December 31, 1997:
Cooper Tire & Rubber
Company Common $ 736 $ 171
Armada Government Portfolio
Fund $ 41
------- --------- -------
Totals $ 736 $ 171 $ 41
======= ========= =======
</TABLE>
6. Year 2000 Issue (unaudited)
The Plan Sponsor has determined it will be necessary to take certain
steps in order to ensure the Plan's information systems are prepared to
handle year 2000 issues. The Plan Sponsor is taking a two-phase
approach. The first phase addressed internal systems that needed to be
modified or replaced to function properly. Internal resources were
utilized to modify existing software applications and test the software
and equipment for the year 2000 modifications. Costs associated with
modifying software and equipment were paid by the Plan Sponsor and were
not material.
For the second phase of the project, Plan management established formal
communications with its third party service providers to determine that
they have developed plans to address their own year 2000 problems as
they relate to the Plan's operations. All third party service providers
have indicated they will be year 2000 compliant by mid-year 1999. If
modification of data processing systems by the service providers is not
completed timely, the Plan Sponsor believes the year 2000 problem could
have a material impact on the operations of the Plan. Plan management
has not developed a contingency plan, because they are confident that
all systems will be year 2000 ready.
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101
<PAGE>
7. Investments
Individual investments that exceed 5% of plan assets available for
benefits are as follows:
December 31
1998 1997
--------------------
American Funds - Investment Co.
of America Com $318,952 $ -
American Funds - Washington Mutual
Investors Fund 332,550 -
11
102
<PAGE>
Schedules
12
103
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Employer Identification #34-4297750; Plan #016
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<CAPTION>
Shares Cost (Plus
Units, or Accrued Fair
Description Face Amount Interest) Value
----------- ----------- ----------- -----
<S> <C> <C> <C>
Mutual funds:
*Armada Government Portfolio Fund 3,689 $ 3,689 $ 3,689
American Funds - Investment Co.
of America Com 10,266 308,880 318,952
American Funds - Washington Mutual
Investors Fund 10,105 337,145 332,550
------- -------
$649,714 $655,191
======= =======
<FN>
*Party-in-interest
</TABLE>
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104
<PAGE>
<TABLE>
Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Bowling Green - Sealing)
Employer Identification #34-4297750; Plan #016
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<CAPTION>
Sales
--------------------------------
Cost (Plus
Cost of Accrued Gain/
Description of Assets Purchases Proceeds Interest) (Loss)
- --------------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C>
Armada Government
Portfolio Fund $ 30,970 $30,756 $30,756 $ -
Cooper Tire & Rubber
Company common stock 30,672 - - -
American Funds -
Investment Co. of
America Com 89,260 21,868 22,291 (423)
American Funds -
Washington Mutual
Investors Fund 102,409 29,401 30,767 (1,366)
<FN>
Note: The purchase and selling price for each reportable transaction
represents its fair value at the time of acquisition or disposition.
</TABLE>
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<PAGE>
