

	Year Ended December 31,
(In millions, except per share amounts)	2011			2010			2009
Net Sales	$	9,027		$	7,648		$	6,702
Cost of Goods Sold	8,209			6,932			6,216
Selling, Administrative and General Expense	898			928			904
Rationalizations	70			163			106
Interest Expense	247			271			253
Other Income	(218		)	(88		)	(252		)
Loss before Income Taxes and Equity in Earnings of Subsidiaries	(179		)	(558		)	(525		)
United States and Foreign Taxes	37			—			(99		)
Equity in Earnings of Subsidiaries	559			342			51
Net Income (Loss)	343			(216		)	(375		)
Less: Preferred Stock Dividends	22			—			—
Net Income (Loss) available to Common Shareholders	$	321		$	(216	)	$	(375	)
Net Income (Loss) available to Common Shareholders — Per Share of Common Stock
Basic	$	1.32		$	(0.89	)	$	(1.55	)
Weighted Average Shares Outstanding	244			242			241
Diluted	$	1.26		$	(0.89	)	$	(1.55	)
Weighted Average Shares Outstanding	271			242			241

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

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY BALANCE SHEETS



	December 31,
(Dollars in millions, except share data)	2011			2010
Assets
Current Assets:
Cash and Cash Equivalents	$	916		$	792
Accounts Receivable, less allowance — $22 ($26 in 2010)	984			875
Inventories:
Raw Materials	401			314
Work in Process	63			60
Finished Goods	1,115			885
	1,579			1,259
Prepaid Expenses and Other Current Assets	53			58
Total Current Assets	3,532			2,984
Intangible Assets	110			109
Other Assets	226			241
Investments in Subsidiaries	4,067			3,879
Property, Plant and Equipment, less accumulated depreciation — $4,016 ($4,353 in 2010)	2,129			2,177
Total Assets	$	10,064		$	9,390
Liabilities
Current Liabilities:
Accounts Payable-Trade	$	925		$	814
Accounts Payable to Affiliates	716			631
Compensation and Benefits	445			411
Other Current Liabilities	344			369
Long Term Debt and Capital Leases Due Within One Year	11			1
Total Current Liabilities	2,441			2,226
Long Term Debt and Capital Leases	3,271			3,573
Compensation and Benefits	2,793			2,296
Deferred and Other Noncurrent Income Taxes	32			31
Other Long Term Liabilities	778			620
Total Liabilities	9,315			8,746
Commitments and Contingent Liabilities
Shareholders’ Equity
Preferred Stock, no par value:
Authorized, 50 million shares, Outstanding shares — 10 million (0 in 2010), liquidation preference $50 per share	500			—
Common Stock, no par value:
Authorized, 450 million shares, Outstanding shares — 245 million (243 million in 2010)	245			243
Capital Surplus	2,808			2,805
Retained Earnings	1,187			866
Accumulated Other Comprehensive Loss	(3,991		)	(3,270		)
Total Shareholders’ Equity	749			644
Total Liabilities and Shareholders’ Equity	$	10,064		$	9,390

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

THE GOODYEAR TIRE & RUBBER COMPANY PARENT COMPANY STATEMENTS OF SHAREHOLDERS’ EQUITY

									Accumulated
	Common Stock								Other			Total
				Capital		Retained			Comprehensive			Shareholders'
(Dollars in millions)	Shares	Amount		Surplus		Earnings			Loss			Equity
Balance at December 31, 2008
(after deducting 9,599,694 treasury shares)	241,289,921	$	241	$	2,764	$	1,463		$	(3,446	)	$	1,022
Comprehensive income (loss):
Net loss						(375		)				(375		)
Foreign currency translation (net of tax of $22)									217
Reclassification adjustment for amounts recognized in income (net of tax of $0)									(17		)
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost (net of tax of $57)									121
Increase in net actuarial losses (net of tax benefit of $19)									(277		)
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments and settlements (net of tax of $1)									43
Prior service cost from plan amendments (net of tax of $7)									(16		)
Other (net of tax benefit of $2)									3
Other comprehensive income (loss)												74
Total comprehensive income (loss)												(301		)
Stock-based compensation plans				18								18
Common stock issued from treasury	912,498	1		1								2
Other				—		(6		)				(6		)
Balance at December 31, 2009
(after deducting 8,687,196 treasury shares)	242,202,419	$	242	$	2,783	$	1,082		$	(3,372	)	$	735

Balance at December 31, 2009
(after deducting 8,687,196 treasury shares)	242,202,419	$	242	$	2,783	$	1,082		$	(3,372	)	$	735
Comprehensive income (loss):
Net loss						(216		)				(216		)
Foreign currency translation (net of tax of $1)									55
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost (net of tax of $6)									162
Increase in net actuarial losses (net of tax benefit of $21)									(178		)
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments and settlements (net of tax of $4)									60
Prior service cost from plan amendments (net of tax of $0)									(1		)
Other (net of tax of $0)									4
Other comprehensive income (loss)												102
Total comprehensive income (loss)												(114		)
Stock-based compensation plans				16								16
Common stock issued from treasury	736,530	1		6								7
Balance at December 31, 2010
(after deducting 7,950,743 treasury shares)	242,938,949	$	243	$	2,805	$	866		$	(3,270	)	$	644

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

THE GOODYEAR TIRE & RUBBER COMPANY PARENT COMPANY STATEMENTS OF SHAREHOLDERS’ EQUITY - (Continued)

													Accumulated
	Preferred Stock			Common Stock									Other			Total
							Capital			Retained			Comprehensive			Shareholders'
(Dollars in millions)	Shares	Amount		Shares	Amount		Surplus			Earnings			Loss			Equity
Balance at December 31, 2010
(after deducting 7,950,743 treasury shares)	—	—		242,938,949	$	243	$	2,805		$	866		$	(3,270	)	$	644
Comprehensive income (loss):
Net income										343						343
Foreign currency translation (net of tax of $0)													(140		)
Amortization of prior service cost and unrecognized gains and losses included in total benefit cost (net of tax of $8)													157
Increase in net actuarial losses (net of tax benefit of $28)													(770		)
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments, settlements and divestitures (net of tax of $1)													18
Deferred derivative gain (net of tax of $1)													3
Reclassification adjustment for amounts recognized in income (net of tax of $2)													6
Unrealized investment gains (net of tax of $0)													5
Other comprehensive income (loss)																(721		)
Total comprehensive income (loss)																(378		)
Stock-based compensation plans							13									13
Preferred stock issued	10,000,000	500					(16		)							484
Preferred stock dividends declared										(22		)				(22		)
Common stock issued from treasury				1,596,892	2		6									8
Balance at December 31, 2011
(after deducting 6,353,851 treasury shares)	10,000,000	$	500	244,535,841	$	245	$	2,808		$	1,187		$	(3,991	)	$	749

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

THE GOODYEAR TIRE & RUBBER COMPANY

PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS



	Year Ended December 31,
(In millions)	2011			2010			2009
Total Cash Flows from Operating Activities	$	260		$	278		$	328
Cash Flows from Investing Activities:
Capital expenditures	(210		)	(334		)	(270		)
Asset dispositions	69			1			154
Capital contributions to subsidiaries	(14		)	—			—
Capital redemptions from subsidiaries	—			16			—
Return of investment in The Reserve Primary Fund	—			26			47
Decrease (increase) in restricted cash	(1		)	—			2
Other transactions	(1		)	—			(1		)
Total Cash Flows from Investing Activities	(157		)	(291		)	(68		)
Cash Flows from Financing Activities:
Short term debt and overdrafts incurred	—			3			—
Short term debt and overdrafts paid	—			—			(18		)
Long term debt incurred	400			994			1,359
Long term debt paid	(750		)	(974		)	(1,601		)
Proceeds from issuance of preferred stock	484			—			—
Preferred stock dividends paid	(15		)	—			—
Common stock issued	8			1			2
Capital contributions and loans	(101		)	—			—
Transaction with minority interests in subsidiaries	(3		)	—			—
Debt related costs and other transactions	(2		)	(21		)	(22		)
Total Cash Flows from Financing Activities	21			3			(280		)
Net Change in Cash and Cash Equivalents	124			(10		)	(20		)
Cash and Cash Equivalents at Beginning of the Year	792			802			822
Cash and Cash Equivalents at End of the Year	$	916		$	792		$	802

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

THE GOODYEAR TIRE & RUBBER COMPANY

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

LONG TERM DEBT AND FINANCING ARRANGEMENTS

At December 31, 2011, the Parent Company was a party to various long term financing facilities. Under the terms of these facilities, the Parent Company has pledged a significant portion of its assets as collateral. The collateral includes first and second priority security interests in current assets, certain property, plant and equipment, capital stock of certain subsidiaries, and other tangible and intangible assets. In addition, the facilities contain certain covenants that, among other things, limit the Parent Company’s ability to incur additional debt or issue redeemable preferred stock, make certain restricted payments or investments, incur liens, sell assets, incur restrictions on the ability of the Parent Company’s subsidiaries to pay dividends to the Parent Company, enter into affiliate transactions, engage in sale and leaseback transactions, and consolidate, merge, sell or otherwise dispose of all or substantially all of the Parent Company’s assets. These covenants are subject to significant exceptions and qualifications. The primary credit facilities permit the Parent Company to pay dividends on its common stock as long as no default will have occurred and be continuing, additional indebtedness can be incurred by the Parent Company under the facilities following the dividend payment, and certain financial tests are satisfied.

In addition, in the event that the availability under the Parent Company’s first lien revolving credit facility plus the aggregate amount of Available Cash is less than $150 million, the Parent Company will not be permitted to allow the ratio of EBITDA to Consolidated Interest Expense to be less than 2.0 to 1.0 for any period of four consecutive fiscal quarters. “Available Cash,” “EBITDA” and “Consolidated Interest Expense” have the meanings given them in the first lien revolving credit facility. As provided in the Parent Company’s second lien term loan facility, if the Pro Forma Senior Secured Leverage Ratio (the ratio of Consolidated Net Secured Indebtedness to EBITDA) for any period of four consecutive fiscal quarters is greater than 3.0 to 1.0, before the Parent Company may use cash proceeds from certain asset sales to repay any junior lien, senior unsecured or subordinated indebtedness, the Parent Company must first offer to prepay borrowings under the second lien term loan facility. “Pro Forma Senior Secured Leverage Ratio,” “Consolidated Net Secured Indebtedness” and “EBITDA” have the meanings given them in the second lien term loan facility. For further information, refer to the Note to the Consolidated Financial Statements No. 15, Financing Arrangements and Derivative Financial Instruments.

The first lien revolving credit facility has customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse change in financial condition since December 31, 2006. The facility also has customary defaults, including a cross-default to material indebtedness of the Parent Company and its subsidiaries.

The annual aggregate maturities of long term debt and capital leases for the five years subsequent to December 31, 2011 are presented below. Maturities of debt credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.



(In millions)	2012		2013		2014		2015		2016
Debt maturities	$	11	$	4	$	1,200	$	—	$	631

COMMITMENTS AND CONTINGENT LIABILITIES

At December 31, 2011, the Parent Company had binding commitments for raw materials, capital expenditures, utilities and various other types of contracts. Total commitments on contracts that extend beyond the year 2012 are expected to total approximately $129 million. The Parent Company also has off-balance sheet financial guarantees written and other commitments totaling approximately $95 million. In addition, the Parent Company has other contractual commitments, the amounts of which cannot be estimated, pursuant to certain long term agreements under which the Parent Company will purchase varying amounts of certain raw materials and finished goods at agreed upon base prices that may be subject to periodic adjustments for changes in raw material costs and market price adjustments, or in quantities that may be subject to periodic adjustments for changes in the Parent Company's or its suppliers’ production levels.

THE GOODYEAR TIRE & RUBBER COMPANY

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS — (Continued)

At December 31, 2011, the Parent Company had recorded costs related to a wide variety of contingencies. These contingencies included, among other things, environmental matters, workers’ compensation, general and product liability and other matters. For further information, refer to the Note to the Consolidated Financial Statements No. 19, Commitments and Contingent Liabilities.

DIVIDENDS

The Parent Company used the equity method of accounting for investments in consolidated subsidiaries during 2011, 2010 and 2009.

The following table presents cash dividends received during 2011, 2010 and 2009:



(In millions)	2011		2010		2009
Consolidated subsidiaries	$	172	$	143	$	129

There were no stock dividends received from consolidated subsidiaries in 2011, 2010 and 2009.

SUPPLEMENTAL CASH FLOW INFORMATION

The Parent Company made cash payments for interest, net of amounts capitalized in 2011, 2010 and 2009 of $235 million, $258 million and $234 million, respectively. The Parent Company had net cash payments for income taxes in 2011, 2010 and 2009 of $47 million, $19 million and $23 million, respectively.

INTERCOMPANY TRANSACTIONS

The following amounts included in the Parent Company Statements of Operations have been eliminated in the preparation of the consolidated financial statements:



(In millions)	2011			2010			2009
Sales	$	1,076		$	1,129		$	993
Cost of Goods Sold	1,085			1,117			978
Interest Expense	19			11			7
Other Income	(547		)	(413		)	(521		)
Income before Income Taxes	$	519		$	414		$	529