FINANCING ARRANGEMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS

At March 31, 2015, we had total credit arrangements of $8,432 million, of which $1,888 million were unused. At that date, 34% of our debt was at variable interest rates averaging 5.62%.

Notes Payable and Overdrafts, Long Term Debt and Capital Leases due Within One Year and Short Term Financing Arrangements

At March 31, 2015, we had short term committed and uncommitted credit arrangements totaling $417 million, of which $394 million were unused. These arrangements are available primarily to certain of our foreign subsidiaries through various banks at quoted market interest rates.

The following table presents amounts due within one year:



	March 31,			December 31,
(In millions)	2015			2014
Notes payable and overdrafts	$	23		$	30
Weighted average interest rate	8.11		%	10.63		%
Long term debt and capital leases due within one year
Other domestic and foreign debt (including capital leases)	$	238		$	148
Weighted average interest rate	6.00		%	7.75		%
Total obligations due within one year	$	261		$	178

Long Term Debt and Capital Leases and Financing Arrangements

At March 31, 2015, we had long term credit arrangements totaling $8,015 million, of which $1,494 million were unused.

The following table presents long term debt and capital leases, net of unamortized discounts, and interest rates:



	March 31, 2015					December 31, 2014
				Interest					Interest
(In millions)	Amount			Rate		Amount			Rate
Notes:
6.75% Euro Notes due 2019	$	269				$	303
8.25% due 2020	996					996
8.75% due 2020	270					269
6.5% due 2021	900					900
7% due 2022	700					700
7% due 2028	150					150
Credit Facilities:
$2.0 billion first lien revolving credit facility due 2017	—			—		—			—
$1.2 billion second lien term loan facility due 2019	996			4.75	%	1,196			4.75	%
€400 million revolving credit facility due 2016	194			2.49	%	—			—
Pan-European accounts receivable facility	255			1.56	%	343			1.54	%
Chinese credit facilities	533			5.65	%	535			5.65	%
Other foreign and domestic debt⁽¹⁾	886			8.75	%	913			8.70	%
	6,149					6,305
Capital lease obligations	54					59
	6,203					6,364
Less portion due within one year	(238		)			(148		)
	$	5,965				$	6,216

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(1)	Interest rates are weighted average interest rates related to various foreign credit facilities with customary terms and conditions and domestic debt related to our Global and North America Headquarters.

CREDIT FACILITIES

$2.0 billion Amended and Restated First Lien Revolving Credit Facility due 2017

Our amended and restated first lien revolving credit facility is available in the form of loans or letters of credit, with letter of credit availability limited to $800 million. Subject to the consent of the lenders whose commitments are to be increased, we may request that the facility be increased by up to $250 million. Our obligations under the facility are guaranteed by most of our wholly-owned U.S. and Canadian subsidiaries. Our obligations under the facility and our subsidiaries' obligations under the related guarantees are secured by first priority security interests in a variety of collateral. Amounts drawn under this facility will bear interest at LIBOR plus 150 basis points.

Availability under the facility is subject to a borrowing base, which is based primarily on eligible accounts receivable and inventory of The Goodyear Tire & Rubber Company and certain of its U.S. and Canadian subsidiaries. To the extent that our eligible accounts receivable and inventory decline, our borrowing base will decrease and the availability under the facility may decrease below $2.0 billion. As of March 31, 2015, our borrowing base, and therefore our availability, under this facility was $587 million below the facility's stated amount of $2.0 billion.

The 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 our financial condition since December 31, 2011. The facility also has customary defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries.

At March 31, 2015 and December 31, 2014, there were no borrowings outstanding under the first lien revolving credit facility. Letters of credit issued totaled $372 million at March 31, 2015 and $377 million at December 31, 2014.

$1.2 billion Amended and Restated Second Lien Term Loan Facility due 2019

Our obligations under our amended and restated second lien term loan facility are guaranteed by most of our wholly-owned U.S. and Canadian subsidiaries and are secured by second priority security interests in the same collateral securing the $2.0 billion first lien revolving credit facility. This facility may be increased by up to $300 million at our request, subject to the consent of the lenders making such additional term loans. The term loan bears interest at LIBOR plus 375 basis points, subject to a minimum LIBOR rate of 100 basis points.

At March 31, 2015 and December 31, 2014, the amounts outstanding under this facility were $996 million and $1,196 million, respectively.

€400 million Amended and Restated Senior Secured European Revolving Credit Facility due 2016

Our amended and restated €400 million European revolving credit facility consists of (i) a €100 million German tranche that is available only to Goodyear Dunlop Tires Germany GmbH (the “German borrower”) and (ii) a €300 million all-borrower tranche that is available to Goodyear Dunlop Tires Europe B.V. (“GDTE"), the German borrower and certain of GDTE's other subsidiaries. Up to €50 million in letters of credit are available for issuance under the all-borrower tranche. Amounts drawn under this facility will bear interest at LIBOR plus 250 basis points for loans denominated in U.S. dollars or pounds sterling and EURIBOR plus 250 basis points for loans denominated in euros.

GDTE and certain of its subsidiaries in the United Kingdom, Luxembourg, France and Germany provide guarantees to support the facility. The German guarantors secure the German tranche on a first-lien basis and the all-borrower tranche on a second-lien basis. GDTE and its other subsidiaries that provide guarantees secure the all-borrower tranche on a first-lien basis and do not provide collateral support for the German tranche. The Company and its U.S. subsidiaries and primary Canadian subsidiary that guarantee our U.S. senior secured credit facilities described above also provide unsecured guarantees in support of the facility.

The 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 our financial condition since December 31, 2010. The facility also has customary defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries.

At March 31, 2015, the amounts outstanding under the German and all-borrower tranche were $108 million (€100 million) and $86 million (€80 million), respectively. At December 31, 2014, there were no borrowings outstanding under the revolving credit facility. There were no letters of credit issued at March 31, 2015 and December 31, 2014.

Accounts Receivable Securitization Facilities (On-Balance Sheet)

GDTE and certain other of our European subsidiaries are parties to a pan-European accounts receivable securitization facility that expires in 2019. The terms of the facility provide the flexibility to designate annually the maximum amount of funding available under the facility in an amount of not less than €45 million and not more than €450 million. For the period beginning October 17, 2014 to October 15, 2015, the designated maximum amount of the facility is €380 million.

The facility involves an ongoing daily sale of substantially all of the trade accounts receivable of certain GDTE subsidiaries to a bankruptcy-remote French company controlled by one of the liquidity banks in the facility. These subsidiaries retain servicing responsibilities. Utilization under this facility is based on eligible receivable balances.

The funding commitments under the facility will expire upon the earliest to occur of: (a) September 25, 2019, (b) the non-renewal and expiration (without substitution) of all of the back-up liquidity commitments, (c) the early termination of the facility according to its terms (generally upon an Early Amortisation Event (as defined in the facility), which includes, among other things, events similar to the events of default under our senior secured credit facilities; certain tax law changes; or certain changes to law, regulation or accounting standards), or (d) our request for early termination of the facility. The facility’s current back-up liquidity commitments will expire on October 15, 2015.

At March 31, 2015, the amounts available and utilized under this program totaled $255 million (€237 million). At December 31, 2014, the amounts available and utilized under this program totaled $343 million (€283 million). The program does not qualify for sale accounting, and accordingly, these amounts are included in Long Term Debt and Capital Leases.

In addition to the pan-European accounts receivable securitization facility discussed above, subsidiaries in Australia have an accounts receivable securitization program that provides up to $65 million (85 million Australian dollars) of funding. At March 31, 2015, the amounts available and utilized under this program were $39 million and $21 million, respectively. At December 31, 2014, the amounts available and utilized under this program were $43 million and $23 million, respectively. The receivables sold under this program also serve as collateral for the related facility. We retain the risk of loss related to these receivables in the event of non-payment. These amounts are included in Long Term Debt and Capital Leases due Within One Year.

For a description of the collateral securing the credit facilities described above as well as the covenants applicable to them, refer to the Note to the Consolidated Financial Statements No. 14, Financing Arrangements and Derivative Financial Instruments, in our 2014 Form 10-K.

Accounts Receivable Factoring Facilities (Off-Balance Sheet)

Various subsidiaries sold certain of their trade receivables under off-balance sheet programs. For these programs, we have concluded that there is generally no risk of loss to us from non-payment of the sold receivables. At March 31, 2015, the gross amount of receivables sold was $292 million, compared to $365 million at December 31, 2014.

Other Foreign Credit Facilities

A Chinese subsidiary has several financing arrangements in China. At March 31, 2015, these non-revolving credit facilities were fully drawn and can only be used to finance the expansion of our manufacturing facility in China. There were $533 million and $535 million of borrowings outstanding under these facilities at March 31, 2015 and December 31, 2014, respectively. The facilities ultimately mature in 2020 and principal amortization begins in 2015. The facilities contain covenants relating to the Chinese subsidiary and have customary representations and warranties and defaults relating to the Chinese subsidiary’s ability to perform its obligations under the facilities. At both March 31, 2015 and December 31, 2014, restricted cash related to funds obtained under these credit facilities was $4 million.

DERIVATIVE FINANCIAL INSTRUMENTS

We utilize derivative financial instrument contracts and nonderivative instruments to manage interest rate, foreign exchange and commodity price risks. We have established a control environment that includes policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. We do not hold or issue derivative financial instruments for trading purposes.

Foreign Currency Contracts

We enter into foreign currency contracts in order to manage the impact of changes in foreign exchange rates on our consolidated results of operations and future foreign currency-denominated cash flows. These contracts may be used to reduce exposure to currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions resulting primarily from trade purchases and sales, equipment acquisitions, intercompany loans and royalty agreements. Contracts hedging short term trade receivables and payables normally have no hedging designation.

The following table presents the classification changes in fair values for foreign currency contracts not designated as hedging instruments:



	March 31,			December 31,
(In millions)	2015			2014
Fair Values — asset (liability):
Accounts receivable	$	34		$	20
Other current liabilities	(8		)	(4		)

At March 31, 2015 and December 31, 2014, these outstanding foreign currency derivatives had notional amounts of $990 million and $878 million, respectively, and were primarily related to intercompany loans. Other (Income) Expense included net transaction gains of $58 million and net transaction losses of $8 million for the three months ended March 31, 2015 and 2014, respectively. These amounts were substantially offset in Other (Income) Expense by the effect of changing exchange rates on the underlying currency exposures.

The following table presents fair values for foreign currency contracts designated as cash flow hedging instruments:



	March 31,		December 31,
(In millions)	2015		2014
Fair Values — asset (liability):
Accounts receivable	$	16	$	10

At March 31, 2015 and December 31, 2014, these outstanding foreign currency derivatives had notional amounts of $178 million and $157 million, respectively, and primarily related to U.S. dollar denominated intercompany transactions.

We enter into master netting agreements with counterparties. The amounts eligible for offset under the master netting agreements are not material and we have elected a gross presentation of foreign currency contracts in the Consolidated Balance Sheets.

The following table presents information related to foreign currency contracts designated as cash flow hedging instruments (before tax and minority):



	Three Months Ended
	March 31,
(In millions) (Income) Expense	2015			2014
Amounts deferred to Accumulated Other Comprehensive Loss ("AOCL")	$	(15	)	$	2
Amount of deferred (gain) loss reclassified from AOCL into CGS	(5		)	1

The estimated net amount of deferred gains at March 31, 2015 that is expected to be reclassified to earnings within the next twelve months is $19 million.

The counterparties to our foreign currency contracts were considered by us to be substantial and creditworthy financial institutions that are recognized market makers at the time we entered into those contracts. We seek to control our credit exposure to these counterparties by diversifying across multiple counterparties, by setting counterparty credit limits based on long term credit ratings and other indicators of counterparty credit risk such as credit default swap spreads, and by monitoring the financial strength of these counterparties on a regular basis. We also enter into master netting agreements with counterparties when possible. By controlling and monitoring exposure to counterparties in this manner, we believe that we effectively manage the risk of loss due to nonperformance by a counterparty. However, the inability of a counterparty to fulfill its contractual obligations to us could have a material adverse effect on our liquidity, financial position or results of operations in the period in which it occurs.