Consolidating Financial Information

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONSOLIDATING FINANCIAL INFORMATION

CONSOLIDATING FINANCIAL INFORMATION

Certain of our subsidiaries have guaranteed our obligations under the $282 million outstanding principal amount of 8.75% notes due 2020, the $700 million outstanding principal amount of 7% senior notes due 2022, the $1.0 billion outstanding principal amount of 5.125% senior notes due 2023 and the $900 million outstanding principal amount of 5% senior notes due 2026 (collectively, the “notes”). The following presents the condensed consolidating financial information separately for:

(i) The Goodyear Tire & Rubber Company (the “Parent Company”), the issuer of the guaranteed obligations;

(ii) Guarantor Subsidiaries, on a combined basis, as specified in the indentures related to Goodyear’s obligations under the notes;

(iii) Non-guarantor Subsidiaries, on a combined basis;

(iv) Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between the Parent Company, the Guarantor Subsidiaries and the Non-guarantor Subsidiaries, (b) eliminate the investments in our subsidiaries, and (c) record consolidating entries; and

(v) The Goodyear Tire & Rubber Company and Subsidiaries on a consolidated basis.

Each guarantor subsidiary is 100% owned by the Parent Company at the date of each balance sheet presented. The notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Changes in intercompany receivables and payables related to operations, such as intercompany sales or service charges, are included in cash flows from operating activities. Intercompany transactions reported as investing or financing activities include the sale of the capital stock of various subsidiaries, loans and other capital transactions between members of the consolidated group. In 2015, the Parent Company acquired the common shares of a non-guarantor subsidiary from another non-guarantor subsidiary at a cost of $145 million. The transaction was settled by the cancellation of intercompany balances between the Parent Company and the transferring non-guarantor subsidiary. In addition, in 2015 the Parent Company capitalized approximately $90 million of intercompany receivables from a non-guarantor subsidiary with a corresponding increase in equity of the subsidiary.

Certain non-guarantor subsidiaries of the Parent Company are limited in their ability to remit funds to it by means of dividends, advances or loans due to required foreign government and/or currency exchange board approvals or limitations in credit agreements or other debt instruments of those subsidiaries.

	Condensed Consolidating Balance Sheet
	September 30, 2016
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	100	$	62	$	813	$	—		$	975
Accounts Receivable, net	791		197		1,661		—			2,649
Accounts Receivable From Affiliates	—		446		—		(446		)	—
Inventories	1,383		149		1,269		(47		)	2,754
Prepaid Expenses and Other Current Assets	52		4		139		(2		)	193
Total Current Assets	2,326		858		3,882		(495		)	6,571
Goodwill	—		24		415		125			564
Intangible Assets	118		—		20		—			138
Deferred Income Taxes	2,031		20		78		—			2,129
Other Assets	229		88		379		6			702
Investments in Subsidiaries	4,388		472		—		(4,860		)	—
Property, Plant and Equipment, net	2,386		274		4,405		(26		)	7,039
Total Assets	$	11,478	$	1,736	$	9,179	$	(5,250	)	$	17,143
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	853	$	139	$	1,608	$	—		$	2,600
Accounts Payable to Affiliates	244		—		202		(446		)	—
Compensation and Benefits	333		29		263		—			625
Other Current Liabilities	361		20		619		(7		)	993
Notes Payable and Overdrafts	—		—		179		—			179
Long Term Debt and Capital Leases Due Within One Year	6		—		397		—			403
Total Current Liabilities	1,797		188		3,268		(453		)	4,800
Long Term Debt and Capital Leases	4,107		—		1,339		—			5,446
Compensation and Benefits	629		94		665		—			1,388
Deferred Income Taxes	—		1		88		—			89
Other Long Term Liabilities	468		10		238		—			716
Total Liabilities	7,001		293		5,598		(453		)	12,439
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	261		—		—		—			261
Other Equity	4,216		1,443		3,354		(4,797		)	4,216
Goodyear Shareholders’ Equity	4,477		1,443		3,354		(4,797		)	4,477
Minority Shareholders’ Equity — Nonredeemable	—		—		227		—			227
Total Shareholders’ Equity	4,477		1,443		3,581		(4,797		)	4,704
Total Liabilities and Shareholders’ Equity	$	11,478	$	1,736	$	9,179	$	(5,250	)	$	17,143

	Condensed Consolidating Balance Sheet
	December 31, 2015
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	354	$	70	$	1,052	$	—		$	1,476
Accounts Receivable, net	814		136		1,083		—			2,033
Accounts Receivable From Affiliates	—		609		—		(609		)	—
Inventories	1,199		157		1,152		(44		)	2,464
Prepaid Expenses and Other Current Assets	42		3		105		3			153
Total Current Assets	2,409		975		3,392		(650		)	6,126
Goodwill	—		24		407		124			555
Intangible Assets	118		—		20		—			138
Deferred Income Taxes	2,049		19		73		—			2,141
Other Assets	216		81		350		7			654
Investments in Subsidiaries	4,088		383		—		(4,471		)	—
Property, Plant and Equipment, net	2,377		216		4,213		(29		)	6,777
Total Assets	$	11,257	$	1,698	$	8,455	$	(5,019	)	$	16,391
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	1,002	$	189	$	1,578	$	—		$	2,769
Accounts Payable to Affiliates	540		—		69		(609		)	—
Compensation and Benefits	411		29		226		—			666
Other Current Liabilities	328		16		547		(5		)	886
Notes Payable and Overdrafts	—		—		49		—			49
Long Term Debt and Capital Leases Due Within One Year	6		—		579		—			585
Total Current Liabilities	2,287		234		3,048		(614		)	4,955
Long Term Debt and Capital Leases	3,796		—		1,278		—			5,074
Compensation and Benefits	725		97		646		—			1,468
Deferred Income Taxes	—		1		92		(2		)	91
Other Long Term Liabilities	529		15		119		(2		)	661
Total Liabilities	7,337		347		5,183		(618		)	12,249
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	267		—		—		—			267
Other Equity	3,653		1,351		3,050		(4,401		)	3,653
Goodyear Shareholders’ Equity	3,920		1,351		3,050		(4,401		)	3,920
Minority Shareholders’ Equity — Nonredeemable	—		—		222		—			222
Total Shareholders’ Equity	3,920		1,351		3,272		(4,401		)	4,142
Total Liabilities and Shareholders’ Equity	$	11,257	$	1,698	$	8,455	$	(5,019	)	$	16,391

	Consolidating Statements of Operations
	Three Months Ended September 30, 2016
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,773		$	462	$	2,319		$	(707	)	$	3,847
Cost of Goods Sold	1,305			411		1,737			(717		)	2,736
Selling, Administrative and General Expense	238			39		322			—			599
Rationalizations	7			—		128			—			135
Interest Expense	64			2		24			—			90
Other (Income) Expense	(24		)	—		(7		)	8			(23		)
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	183			10		115			2			310
United States and Foreign Taxes	(55		)	3		41			1			(10		)
Equity in Earnings of Subsidiaries	79			10		—			(89		)	—
Net Income (Loss)	317			17		74			(88		)	320
Less: Minority Shareholders’ Net Income	—			—		3			—			3
Goodyear Net Income (Loss)	$	317		$	17	$	71		$	(88	)	$	317
Comprehensive Income (Loss)	$	322		$	17	$	70		$	(84	)	$	325
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		3			—			3
Goodyear Comprehensive Income (Loss)	$	322		$	17	$	67		$	(84	)	$	322

	Consolidating Statements of Operations
	Three Months Ended September 30, 2015
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,916		$	568		$	2,669	$	(969	)	$	4,184
Cost of Goods Sold	1,421			523			2,063		(1,007		)	3,000
Selling, Administrative and General Expense	249			41			345		(2		)	633
Rationalizations	5			—			15		—			20
Interest Expense	79			5			34		(13		)	105
Other (Income) Expense	(82		)	1			33		43			(5		)
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	244			(2		)	179		10			431
United States and Foreign Taxes	99			(2		)	26		3			126
Equity in Earnings of Subsidiaries	126			20			—		(146		)	—
Net Income (Loss)	271			20			153		(139		)	305
Less: Minority Shareholders’ Net Income	—			—			34		—			34
Goodyear Net Income (Loss)	$	271		$	20		$	119	$	(139	)	$	271
Comprehensive Income (Loss)	$	204		$	30		$	48	$	(63	)	$	219
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			15		—			15
Goodyear Comprehensive Income (Loss)	$	204		$	30		$	33	$	(63	)	$	204

	Consolidating Statements of Operations
	Nine Months Ended September 30, 2016
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	5,245		$	1,372	$	6,922		$	(2,122	)	$	11,417
Cost of Goods Sold	3,866			1,234		5,311			(2,161		)	8,250
Selling, Administrative and General Expense	714			115		979			(1		)	1,807
Rationalizations	12			—		182			—			194
Interest Expense	211			8		77			(11		)	285
Other (Income) Expense	(29		)	1		(17		)	48			3
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	471			14		390			3			878
United States and Foreign Taxes	50			2		104			5			161
Equity in Earnings of Subsidiaries	282			31		—			(313		)	—
Net Income (Loss)	703			43		286			(315		)	717
Less: Minority Shareholders’ Net Income	—			—		14			—			14
Goodyear Net Income (Loss)	$	703		$	43	$	272		$	(315	)	$	703
Comprehensive Income (Loss)	$	756		$	23	$	311		$	(318	)	$	772
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		16			—			16
Goodyear Comprehensive Income (Loss)	$	756		$	23	$	295		$	(318	)	$	756

	Consolidating Statements of Operations
	Nine Months Ended September 30, 2015
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	5,730		$	1,656		$	7,911	$	(2,917	)	$	12,380
Cost of Goods Sold	4,330			1,515			6,222		(2,974		)	9,093
Selling, Administrative and General Expense	717			123			1,055		(6		)	1,889
Rationalizations	10			—			71		1			82
Interest Expense	245			17			102		(42		)	322
Other (Income) Expense	(283		)	(15		)	52		122			(124		)
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	711			16			409		(18		)	1,118
United States and Foreign Taxes	271			5			91		2			369
Equity in Earnings of Subsidiaries	247			(40		)	—		(207		)	—
Net Income (Loss)	687			(29		)	318		(227		)	749
Less: Minority Shareholders’ Net Income	—			—			62		—			62
Goodyear Net Income (Loss)	$	687		$	(29	)	$	256	$	(227	)	$	687
Comprehensive Income (Loss)	$	620		$	4		$	113	$	(117	)	$	620
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			14		(14		)	—
Goodyear Comprehensive Income (Loss)	$	620		$	4		$	99	$	(103	)	$	620

	Condensed Consolidating Statement of Cash Flows
	Nine Months Ended September 30, 2016
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Cash Flows from Operating Activities:
Total Cash Flows from Operating Activities	$	(4	)	$	17		$	252		$	(28	)	$	237
Cash Flows from Investing Activities:
Capital Expenditures	(266		)	(74		)	(375		)	4			(711		)
Asset Dispositions	11			—			2			—			13
Decrease in Restricted Cash	—			—			1			—			1
Short Term Securities Acquired	—			—			(46		)	—			(46		)
Short Term Securities Redeemed	—			—			34			—			34
Capital Contributions and Loans Incurred	(165		)	—			(248		)	413			—
Capital Redemptions and Loans Paid	48			—			148			(196		)	—
Other Transactions	—			—			2			—			2
Total Cash Flows from Investing Activities	(372		)	(74		)	(482		)	221			(707		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	—			14			219			(14		)	219
Short Term Debt and Overdrafts Paid	(14		)	—			(99		)	14			(99		)
Long Term Debt Incurred	2,339			—			1,790			—			4,129
Long Term Debt Paid	(2,034		)	—			(1,991		)	—			(4,025		)
Common Stock Issued	9			—			—			—			9
Common Stock Repurchased	(200		)	—			—			—			(200		)
Common Stock Dividends Paid	(56		)	—			—			—			(56		)
Capital Contributions and Loans Incurred	248			59			106			(413		)	—
Capital Redemptions and Loans Paid	(148		)	(25		)	(23		)	196			—
Intercompany Dividends Paid	—			—			(24		)	24			—
Transactions with Minority Interests in Subsidiaries	—			—			(9		)	—			(9		)
Debt Related Costs and Other Transactions	(22		)	—			(2		)	—			(24		)
Total Cash Flows from Financing Activities	122			48			(33		)	(193		)	(56		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			1			24			—			25
Net Change in Cash and Cash Equivalents	(254		)	(8		)	(239		)	—			(501		)
Cash and Cash Equivalents at Beginning of the Period	354			70			1,052			—			1,476
Cash and Cash Equivalents at End of the Period	$	100		$	62		$	813		$	—		$	975

	Condensed Consolidating Statement of Cash Flows
	Nine Months Ended September 30, 2015
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Cash Flows from Operating Activities:
Total Cash Flows from Operating Activities	$	326		$	1		$	332		$	(24	)	$	635
Cash Flows from Investing Activities:
Capital Expenditures	(252		)	(27		)	(382		)	5			(656		)
Asset Dispositions	1			—			12			—			13
Increase in Restricted Cash	—			—			(11		)	—			(11		)
Short Term Securities Acquired	—			—			(50		)	—			(50		)
Short Term Securities Redeemed	—			—			25			—			25
Capital Contributions and Loans Incurred	(70		)	—			(90		)	160			—
Capital Redemptions and Loans Paid	12			—			40			(52		)	—
Other Transactions	—			—			5			—			5
Total Cash Flows from Investing Activities	(309		)	(27		)	(451		)	113			(674		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	47			—			72			(47		)	72
Short Term Debt and Overdrafts Paid	—			(8		)	(98		)	47			(59		)
Long Term Debt Incurred	455			—			810			—			1,265
Long Term Debt Paid	(659		)	—			(810		)	—			(1,469		)
Common Stock Issued	33			—			—			—			33
Common Stock Repurchased	(82		)	—			—			—			(82		)
Common Stock Dividends Paid	(49		)	—			—			—			(49		)
Capital Contributions and Loans Incurred	90			12			58			(160		)	—
Capital Redemptions and Loans Paid	(40		)	(12		)	—			52			—
Intercompany Dividends Paid	—			—			(19		)	19			—
Transactions with Minority Interests in Subsidiaries	—			—			(5		)	—			(5		)
Debt Related Costs and Other Transactions	(3		)	—			(9		)	—			(12		)
Total Cash Flows from Financing Activities	(208		)	(8		)	(1		)	(89		)	(306		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			(10		)	(92		)	—			(102		)
Net Change in Cash and Cash Equivalents	(191		)	(44		)	(212		)	—			(447		)
Cash and Cash Equivalents at Beginning of the Period	674			89			1,398			—			2,161
Less: Cash Held for Sale	—			—			(24		)	—			(24		)
Cash and Cash Equivalents at End of the Period	$	483		$	45		$	1,162		$	—		$	1,690