Consolidating Financial Information

6 Months Ended

Jun. 30, 2017

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 $1.0 billion outstanding principal amount of 5.125% senior notes due 2023, the $900 million outstanding principal amount of 5% senior notes due 2026 and the $700 million outstanding principal amount of 4.875% senior notes due 2027 (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 capital stock, loans and other capital transactions between members of the consolidated group.

During the first quarter of 2017, one of our guarantor subsidiaries merged with the Parent Company.  We have changed the prior year consolidating financial statements to conform to the current structure.  As a result, Parent Company Total Assets decreased $113 million and Guarantor Subsidiaries Total Assets decreased $358 million, with corresponding offsetting adjustments presented on the same line items in the Consolidating Entries and Eliminations column, as of December 31, 2016. In addition, Parent Company Total Liabilities decreased $113 million, Guarantor Subsidiaries Total Liabilities decreased $46 million and Guarantor Subsidiaries Total Shareholders' Equity decreased $312 million, with corresponding offsetting adjustments presented on the same line items in the Consolidating Entries and Eliminations column, as of December 31, 2016. Furthermore, Net Income increased $2 million and $8 million for Guarantor Subsidiaries, with corresponding offsetting adjustments presented on the same line items in the Consolidating Entries and Eliminations column, for the three and six month periods ended June 30, 2016, respectively. The change did not impact the Non-Guarantor Subsidiaries presentation in the previously issued consolidating financial statements.

We revised the presentation of eliminations of certain intercompany transactions solely between Non-Guarantor Subsidiaries within the consolidating statement of operations for the three and six months ended June 30, 2016. The revision did not impact the presentation of amounts in previously issued consolidating financial statements for the Parent Company or Guarantor Subsidiaries columns, nor did it impact amounts previously reported in the Company's Consolidated Statements of Operations. Certain eliminations solely between Non-Guarantor Subsidiaries that were previously presented within the Consolidating Entries and Eliminations column are now presented within the Non-Guarantor Subsidiaries column. Under the prior presentation, the Non-Guarantor Subsidiaries column in the consolidating statement of operations was $322 million and $614 million lower for both Net Sales and Cost of Goods Sold for the three and six month periods ended June 30, 2016, respectively, with corresponding offsetting adjustments presented on the same line items in the Consolidating Entries and Eliminations column. We do not consider these changes in presentation to be material to any previously issued financial statements as the primary purpose of this disclosure is to provide our noteholders with visibility into the entities that provide guarantees in support of the notes, which is disclosed in the Parent Company and Guarantor Subsidiaries columns which are not affected by the revisions described above.

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
	June 30, 2017
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	84	$	55	$	764	$	—		$	903
Accounts Receivable, net	678		136		1,495		—			2,309
Accounts Receivable From Affiliates	—		166		261		(427		)	—
Inventories	1,613		50		1,542		(21		)	3,184
Prepaid Expenses and Other Current Assets	74		2		157		3			236
Total Current Assets	2,449		409		4,219		(445		)	6,632
Goodwill	24		1		421		125			571
Intangible Assets	118		—		19		—			137
Deferred Income Taxes	1,930		32		399		—			2,361
Other Assets	223		51		423		3			700
Investments in Subsidiaries	4,645		590		—		(5,235		)	—
Property, Plant and Equipment, net	2,481		378		4,414		(28		)	7,245
Total Assets	$	11,870	$	1,461	$	9,895	$	(5,580	)	$	17,646
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	851	$	106	$	1,817	$	—		$	2,774
Accounts Payable to Affiliates	427		—		—		(427		)	—
Compensation and Benefits	311		15		241		—			567
Other Current Liabilities	350		1		706		(2		)	1,055
Notes Payable and Overdrafts	—		—		238		—			238
Long Term Debt and Capital Leases Due Within One Year	5		—		430		—			435
Total Current Liabilities	1,944		122		3,432		(429		)	5,069
Long Term Debt and Capital Leases	4,017		52		1,334		—			5,403
Compensation and Benefits	598		100		710		—			1,408
Deferred Income Taxes	—		1		85		—			86
Other Long Term Liabilities	402		11		122		—			535
Total Liabilities	6,961		286		5,683		(429		)	12,501
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	252		—		—		—			252
Other Equity	4,657		1,175		3,976		(5,151		)	4,657
Goodyear Shareholders’ Equity	4,909		1,175		3,976		(5,151		)	4,909
Minority Shareholders’ Equity — Nonredeemable	—		—		236		—			236
Total Shareholders’ Equity	4,909		1,175		4,212		(5,151		)	5,145
Total Liabilities and Shareholders’ Equity	$	11,870	$	1,461	$	9,895	$	(5,580	)	$	17,646

	Condensed Consolidating Balance Sheet
	December 31, 2016
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	188	$	55	$	889	$	—		$	1,132
Accounts Receivable, net	589		106		1,074		—			1,769
Accounts Receivable From Affiliates	—		277		270		(547		)	—
Inventories	1,443		25		1,178		(19		)	2,627
Prepaid Expenses and Other Current Assets	57		3		130		—			190
Total Current Assets	2,277		466		3,541		(566		)	5,718
Goodwill	24		—		391		120			535
Intangible Assets	118		—		18		—			136
Deferred Income Taxes	2,010		31		373		—			2,414
Other Assets	223		53		387		5			668
Investments in Subsidiaries	4,344		541		—		(4,885		)	—
Property, Plant and Equipment, net	2,481		308		4,279		(28		)	7,040
Total Assets	$	11,477	$	1,399	$	8,989	$	(5,354	)	$	16,511
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	905	$	142	$	1,542	$	—		$	2,589
Accounts Payable to Affiliates	547		—		—		(547		)	—
Compensation and Benefits	365		15		204		—			584
Other Current Liabilities	355		—		611		(3		)	963
Notes Payable and Overdrafts	—		—		245		—			245
Long Term Debt and Capital Leases Due Within One Year	6		—		430		—			436
Total Current Liabilities	2,178		157		3,032		(550		)	4,817
Long Term Debt and Capital Leases	3,685		—		1,113		—			4,798
Compensation and Benefits	682		98		680		—			1,460
Deferred Income Taxes	—		1		84		—			85
Other Long Term Liabilities	425		12		188		1			626
Total Liabilities	6,970		268		5,097		(549		)	11,786
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	252		—		—		—			252
Other Equity	4,255		1,131		3,674		(4,805		)	4,255
Goodyear Shareholders’ Equity	4,507		1,131		3,674		(4,805		)	4,507
Minority Shareholders’ Equity — Nonredeemable	—		—		218		—			218
Total Shareholders’ Equity	4,507		1,131		3,892		(4,805		)	4,725
Total Liabilities and Shareholders’ Equity	$	11,477	$	1,399	$	8,989	$	(5,354	)	$	16,511

	Consolidating Statements of Operations
	Three Months Ended June 30, 2017
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,863	$	290		$	2,316		$	(783	)	$	3,686
Cost of Goods Sold	1,462		286			1,842			(798		)	2,792
Selling, Administrative and General Expense	248		10			324			1			583
Rationalizations	1		—			26			—			27
Interest Expense	69		2			31			(13		)	89
Other (Income) Expense	—		(1		)	(19		)	25			5
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	83		(7		)	112			2			190
United States and Foreign Taxes	17		(3		)	20			2			36
Equity in Earnings of Subsidiaries	81		16			—			(97		)	—
Net Income (Loss)	147		12			92			(97		)	154
Less: Minority Shareholders’ Net Income	—		—			7			—			7
Goodyear Net Income (Loss)	$	147	$	12		$	85		$	(97	)	$	147
Comprehensive Income (Loss)	$	198	$	13		$	146		$	(145	)	$	212
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—		—			14			—			14
Goodyear Comprehensive Income (Loss)	$	198	$	13		$	132		$	(145	)	$	198

	Consolidating Statements of Operations
	Three Months Ended June 30, 2016
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,889		$	351	$	2,347	$	(708	)	$	3,879
Cost of Goods Sold	1,407			329		1,797		(720		)	2,813
Selling, Administrative and General Expense	261			11		321		—			593
Rationalizations	3			—		45		—			48
Interest Expense	78			4		22		—			104
Other (Income) Expense	(1		)	—		7		14			20
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	141			7		155		(2		)	301
United States and Foreign Taxes	49			2		37		5			93
Equity in Earnings of Subsidiaries	110			1		—		(111		)	—
Net Income (Loss)	202			6		118		(118		)	208
Less: Minority Shareholders’ Net Income	—			—		6		—			6
Goodyear Net Income (Loss)	$	202		$	6	$	112	$	(118	)	$	202
Comprehensive Income (Loss)	$	190		$	1	$	86	$	(86	)	$	191
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		1		—			1
Goodyear Comprehensive Income (Loss)	$	190		$	1	$	85	$	(86	)	$	190

	Consolidating Statements of Operations
	Six Months Ended June 30, 2017
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	3,630		$	589	$	4,618		$	(1,452	)	$	7,385
Cost of Goods Sold	2,842			560		3,638			(1,483		)	5,557
Selling, Administrative and General Expense	507			19		636			—			1,162
Rationalizations	2			—		54			—			56
Interest Expense	134			4		62			(24		)	176
Other (Income) Expense	(19		)	1		(23		)	46			5
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	164			5		251			9			429
United States and Foreign Taxes	60			—		49			(3		)	106
Equity in Earnings of Subsidiaries	209			31		—			(240		)	—
Net Income (Loss)	313			36		202			(228		)	323
Less: Minority Shareholders’ Net Income	—			—		10			—			10
Goodyear Net Income (Loss)	$	313		$	36	$	192		$	(228	)	$	313
Comprehensive Income (Loss)	$	459		$	41	$	340		$	(358	)	$	482
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		23			—			23
Goodyear Comprehensive Income (Loss)	$	459		$	41	$	317		$	(358	)	$	459

	Consolidating Statements of Operations
	Six Months Ended June 30, 2016
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	3,676		$	665		$	4,603		$	(1,374	)	$	7,570
Cost of Goods Sold	2,737			624			3,574			(1,421		)	5,514
Selling, Administrative and General Expense	531			21			657			(1		)	1,208
Rationalizations	5			—			54			—			59
Interest Expense	146			7			53			(11		)	195
Other (Income) Expense	(5		)	1			(10		)	40			26
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	262			12			275			19			568
United States and Foreign Taxes	105			(1		)	63			4			171
Equity in Earnings of Subsidiaries	229			21			—			(250		)	—
Net Income (Loss)	386			34			212			(235		)	397
Less: Minority Shareholders’ Net Income	—			—			11			—			11
Goodyear Net Income (Loss)	$	386		$	34		$	201		$	(235	)	$	386
Comprehensive Income (Loss)	$	434		$	14		$	241		$	(242	)	$	447
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			13			—			13
Goodyear Comprehensive Income (Loss)	$	434		$	14		$	228		$	(242	)	$	434

	Condensed Consolidating Statement of Cash Flows
	Six Months Ended June 30, 2017
(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	$	(49	)	$	(30	)	$	(90	)	$	(16	)	$	(185	)
Cash Flows from Investing Activities:
Capital Expenditures	(190		)	(86		)	(224		)	3			(497		)
Asset Dispositions	1			—			1			—			2
Short Term Securities Acquired	—			—			(43		)	—			(43		)
Short Term Securities Redeemed	—			—			43			—			43
Capital Contributions and Loans Incurred	(62		)	—			(30		)	92			—
Capital Redemptions and Loans Paid	—			—			61			(61		)	—
Other Transactions	—			—			(3		)	—			(3		)
Total Cash Flows from Investing Activities	(251		)	(86		)	(195		)	34			(498		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	40			—			250			—			290
Short Term Debt and Overdrafts Paid	(40		)	—			(263		)	—			(303		)
Long Term Debt Incurred	2,090			52			1,314			—			3,456
Long Term Debt Paid	(1,759		)	—			(1,146		)	—			(2,905		)
Common Stock Issued	11			—			—			—			11
Common Stock Repurchased	(30		)	—			—			—			(30		)
Common Stock Dividends Paid	(50		)	—			—			—			(50		)
Capital Contributions and Loans Incurred	30			62			—			(92		)	—
Capital Redemptions and Loans Paid	(61		)	—			—			61			—
Intercompany Dividends Paid	—			—			(13		)	13			—
Transactions with Minority Interests in Subsidiaries	—			—			(5		)	—			(5		)
Debt Related Costs and Other Transactions	(26		)	—			(12		)	—			(38		)
Total Cash Flows from Financing Activities	205			114			125			(18		)	426
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			2			35			—			37
Net Change in Cash, Cash Equivalents and Restricted Cash	(95		)	—			(125		)	—			(220		)
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period	210			55			924			—			1,189
Cash, Cash Equivalents and Restricted Cash at End of the Period	$	115		$	55		$	799		$	—		$	969

	Condensed Consolidating Statement of Cash Flows
	Six Months Ended June 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	$	(199	)	$	(11	)	$	160		$	(17	)	$	(67	)
Cash Flows from Investing Activities:
Capital Expenditures	(189		)	(40		)	(239		)	2			(466		)
Asset Dispositions	—			—			1			—			1
Short Term Securities Acquired	—			—			(34		)	—			(34		)
Short Term Securities Redeemed	—			—			23			—			23
Capital Contributions and Loans Incurred	(93		)	—			(243		)	336			—
Capital Redemptions and Loans Paid	25			—			143			(168		)	—
Total Cash Flows from Investing Activities	(257		)	(40		)	(349		)	170			(476		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	—			—			124			—			124
Short Term Debt and Overdrafts Paid	—			—			(36		)	—			(36		)
Long Term Debt Incurred	2,051			—			1,232			—			3,283
Long Term Debt Paid	(1,523		)	—			(1,408		)	—			(2,931		)
Common Stock Issued	3			—			—			—			3
Common Stock Repurchased	(150		)	—			—			—			(150		)
Common Stock Dividends Paid	(38		)	—			—			—			(38		)
Capital Contributions and Loans Incurred	243			59			34			(336		)	—
Capital Redemptions and Loans Paid	(143		)	(25		)	—			168			—
Intercompany Dividends Paid	—			—			(15		)	15			—
Transactions with Minority Interests in Subsidiaries	—			—			(7		)	—			(7		)
Debt Related Costs and Other Transactions	(66		)	—			(10		)	—			(76		)
Total Cash Flows from Financing Activities	377			34			(86		)	(153		)	172
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			2			20			—			22
Net Change in Cash, Cash Equivalents and Restricted Cash	(79		)	(15		)	(255		)	—			(349		)
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period	361			67			1,074			—			1,502
Cash, Cash Equivalents and Restricted Cash at End of the Period	$	282		$	52		$	819		$	—		$	1,153