Consolidating Financial Information

9 Months Ended

Sep. 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 $4 million and $12 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 nine month periods ended September 30, 2016, respectively. The change did not impact the Non-Guarantor Subsidiaries presentation in the previously issued consolidating financial statements.

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, 2017
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	59	$	36	$	727	$	—		$	822
Accounts Receivable, net	660		153		1,859		—			2,672
Accounts Receivable From Affiliates	—		144		260		(404		)	—
Inventories	1,582		52		1,401		(44		)	2,991
Prepaid Expenses and Other Current Assets	73		2		165		2			242
Total Current Assets	2,374		387		4,412		(446		)	6,727
Goodwill	24		1		435		127			587
Intangible Assets	117		—		20		—			137
Deferred Income Taxes	1,883		39		434		—			2,356
Other Assets	215		53		443		3			714
Investments in Subsidiaries	4,689		592		—		(5,281		)	—
Property, Plant and Equipment, net	2,469		403		4,486		(27		)	7,331
Total Assets	$	11,771	$	1,475	$	10,230	$	(5,624	)	$	17,852
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	822	$	104	$	1,698	$	—		$	2,624
Accounts Payable to Affiliates	404		—		—		(404		)	—
Compensation and Benefits	306		16		260		—			582
Other Current Liabilities	342		9		711		—			1,062
Notes Payable and Overdrafts	30		—		246		—			276
Long Term Debt and Capital Leases Due Within One Year	4		—		374		—			378
Total Current Liabilities	1,908		129		3,289		(404		)	4,922
Long Term Debt and Capital Leases	3,974		52		1,711		—			5,737
Compensation and Benefits	620		104		735		—			1,459
Deferred Income Taxes	—		1		90		—			91
Other Long Term Liabilities	387		11		124		—			522
Total Liabilities	6,889		297		5,949		(404		)	12,731
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	246		—		—		—			246
Other Equity	4,636		1,178		4,042		(5,220		)	4,636
Goodyear Shareholders’ Equity	4,882		1,178		4,042		(5,220		)	4,882
Minority Shareholders’ Equity — Nonredeemable	—		—		239		—			239
Total Shareholders’ Equity	4,882		1,178		4,281		(5,220		)	5,121
Total Liabilities and Shareholders’ Equity	$	11,771	$	1,475	$	10,230	$	(5,624	)	$	17,852

	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 September 30, 2017
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,790		$	294		$	2,448	$	(611	)	$	3,921
Cost of Goods Sold	1,402			264			2,024		(621		)	3,069
Selling, Administrative and General Expense	233			10			313		—			556
Rationalizations	20			—			26		—			46
Interest Expense	62			2			34		(14		)	84
Other (Income) Expense	(54		)	(9		)	4		63			4
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	127			27			47		(39		)	162
United States and Foreign Taxes	9			6			12		3			30
Equity in Earnings of Subsidiaries	11			(3		)	—		(8		)	—
Net Income (Loss)	129			18			35		(50		)	132
Less: Minority Shareholders’ Net Income	—			—			3		—			3
Goodyear Net Income (Loss)	$	129		$	18		$	32	$	(50	)	$	129
Comprehensive Income (Loss)	$	166		$	16		$	86	$	(98	)	$	170
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			4		—			4
Goodyear Comprehensive Income (Loss)	$	166		$	16		$	82	$	(98	)	$	166

	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	$	1,888		$	323	$	2,319		$	(683	)	$	3,847
Cost of Goods Sold	1,394			298		1,737			(693		)	2,736
Selling, Administrative and General Expense	268			9		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	179			14		115			2			310
United States and Foreign Taxes	(55		)	3		41			1			(10		)
Equity in Earnings of Subsidiaries	83			10		—			(93		)	—
Net Income (Loss)	317			21		74			(92		)	320
Less: Minority Shareholders’ Net Income	—			—		3			—			3
Goodyear Net Income (Loss)	$	317		$	21	$	71		$	(92	)	$	317
Comprehensive Income (Loss)	$	322		$	21	$	70		$	(88	)	$	325
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		3			—			3
Goodyear Comprehensive Income (Loss)	$	322		$	21	$	67		$	(88	)	$	322

	Consolidating Statements of Operations
	Nine Months Ended September 30, 2017
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	5,420		$	883		$	7,066		$	(2,063	)	$	11,306
Cost of Goods Sold	4,244			824			5,662			(2,104		)	8,626
Selling, Administrative and General Expense	740			29			949			—			1,718
Rationalizations	22			—			80			—			102
Interest Expense	196			6			96			(38		)	260
Other (Income) Expense	(73		)	(8		)	(19		)	109			9
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	291			32			298			(30		)	591
United States and Foreign Taxes	69			6			61			—			136
Equity in Earnings of Subsidiaries	220			28			—			(248		)	—
Net Income (Loss)	442			54			237			(278		)	455
Less: Minority Shareholders’ Net Income	—			—			13			—			13
Goodyear Net Income (Loss)	$	442		$	54		$	224		$	(278	)	$	442
Comprehensive Income (Loss)	$	625		$	57		$	426		$	(456	)	$	652
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			27			—			27
Goodyear Comprehensive Income (Loss)	$	625		$	57		$	399		$	(456	)	$	625

	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	$	5,564		$	988	$	6,922		$	(2,057	)	$	11,417
Cost of Goods Sold	4,131			922		5,311			(2,114		)	8,250
Selling, Administrative and General Expense	799			30		979			(1		)	1,807
Rationalizations	12			—		182			—			194
Interest Expense	210			9		77			(11		)	285
Other (Income) Expense	(29		)	1		(17		)	48			3
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	441			26		390			21			878
United States and Foreign Taxes	50			2		104			5			161
Equity in Earnings of Subsidiaries	312			31		—			(343		)	—
Net Income (Loss)	703			55		286			(327		)	717
Less: Minority Shareholders’ Net Income	—			—		14			—			14
Goodyear Net Income (Loss)	$	703		$	55	$	272		$	(327	)	$	703
Comprehensive Income (Loss)	$	756		$	35	$	311		$	(330	)	$	772
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		16			—			16
Goodyear Comprehensive Income (Loss)	$	756		$	35	$	295		$	(330	)	$	756

	Condensed Consolidating Statement of Cash Flows
	Nine Months Ended September 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	$	179		$	—		$	(303	)	$	(30	)	$	(154	)
Cash Flows from Investing Activities:
Capital Expenditures	(247		)	(115		)	(323		)	2			(683		)
Asset Dispositions	1			—			8			—			9
Short Term Securities Acquired	—			—			(51		)	—			(51		)
Short Term Securities Redeemed	—			—			51			—			51
Capital Contributions and Loans Incurred	(75		)	—			(41		)	116			—
Capital Redemptions and Loans Paid	21			—			61			(82		)	—
Other Transactions	—			—			(1		)	—			(1		)
Total Cash Flows from Investing Activities	(300		)	(115		)	(296		)	36			(675		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	175			—			369			—			544
Short Term Debt and Overdrafts Paid	(145		)	—			(378		)	—			(523		)
Long Term Debt Incurred	2,597			52			2,323			—			4,972
Long Term Debt Paid	(2,310		)	—			(1,883		)	—			(4,193		)
Common Stock Issued	12			—			—			—			12
Common Stock Repurchased	(205		)	—			—			—			(205		)
Common Stock Dividends Paid	(75		)	—			—			—			(75		)
Capital Contributions and Loans Incurred	41			62			13			(116		)	—
Capital Redemptions and Loans Paid	(61		)	(21		)	—			82			—
Intercompany Dividends Paid	—			—			(28		)	28			—
Transactions with Minority Interests in Subsidiaries	—			—			(6		)	—			(6		)
Debt Related Costs and Other Transactions	(38		)	—			(31		)	—			(69		)
Total Cash Flows from Financing Activities	(9		)	93			379			(6		)	457
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			3			48			—			51
Net Change in Cash, Cash Equivalents and Restricted Cash	(130		)	(19		)	(172		)	—			(321		)
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	$	80		$	36		$	752		$	—		$	868

	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	$	31		$	26		$	261		$	(28	)	$	290
Cash Flows from Investing Activities:
Capital Expenditures	(271		)	(69		)	(375		)	4			(711		)
Asset Dispositions	11			—			2			—			13
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	(377		)	(69		)	(483		)	221			(708		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	—			—			219			—			219
Short Term Debt and Overdrafts Paid	—			—			(99		)	—			(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	(66		)	—			(11		)	—			(77		)
Total Cash Flows from Financing Activities	92			34			(42		)	(193		)	(109		)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			1			24			—			25
Net Change in Cash, Cash Equivalents and Restricted Cash	(254		)	(8		)	(240		)	—			(502		)
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	$	107		$	59		$	834		$	—		$	1,000