Consolidating Financial Information

3 Months Ended

Mar. 31, 2018

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.

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
	March 31, 2018
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	125	$	26		$	686	$	—		$	837
Accounts Receivable, net	628		126			1,755		—			2,509
Accounts Receivable From Affiliates	—		264			32		(296		)	—
Inventories	1,505		53			1,364		(27		)	2,895
Prepaid Expenses and Other Current Assets	82		1			162		2			247
Total Current Assets	2,340		470			3,999		(321		)	6,488
Goodwill	24		1			453		128			606
Intangible Assets	119		—			21		—			140
Deferred Income Taxes	1,552		33			451		3			2,039
Other Assets	216		50			539		—			805
Investments in Subsidiaries	4,601		537			—		(5,138		)	—
Property, Plant and Equipment, net	2,471		426			4,632		(27		)	7,502
Total Assets	$	11,323	$	1,517		$	10,095	$	(5,355	)	$	17,580
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	875	$	113		$	1,862	$	—		$	2,850
Accounts Payable to Affiliates	296		—			—		(296		)	—
Compensation and Benefits	303		16			215		—			534
Other Current Liabilities	342		(3		)	559		—			898
Notes Payable and Overdrafts	—		—			332		—			332
Long Term Debt and Capital Leases Due Within One Year	59		—			268		—			327
Total Current Liabilities	1,875		126			3,236		(296		)	4,941
Long Term Debt and Capital Leases	3,710		167			1,723		—			5,600
Compensation and Benefits	642		104			732		—			1,478
Deferred Income Taxes	—		—			101		—			101
Other Long Term Liabilities	359		9			130		—			498
Total Liabilities	6,586		406			5,922		(296		)	12,618
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	240		—			—		—			240
Other Equity	4,497		1,111			3,948		(5,059		)	4,497
Goodyear Shareholders’ Equity	4,737		1,111			3,948		(5,059		)	4,737
Minority Shareholders’ Equity — Nonredeemable	—		—			225		—			225
Total Shareholders’ Equity	4,737		1,111			4,173		(5,059		)	4,962
Total Liabilities and Shareholders’ Equity	$	11,323	$	1,517		$	10,095	$	(5,355	)	$	17,580

	Condensed Consolidating Balance Sheet
	December 31, 2017
(In millions)	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	176	$	32	$	835	$	—		$	1,043
Accounts Receivable, net	649		116		1,260		—			2,025
Accounts Receivable From Affiliates	—		254		71		(325		)	—
Inventories	1,444		43		1,329		(29		)	2,787
Prepaid Expenses and Other Current Assets	59		3		157		5			224
Total Current Assets	2,328		448		3,652		(349		)	6,079
Goodwill	24		1		444		126			595
Intangible Assets	119		—		20		—			139
Deferred Income Taxes	1,549		35		424		—			2,008
Other Assets	221		51		518		2			792
Investments in Subsidiaries	4,424		503		—		(4,927		)	—
Property, Plant and Equipment, net	2,491		420		4,569		(29		)	7,451
Total Assets	$	11,156	$	1,458	$	9,627	$	(5,177	)	$	17,064
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	927	$	115	$	1,765	$	—		$	2,807
Accounts Payable to Affiliates	325		—		—		(325		)	—
Compensation and Benefits	322		15		202		—			539
Other Current Liabilities	323		2		701		—			1,026
Notes Payable and Overdrafts	—		—		262		—			262
Long Term Debt and Capital Leases Due Within One Year	60		—		331		—			391
Total Current Liabilities	1,957		132		3,261		(325		)	5,025
Long Term Debt and Capital Leases	3,544		152		1,380		—			5,076
Compensation and Benefits	682		109		724		—			1,515
Deferred Income Taxes	—		1		99		—			100
Other Long Term Liabilities	370		8		120		—			498
Total Liabilities	6,553		402		5,584		(325		)	12,214
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	240		—		—		—			240
Other Equity	4,363		1,056		3,796		(4,852		)	4,363
Goodyear Shareholders’ Equity	4,603		1,056		3,796		(4,852		)	4,603
Minority Shareholders’ Equity — Nonredeemable	—		—		247		—			247
Total Shareholders’ Equity	4,603		1,056		4,043		(4,852		)	4,850
Total Liabilities and Shareholders’ Equity	$	11,156	$	1,458	$	9,627	$	(5,177	)	$	17,064

	Consolidating Statements of Operations
	Three Months Ended March 31, 2018
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,684		$	309	$	2,457	$	(620	)	$	3,830
Cost of Goods Sold	1,365			273		1,978		(640		)	2,976
Selling, Administrative and General Expense	259			10		322		—			591
Rationalizations	6			—		31		—			37
Interest Expense	54			5		23		(6		)	76
Other (Income) Expense	10			7		—		20			37
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	(10		)	14		103		6			113
United States and Foreign Taxes	(3		)	3		30		3			33
Equity in Earnings of Subsidiaries	82			22		—		(104		)	—
Net Income (Loss)	75			33		73		(101		)	80
Less: Minority Shareholders’ Net Income	—			—		5		—			5
Goodyear Net Income (Loss)	$	75		$	33	$	68	$	(101	)	$	75
Comprehensive Income (Loss)	$	184		$	55	$	155	$	(203	)	$	191
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		7		—			7
Goodyear Comprehensive Income (Loss)	$	184		$	55	$	148	$	(203	)	$	184

	Consolidating Statements of Operations
	Three Months Ended March 31, 2017
(In millions)	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,767		$	299	$	2,302	$	(669	)	$	3,699
Cost of Goods Sold	1,378			273		1,794		(685		)	2,760
Selling, Administrative and General Expense	259			8		310		(1		)	576
Rationalizations	1			—		28		—			29
Interest Expense	65			2		31		(11		)	87
Other (Income) Expense	(17		)	4		—		21			8
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	81			12		139		7			239
United States and Foreign Taxes	43			3		29		(5		)	70
Equity in Earnings of Subsidiaries	128			15		—		(143		)	—
Net Income (Loss)	166			24		110		(131		)	169
Less: Minority Shareholders’ Net Income	—			—		3		—			3
Goodyear Net Income (Loss)	$	166		$	24	$	107	$	(131	)	$	166
Comprehensive Income (Loss)	$	261		$	28	$	194	$	(213	)	$	270
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—		9		—			9
Goodyear Comprehensive Income (Loss)	$	261		$	28	$	185	$	(213	)	$	261

	Condensed Consolidating Statement of Cash Flows
	Three Months Ended March 31, 2018
(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	$	266		$	—		$	(656	)	$	1		$	(389	)
Cash Flows from Investing Activities:
Capital Expenditures	(101		)	(28		)	(118		)	(1		)	(248		)
Short Term Securities Acquired	—			—			(8		)	—			(8		)
Short Term Securities Redeemed	—			—			8			—			8
Capital Contributions and Loans Incurred	(91		)	—			(91		)	182			—
Capital Redemptions and Loans Paid	38			—			360			(398		)	—
Total Cash Flows from Investing Activities	(154		)	(28		)	151			(217		)	(248		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	325			—			259			—			584
Short Term Debt and Overdrafts Paid	(325		)	—			(193		)	—			(518		)
Long Term Debt Incurred	705			15			932			—			1,652
Long Term Debt Paid	(541		)	—			(685		)	—			(1,226		)
Common Stock Issued	1			—			—			—			1
Common Stock Repurchased	(25		)	—			—			—			(25		)
Common Stock Dividends Paid	(34		)	—			—			—			(34		)
Capital Contributions and Loans Incurred	91			8			83			(182		)	—
Capital Redemptions and Loans Paid	(360		)	—			(38		)	398			—
Transactions with Minority Interests in Subsidiaries	—			—			(22		)	—			(22		)
Debt Related Costs and Other Transactions	7			—			(20		)	—			(13		)
Total Cash Flows from Financing Activities	(156		)	23			316			216			399
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			(1		)	17			—			16
Net Change in Cash, Cash Equivalents and Restricted Cash	(44		)	(6		)	(172		)	—			(222		)
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period	201			32			877			—			1,110
Cash, Cash Equivalents and Restricted Cash at End of the Period	$	157		$	26		$	705		$	—		$	888

	Condensed Consolidating Statement of Cash Flows
	Three Months Ended March 31, 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	$	(81	)	$	(4	)	$	(191	)	$	(10	)	$	(286	)
Cash Flows from Investing Activities:
Capital Expenditures	(113		)	(49		)	(109		)	—			(271		)
Asset Dispositions	1			—			—			—			1
Short Term Securities Acquired	—			—			(11		)	—			(11		)
Short Term Securities Redeemed	—			—			11			—			11
Capital Contributions and Loans Incurred	(23		)	—			(30		)	53			—
Capital Redemptions and Loans Paid	—			—			448			(448		)	—
Total Cash Flows from Investing Activities	(135		)	(49		)	309			(395		)	(270		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	—			—			51			—			51
Short Term Debt and Overdrafts Paid	—			—			(82		)	—			(82		)
Long Term Debt Incurred	1,270			—			568			—			1,838
Long Term Debt Paid	(655		)	—			(714		)	—			(1,369		)
Common Stock Issued	9			—			—			—			9
Common Stock Repurchased	(25		)	—			—			—			(25		)
Common Stock Dividends Paid	(25		)	—			—			—			(25		)
Capital Contributions and Loans Incurred	30			23			—			(53		)	—
Capital Redemptions and Loans Paid	(448		)	—			—			448			—
Intercompany Dividends Paid	—			—			(10		)	10			—
Debt Related Costs and Other Transactions	12			—			(11		)	—			1
Total Cash Flows from Financing Activities	168			23			(198		)	405			398
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			—			20			—			20
Net Change in Cash, Cash Equivalents and Restricted Cash	(48		)	(30		)	(60		)	—			(138		)
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	$	162		$	25		$	864		$	—		$	1,051