Consolidating Financial Information

6 Months Ended

Jun. 30, 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
	June 30, 2018
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	135	$	49		$	791	$	—		$	975
Accounts Receivable, net	658		146			1,584		—			2,388
Accounts Receivable From Affiliates	—		198			—		(198		)	—
Inventories	1,522		63			1,375		(19		)	2,941
Prepaid Expenses and Other Current Assets	79		2			181		3			265
Total Current Assets	2,394		458			3,931		(214		)	6,569
Goodwill	24		1			426		125			576
Intangible Assets	118		—			20		—			138
Deferred Income Taxes	1,598		31			402		4			2,035
Other Assets	249		49			506		—			804
Investments in Subsidiaries	4,294		517			—		(4,811		)	—
Property, Plant and Equipment, net	2,470		427			4,363		(27		)	7,233
Total Assets	$	11,147	$	1,483		$	9,648	$	(4,923	)	$	17,355
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	928	$	119		$	1,833	$	—		$	2,880
Accounts Payable to Affiliates	65		—			133		(198		)	—
Compensation and Benefits	281		14			216		—			511
Other Current Liabilities	345		(9		)	485		—			821
Notes Payable and Overdrafts	—		—			335		—			335
Long Term Debt and Capital Leases Due Within One Year	59		—			227		—			286
Total Current Liabilities	1,678		124			3,229		(198		)	4,833
Long Term Debt and Capital Leases	3,886		167			1,673		—			5,726
Compensation and Benefits	589		97			683		—			1,369
Deferred Income Taxes	—		—			99		—			99
Other Long Term Liabilities	357		9			118		—			484
Total Liabilities	6,510		397			5,802		(198		)	12,511
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	237		—			—		—			237
Other Equity	4,400		1,086			3,639		(4,725		)	4,400
Goodyear Shareholders’ Equity	4,637		1,086			3,639		(4,725		)	4,637
Minority Shareholders’ Equity — Nonredeemable	—		—			207		—			207
Total Shareholders’ Equity	4,637		1,086			3,846		(4,725		)	4,844
Total Liabilities and Shareholders’ Equity	$	11,147	$	1,483		$	9,648	$	(4,923	)	$	17,355

	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 June 30, 2018
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,834		$	329		$	2,406		$	(728	)	$	3,841
Cost of Goods Sold	1,464			335			1,899			(749		)	2,949
Selling, Administrative and General Expense	258			8			322			—			588
Rationalizations	(1		)	—			(1		)	—			(2		)
Interest Expense	56			5			22			(5		)	78
Other (Income) Expense	14			3			8			20			45
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	43			(22		)	156			6			183
United States and Foreign Taxes	(37		)	(5		)	62			(1		)	19
Equity in Earnings of Subsidiaries	77			12			—			(89		)	—
Net Income (Loss)	157			(5		)	94			(82		)	164
Less: Minority Shareholders’ Net Income	—			—			7			—			7
Goodyear Net Income (Loss)	$	157		$	(5	)	$	87		$	(82	)	$	157
Comprehensive Income (Loss)	$	2		$	(25	)	$	(123	)	$	137		$	(9	)
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			(11		)	—			(11		)
Goodyear Comprehensive Income (Loss)	$	2		$	(25	)	$	(112	)	$	137		$	2

	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	1,459		284			1,840			(798		)	2,785
Selling, Administrative and General Expense	247		9			322			1			579
Rationalizations	1		—			26			—			27
Interest Expense	69		2			31			(13		)	89
Other (Income) Expense	4		2			(15		)	25			16
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
	Six Months Ended June 30, 2018
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	3,518		$	638		$	4,863		$	(1,348	)	$	7,671
Cost of Goods Sold	2,829			608			3,877			(1,389		)	5,925
Selling, Administrative and General Expense	517			18			644			—			1,179
Rationalizations	5			—			30			—			35
Interest Expense	110			10			45			(11		)	154
Other (Income) Expense	24			10			8			40			82
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	33			(8		)	259			12			296
United States and Foreign Taxes	(40		)	(2		)	92			2			52
Equity in Earnings of Subsidiaries	159			34			—			(193		)	—
Net Income (Loss)	232			28			167			(183		)	244
Less: Minority Shareholders’ Net Income	—			—			12			—			12
Goodyear Net Income (Loss)	$	232		$	28		$	155		$	(183	)	$	232
Comprehensive Income (Loss)	$	186		$	30		$	32		$	(66	)	$	182
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			(4		)	—			(4		)
Goodyear Comprehensive Income (Loss)	$	186		$	30		$	36		$	(66	)	$	186

	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	2,837			557		3,634			(1,483		)	5,545
Selling, Administrative and General Expense	506			17		632			—			1,155
Rationalizations	2			—		54			—			56
Interest Expense	134			4		62			(24		)	176
Other (Income) Expense	(13		)	6		(15		)	46			24
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

	Condensed Consolidating Statement of Cash Flows
	Six Months Ended June 30, 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	$	457		$	(9	)	$	(336	)	$	(196	)	$	(84	)
Cash Flows from Investing Activities:
Capital Expenditures	(180		)	(41		)	(220		)	(1		)	(442		)
Asset Dispositions	—			2			—			—			2
Short Term Securities Acquired	—			—			(30		)	—			(30		)
Short Term Securities Redeemed	—			—			38			—			38
Capital Contributions and Loans Incurred	(306		)	—			(213		)	519			—
Capital Redemptions and Loans Paid	69			—			430			(499		)	—
Other Transactions	(38		)	—			—			—			(38		)
Total Cash Flows from Investing Activities	(455		)	(39		)	5			19			(470		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	575			—			437			—			1,012
Short Term Debt and Overdrafts Paid	(575		)	—			(345		)	—			(920		)
Long Term Debt Incurred	1,605			15			1,924			—			3,544
Long Term Debt Paid	(1,267		)	—			(1,666		)	—			(2,933		)
Common Stock Issued	3			—			—			—			3
Common Stock Repurchased	(100		)	—			—			—			(100		)
Common Stock Dividends Paid	(67		)	—			—			—			(67		)
Capital Contributions and Loans Incurred	213			52			254			(519		)	—
Capital Redemptions and Loans Paid	(430		)	—			(69		)	499			—
Intercompany Dividends Paid	—			—			(197		)	197			—
Transactions with Minority Interests in Subsidiaries	—			—			(26		)	—			(26		)
Debt Related Costs and Other Transactions	7			—			(1		)	—			6
Total Cash Flows from Financing Activities	(36		)	67			311			177			519
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			(2		)	(23		)	—			(25		)
Net Change in Cash, Cash Equivalents and Restricted Cash	(34		)	17			(43		)	—			(60		)
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	$	167		$	49		$	834		$	—		$	1,050

	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