Consolidating Financial Information

9 Months Ended

Sep. 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
	September 30, 2018
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	127	$	26		$	743	$	—		$	896
Accounts Receivable, net	732		166			1,772		—			2,670
Accounts Receivable From Affiliates	235		192			—		(427		)	—
Inventories	1,506		71			1,393		(32		)	2,938
Prepaid Expenses and Other Current Assets	78		2			165		4			249
Total Current Assets	2,678		457			4,073		(455		)	6,753
Goodwill	24		1			423		124			572
Intangible Assets	118		—			19		—			137
Deferred Income Taxes	1,487		30			388		3			1,908
Other Assets	554		51			484		—			1,089
Investments in Subsidiaries	3,943		516			—		(4,459		)	—
Property, Plant and Equipment, net	2,455		434			4,268		(25		)	7,132
Total Assets	$	11,259	$	1,489		$	9,655	$	(4,812	)	$	17,591
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	921	$	121		$	1,777	$	—		$	2,819
Accounts Payable to Affiliates	—		—			427		(427		)	—
Compensation and Benefits	278		16			223		—			517
Other Current Liabilities	359		(7		)	443		—			795
Notes Payable and Overdrafts	25		—			420		—			445
Long Term Debt and Capital Leases Due Within One Year	58		—			413		—			471
Total Current Liabilities	1,641		130			3,703		(427		)	5,047
Long Term Debt and Capital Leases	3,873		167			1,564		—			5,604
Compensation and Benefits	575		97			678		—			1,350
Deferred Income Taxes	—		—			95		—			95
Other Long Term Liabilities	370		9			116		—			495
Total Liabilities	6,459		403			6,156		(427		)	12,591
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	233		—			—		—			233
Other Equity	4,567		1,086			3,299		(4,385		)	4,567
Goodyear Shareholders’ Equity	4,800		1,086			3,299		(4,385		)	4,800
Minority Shareholders’ Equity — Nonredeemable	—		—			200		—			200
Total Shareholders’ Equity	4,800		1,086			3,499		(4,385		)	5,000
Total Liabilities and Shareholders’ Equity	$	11,259	$	1,489		$	9,655	$	(4,812	)	$	17,591

	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 September 30, 2018
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,922		$	342		$	2,373		$	(709	)	$	3,928
Cost of Goods Sold	1,547			319			1,879			(717		)	3,028
Selling, Administrative and General Expense	239			8			306			—			553
Rationalizations	1			—			4			—			5
Interest Expense	55			6			28			(7		)	82
Other (Income) Expense	(295		)	3			11			28			(253		)
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	375			6			145			(13		)	513
United States and Foreign Taxes	111			1			48			(1		)	159
Equity in Earnings of Subsidiaries	87			10			—			(97		)	—
Net Income (Loss)	351			15			97			(109		)	354
Less: Minority Shareholders’ Net Income	—			—			3			—			3
Goodyear Net Income (Loss)	$	351		$	15		$	94		$	(109	)	$	351
Comprehensive Income (Loss)	$	290		$	(5	)	$	(3	)	$	2		$	284
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			(6		)	—			(6		)
Goodyear Comprehensive Income (Loss)	$	290		$	(5	)	$	3		$	2		$	290

	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	1,393			261			2,021		(621		)	3,054
Selling, Administrative and General Expense	225			9			311		—			545
Rationalizations	20			—			26		—			46
Interest Expense	62			2			34		(14		)	84
Other (Income) Expense	(37		)	(5		)	9		63			30
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
	Nine Months Ended September 30, 2018
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	5,440		$	980		$	7,236		$	(2,057	)	$	11,599
Cost of Goods Sold	4,376			927			5,756			(2,106		)	8,953
Selling, Administrative and General Expense	756			26			950			—			1,732
Rationalizations	6			—			34			—			40
Interest Expense	165			16			73			(18		)	236
Other (Income) Expense	(271		)	13			19			68			(171		)
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	408			(2		)	404			(1		)	809
United States and Foreign Taxes	71			(1		)	140			1			211
Equity in Earnings of Subsidiaries	246			44			—			(290		)	—
Net Income (Loss)	583			43			264			(292		)	598
Less: Minority Shareholders’ Net Income	—			—			15			—			15
Goodyear Net Income (Loss)	$	583		$	43		$	249		$	(292	)	$	583
Comprehensive Income (Loss)	$	476		$	25		$	29		$	(64	)	$	466
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			(10		)	—			(10		)
Goodyear Comprehensive Income (Loss)	$	476		$	25		$	39		$	(64	)	$	476

	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	4,230			818		5,655			(2,104		)	8,599
Selling, Administrative and General Expense	731			26		943			—			1,700
Rationalizations	22			—		80			—			102
Interest Expense	196			6		96			(38		)	260
Other (Income) Expense	(50		)	1		(6		)	109			54
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

	Condensed Consolidating Statement of Cash Flows
	Nine Months Ended September 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	$	815		$	(5	)	$	(295	)	$	(539	)	$	(24	)
Cash Flows from Investing Activities:
Capital Expenditures	(248		)	(55		)	(311		)	(1		)	(615		)
Asset Dispositions	—			2			—			—			2
Short Term Securities Acquired	—			—			(61		)	—			(61		)
Short Term Securities Redeemed	—			—			61			—			61
Capital Contributions and Loans Incurred	(597		)	—			(213		)	810			—
Capital Redemptions and Loans Paid	193			—			430			(623		)	—
Notes Receivable	(50		)	—			—			—			(50		)
Other Transactions	3			—			(4		)	—			(1		)
Total Cash Flows from Investing Activities	(699		)	(53		)	(98		)	186			(664		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	800			—			658			—			1,458
Short Term Debt and Overdrafts Paid	(775		)	—			(492		)	—			(1,267		)
Long Term Debt Incurred	2,305			15			2,384			—			4,704
Long Term Debt Paid	(1,982		)	—			(2,010		)	—			(3,992		)
Common Stock Issued	4			—			—			—			4
Common Stock Repurchased	(200		)	—			—			—			(200		)
Common Stock Dividends Paid	(100		)	—			—			—			(100		)
Capital Contributions and Loans Incurred	213			52			545			(810		)	—
Capital Redemptions and Loans Paid	(430		)	(14		)	(179		)	623			—
Intercompany Dividends Paid	—			—			(540		)	540			—
Transactions with Minority Interests in Subsidiaries	—			—			(27		)	—			(27		)
Debt Related Costs and Other Transactions	16			—			(19		)	—			(3		)
Total Cash Flows from Financing Activities	(149		)	53			320			353			577
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			(1		)	(36		)	—			(37		)
Net Change in Cash, Cash Equivalents and Restricted Cash	(33		)	(6		)	(109		)	—			(148		)
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	$	168		$	26		$	768		$	—		$	962

	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