Consolidating Financial Information

3 Months Ended

Mar. 31, 2019

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, 2019
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	189	$	26		$	645	$	—		$	860
Accounts Receivable, net	721		123			1,602		—			2,446
Accounts Receivable From Affiliates	337		258			—		(595		)	—
Inventories	1,511		66			1,395		(32		)	2,940
Prepaid Expenses and Other Current Assets	74		2			164		6			246
Total Current Assets	2,832		475			3,806		(621		)	6,492
Goodwill	24		1			416		122			563
Intangible Assets	117		—			19		—			136
Deferred Income Taxes	1,452		27			382		3			1,864
Other Assets	515		50			595		—			1,160
Investments in Subsidiaries	3,776		436			—		(4,212		)	—
Operating Lease Right-of-Use Assets	568		14			280		—			862
Property, Plant and Equipment, net	2,459		429			4,333		(25		)	7,196
Total Assets	$	11,743	$	1,432		$	9,831	$	(4,733	)	$	18,273
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	909	$	118		$	1,710	$	—		$	2,737
Accounts Payable to Affiliates	—		—			595		(595		)	—
Compensation and Benefits	284		15			193		—			492
Other Current Liabilities	302		(6		)	398		—			694
Notes Payable and Overdrafts	55		—			440		—			495
Operating Lease Liabilities due Within One Year	110		4			89		—			203
Long Term Debt and Finance Leases due Within One Year	1		—			465		—			466
Total Current Liabilities	1,661		131			3,890		(595		)	5,087
Operating Lease Liabilities	466		10			191		—			667
Long Term Debt and Finance Leases	3,918		167			1,460		—			5,545
Compensation and Benefits	541		93			665		—			1,299
Deferred Income Taxes	—		—			94		—			94
Other Long Term Liabilities	349		8			193		—			550
Total Liabilities	6,935		409			6,493		(595		)	13,242
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	232		—			—		—			232
Other Equity	4,576		1,023			3,115		(4,138		)	4,576
Goodyear Shareholders’ Equity	4,808		1,023			3,115		(4,138		)	4,808
Minority Shareholders’ Equity — Nonredeemable	—		—			223		—			223
Total Shareholders’ Equity	4,808		1,023			3,338		(4,138		)	5,031
Total Liabilities and Shareholders’ Equity	$	11,743	$	1,432		$	9,831	$	(4,733	)	$	18,273

	Condensed Consolidating Balance Sheet
	December 31, 2018
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	127	$	30		$	644	$	—		$	801
Accounts Receivable, net	672		110			1,248		—			2,030
Accounts Receivable From Affiliates	294		280			—		(574		)	—
Inventories	1,425		71			1,387		(27		)	2,856
Prepaid Expenses and Other Current Assets	76		3			155		4			238
Total Current Assets	2,594		494			3,434		(597		)	5,925
Goodwill	24		1			420		124			569
Intangible Assets	117		—			19		—			136
Deferred Income Taxes	1,422		27			395		3			1,847
Other Assets	524		48			564		—			1,136
Investments in Subsidiaries	3,758		445			—		(4,203		)	—
Operating Lease Right-of-Use Assets	—		—			—		—			—
Property, Plant and Equipment, net	2,482		430			4,371		(24		)	7,259
Total Assets	$	10,921	$	1,445		$	9,203	$	(4,697	)	$	16,872
Liabilities:
Current Liabilities:
Accounts Payable-Trade	$	960	$	131		$	1,829	$	—		$	2,920
Accounts Payable to Affiliates	—		—			574		(574		)	—
Compensation and Benefits	286		14			171		—			471
Other Current Liabilities	310		(4		)	431		—			737
Notes Payable and Overdrafts	25		—			385		—			410
Operating Lease Liabilities due Within One Year	—		—			—		—			—
Long Term Debt and Finance Leases Due Within One Year	2		—			241		—			243
Total Current Liabilities	1,583		141			3,631		(574		)	4,781
Operating Lease Liabilities	—		—			—		—			—
Long Term Debt and Finance Leases	3,550		167			1,393		—			5,110
Compensation and Benefits	569		93			683		—			1,345
Deferred Income Taxes	—		—			95		—			95
Other Long Term Liabilities	355		8			108		—			471
Total Liabilities	6,057		409			5,910		(574		)	11,802
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	232		—			—		—			232
Other Equity	4,632		1,036			3,087		(4,123		)	4,632
Goodyear Shareholders’ Equity	4,864		1,036			3,087		(4,123		)	4,864
Minority Shareholders’ Equity — Nonredeemable	—		—			206		—			206
Total Shareholders’ Equity	4,864		1,036			3,293		(4,123		)	5,070
Total Liabilities and Shareholders’ Equity	$	10,921	$	1,445		$	9,203	$	(4,697	)	$	16,872

	Consolidating Statements of Operations
	Three Months Ended March 31, 2019
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,673		$	327		$	2,299		$	(701	)	$	3,598
Cost of Goods Sold	1,371			310			1,911			(713		)	2,879
Selling, Administrative and General Expense	253			8			286			—			547
Rationalizations	6			—			97			—			103
Interest Expense	55			6			33			(9		)	85
Other (Income) Expense	74			4			(81		)	25			22
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	(86		)	(1		)	53			(4		)	(38		)
United States and Foreign Taxes	(26		)	—			31			1			6
Equity in Earnings of Subsidiaries	(1		)	(15		)	—			16			—
Net Income (Loss)	(61		)	(16		)	22			11			(44		)
Less: Minority Shareholders’ Net Income	—			—			17			—			17
Goodyear Net Income (Loss)	$	(61	)	$	(16	)	$	5		$	11		$	(61	)
Comprehensive Income (Loss)	$	1		$	(14	)	$	57		$	(26	)	$	18
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			17			—			17
Goodyear Comprehensive Income (Loss)	$	1		$	(14	)	$	40		$	(26	)	$	1

	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

	Condensed Consolidating Statement of Cash Flows
	Three Months Ended March 31, 2019
(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	$	(75	)	$	(26	)	$	(253	)	$	(10	)	$	(364	)
Cash Flows from Investing Activities:
Capital Expenditures	(90		)	(11		)	(120		)	—			(221		)
Short Term Securities Acquired	—			—			(31		)	—			(31		)
Short Term Securities Redeemed	—			—			31			—			31
Capital Contributions and Loans Incurred	(196		)	—			—			196			—
Capital Redemptions and Loans Paid	104			—			—			(104		)	—
Notes Receivable	(7		)	—			—			—			(7		)
Other Transactions	—			—			(16		)	—			(16		)
Total Cash Flows from Investing Activities	(189		)	(11		)	(136		)	92			(244		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	299			—			272			—			571
Short Term Debt and Overdrafts Paid	(269		)	—			(216		)	—			(485		)
Long Term Debt Incurred	923			—			927			—			1,850
Long Term Debt Paid	(590		)	—			(633		)	—			(1,223		)
Common Stock Dividends Paid	(37		)	—			—			—			(37		)
Capital Contributions and Loans Incurred	—			34			162			(196		)	—
Capital Redemptions and Loans Paid	—			—			(104		)	104			—
Intercompany Dividends Paid	—			—			(10		)	10			—
Debt Related Costs and Other Transactions	(3		)	—			(28		)	—			(31		)
Total Cash Flows from Financing Activities	323			34			370			(82		)	645
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			(1		)	1			—			—
Net Change in Cash, Cash Equivalents and Restricted Cash	59			(4		)	(18		)	—			37
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period	168			30			675			—			873
Cash, Cash Equivalents and Restricted Cash at End of the Period	$	227		$	26		$	657		$	—		$	910

	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