Consolidating Financial Information

6 Months Ended

Jun. 30, 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
	June 30, 2019
(In millions)	Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Entries and Eliminations			Consolidated
Assets:
Current Assets:
Cash and Cash Equivalents	$	242	$	42		$	633	$	—		$	917
Accounts Receivable, net	797		137			1,539		—			2,473
Accounts Receivable From Affiliates	305		228			—		(533		)	—
Inventories	1,555		68			1,506		(38		)	3,091
Prepaid Expenses and Other Current Assets	88		3			205		4			300
Total Current Assets	2,987		478			3,883		(567		)	6,781
Goodwill	24		1			421		124			570
Intangible Assets	116		—			19		—			135
Deferred Income Taxes	1,456		25			379		5			1,865
Other Assets	502		50			519		—			1,071
Investments in Subsidiaries	3,759		433			—		(4,192		)	—
Operating Lease Right-of-Use Assets	561		14			279		—			854
Property, Plant and Equipment, net	2,435		431			4,350		(22		)	7,194
Total Assets	$	11,840	$	1,432		$	9,850	$	(4,652	)	$	18,470
Liabilities:
Current Liabilities:
Accounts Payable — Trade	$	904	$	121		$	1,725	$	—		$	2,750
Accounts Payable to Affiliates	—		—			533		(533		)	—
Compensation and Benefits	275		15			217		—			507
Other Current Liabilities	299		(5		)	359		—			653
Notes Payable and Overdrafts	24		—			456		—			480
Operating Lease Liabilities due Within One Year	109		4			87		—			200
Long Term Debt and Finance Leases due Within One Year	3		—			488		—			491
Total Current Liabilities	1,614		135			3,865		(533		)	5,081
Operating Lease Liabilities	461		9			194		—			664
Long Term Debt and Finance Leases	4,070		167			1,529		—			5,766
Compensation and Benefits	511		92			674		—			1,277
Deferred Income Taxes	—		—			94		—			94
Other Long Term Liabilities	337		8			194		—			539
Total Liabilities	6,993		411			6,550		(533		)	13,421
Commitments and Contingent Liabilities
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock	233		—			—		—			233
Other Equity	4,614		1,021			3,098		(4,119		)	4,614
Goodyear Shareholders’ Equity	4,847		1,021			3,098		(4,119		)	4,847
Minority Shareholders’ Equity — Nonredeemable	—		—			202		—			202
Total Shareholders’ Equity	4,847		1,021			3,300		(4,119		)	5,049
Total Liabilities and Shareholders’ Equity	$	11,840	$	1,432		$	9,850	$	(4,652	)	$	18,470

	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 June 30, 2019
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	1,793		$	335		$	2,263		$	(759	)	$	3,632
Cost of Goods Sold	1,437			316			1,865			(763		)	2,855
Selling, Administrative and General Expense	267			9			310			—			586
Rationalizations	3			—			1			—			4
Interest Expense	57			7			33			(9		)	88
Other (Income) Expense	(6		)	3			1			19			17
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	35			—			53			(6		)	82
United States and Foreign Taxes	(6		)	—			35			(3		)	26
Equity in Earnings of Subsidiaries	13			3			—			(16		)	—
Net Income (Loss)	54			3			18			(19		)	56
Less: Minority Shareholders’ Net Income	—			—			2			—			2
Goodyear Net Income (Loss)	$	54		$	3		$	16		$	(19	)	$	54
Comprehensive Income (Loss)	$	66		$	(3	)	$	(2	)	$	10		$	71
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			5			—			5
Goodyear Comprehensive Income (Loss)	$	66		$	(3	)	$	(7	)	$	10		$	66

	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
	Six Months Ended June 30, 2019
(In millions)	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Entries and Eliminations			Consolidated
Net Sales	$	3,466		$	662		$	4,562		$	(1,460	)	$	7,230
Cost of Goods Sold	2,808			626			3,776			(1,476		)	5,734
Selling, Administrative and General Expense	520			17			596			—			1,133
Rationalizations	9			—			98			—			107
Interest Expense	112			13			66			(18		)	173
Other (Income) Expense	68			7			(80		)	44			39
Income (Loss) before Income Taxes and Equity in Earnings of Subsidiaries	(51		)	(1		)	106			(10		)	44
United States and Foreign Taxes	(32		)	—			66			(2		)	32
Equity in Earnings of Subsidiaries	12			(12		)	—			—			—
Net Income (Loss)	(7		)	(13		)	40			(8		)	12
Less: Minority Shareholders’ Net Income	—			—			19			—			19
Goodyear Net Income (Loss)	$	(7	)	$	(13	)	$	21		$	(8	)	$	(7	)
Comprehensive Income (Loss)	$	67		$	(17	)	$	55		$	(16	)	$	89
Less: Comprehensive Income (Loss) Attributable to Minority Shareholders	—			—			22			—			22
Goodyear Comprehensive Income (Loss)	$	67		$	(17	)	$	33		$	(16	)	$	67

	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

	Condensed Consolidating Statement of Cash Flows
	Six Months Ended June 30, 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	$	(77	)	$	(19	)	$	(174	)	$	(21	)	$	(291	)
Cash Flows from Investing Activities:
Capital Expenditures	(153		)	(20		)	(228		)	—			(401		)
Asset Dispositions	—			—			2			—			2
Short Term Securities Acquired	—			—			(67		)	—			(67		)
Short Term Securities Redeemed	—			—			67			—			67
Capital Contributions and Loans Incurred	(223		)	—			—			223			—
Capital Redemptions and Loans Paid	169			—			—			(169		)	—
Notes Receivable	(7		)	—			—			—			(7		)
Other Transactions	—			—			(13		)	—			(13		)
Total Cash Flows from Investing Activities	(214		)	(20		)	(239		)	54			(419		)
Cash Flows from Financing Activities:
Short Term Debt and Overdrafts Incurred	355			—			628			—			983
Short Term Debt and Overdrafts Paid	(355		)	—			(553		)	—			(908		)
Long Term Debt Incurred	1,781			—			1,698			—			3,479
Long Term Debt Paid	(1,302		)	—			(1,326		)	—			(2,628		)
Common Stock Issued	1			—			—			—			1
Common Stock Repurchased	—			—			—			—			—
Common Stock Dividends Paid	(74		)	—			—			—			(74		)
Capital Contributions and Loans Incurred	—			49			174			(223		)	—
Capital Redemptions and Loans Paid	—			—			(169		)	169			—
Intercompany Dividends Paid	—			—			(21		)	21			—
Transactions with Minority Interests in Subsidiaries	—			—			(25		)	—			(25		)
Debt Related Costs and Other Transactions	1			—			(18		)	—			(17		)
Total Cash Flows from Financing Activities	407			49			388			(33		)	811
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	—			2			4			—			6
Net Change in Cash, Cash Equivalents and Restricted Cash	116			12			(21		)	—			107
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	$	284		$	42		$	654		$	—		$	980

	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		)	—
Notes Receivable	—			—			—			—			—
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