Business Segments

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Business Segments

Note 9. Business Segments

Segment information reflects our strategic business units (“SBUs”), which are organized to meet customer requirements and global competition. For the year ended December 31, 2022, we operated our business through three operating segments representing our regional tire businesses: Americas; Europe, Middle East and Africa; and Asia Pacific. Segment information is reported on the basis used for reporting to our Chief Executive Officer. Each of the three regional business segments is involved in the development, manufacture, distribution and sale of tires. Certain of the business segments also provide related products and services, which include retreads and automotive and commercial truck maintenance and repair services. Each segment also exports tires to other segments. Since the Closing Date, Cooper Tire's operating results have been incorporated into each of our SBUs.

Americas manufactures and sells tires for automobiles, trucks, buses, earthmoving, mining and industrial equipment, aircraft, and for various other applications throughout North, Central and South America. Americas also provides related products and services including retreaded tires, tread rubber, and automotive and commercial truck maintenance and repair services, as well as sells chemical and natural rubber products to our other business segments and to unaffiliated customers.

EMEA manufactures and sells tires for automobiles, trucks, buses, aircraft, motorcycles, and earthmoving, mining and industrial equipment throughout Europe, the Middle East and Africa. EMEA also sells retreaded aviation tires, retreading and related services for commercial truck and earthmoving, mining and industrial equipment, and automotive maintenance and repair services.

Asia Pacific manufactures and sells tires for automobiles, trucks, buses, aircraft, farm, and earthmoving, mining and industrial equipment throughout the Asia Pacific region. Asia Pacific also provides related products and services including retreaded truck and aviation tires, tread rubber, and automotive maintenance and repair services.

The following table presents segment sales and operating income (loss), and the reconciliation of segment operating income (loss) to Income (Loss) before Income Taxes:

(In millions)	2022		2021		2020
Sales
Americas	$	12,766	$	10,051	$	6,556
Europe, Middle East and Africa		5,645		5,243		4,020
Asia Pacific		2,394		2,184		1,745
Net Sales	$	20,805	$	17,478	$	12,321
Segment Operating Income (Loss)
Americas	$	1,094	$	914	$	9
Europe, Middle East and Africa		61		239		(72	)
Asia Pacific		121		135		49
Total Segment Operating Income (Loss)	$	1,276	$	1,288	$	(14	)
Less:
Goodwill and Other Asset Impairments (Notes 12 and 13)		—		—		330
Rationalizations (Note 4)		129		93		159
Interest expense (Note 5)		451		387		324
Other (income) expense (Note 6)		75		94		119
Asset write-offs and accelerated depreciation (Note 4)		37		1		105
Corporate incentive compensation plans		56		87		44
Retained expenses of divested operations		14		12		8
Other(1)		115		101		37
Income (Loss) before Income Taxes	$	399	$	513	$	(1,140	)

(1)Primarily represents unallocated corporate costs and the elimination of $25 million, $22 million and $17 million for the years ended December 31, 2022, 2021 and 2020, respectively, of royalty income attributable to the SBUs. Increases in 2021 and 2022 were driven by the acquisition of Cooper Tire.

The following table presents segment assets at December 31:

(In millions)	2022		2021
Assets
Americas	$	12,171	$	10,874
Europe, Middle East and Africa		5,239		4,953
Asia Pacific		2,913		3,125
Total Segment Assets		20,323		18,952
Corporate(1)		2,108		2,450
	$	22,431	$	21,402

(1)Corporate includes substantially all of our U.S. net deferred tax assets.

Results of operations are measured based on net sales to unaffiliated customers and segment operating income. Each segment exports tires to other segments. The financial results of each segment exclude sales of tires exported to other segments, but include operating income derived from such transactions. Segment operating income is computed as follows: Net sales less CGS (excluding asset write-offs and accelerated depreciation charges) and SAG (including certain allocated corporate administrative expenses). Segment operating income also includes certain royalties and equity in earnings of most affiliates. Segment operating income does not include net rationalization charges, asset sales, goodwill and other asset impairment charges and certain other items.

The following table presents geographic information. Net sales by country were determined based on the location of the selling subsidiary. Long-lived assets consist of property, plant and equipment. Management did not consider the net sales of any individual country outside the United States to be significant to the consolidated financial statements. For long-lived assets, only the United States and China were considered to be significant.

(In millions)	2022		2021		2020
Net Sales
United States	$	10,734	$	8,480	$	5,424
Other international		10,071		8,998		6,897
	$	20,805	$	17,478	$	12,321
Long-Lived Assets
United States	$	3,804	$	3,717
China		743		833
Other international		3,747		3,795
	$	8,294	$	8,345

At December 31, 2022, significant concentrations of cash and cash equivalents held by our international subsidiaries included the following amounts:

•$361 million or 29% in EMEA, primarily France, Belgium and England ($161 million or 15% at December 31, 2021),

•$316 million or 26% in Americas, primarily Chile, Brazil and Mexico ($320 million or 29% at December 31, 2021), and

•$301 million or 25% in Asia Pacific, primarily China, India and Australia ($317 million or 29% at December 31, 2021).

Goodwill and other asset impairments, as described in Notes to the Consolidated Financial Statements No. 12, Goodwill and Intangible Assets, and No. 13, Other Assets and Investments; rationalizations, as described in Note to the Consolidated Financial Statements No. 4, Costs Associated with Rationalization Programs; net (gains) losses on asset sales, as described in Note to the Consolidated Financial Statements No. 6, Other (Income) Expense; and asset write-offs and accelerated depreciation were not charged (credited) to the SBUs for performance evaluation purposes but were attributable to the SBUs as follows:

(In millions)	2022		2021		2020
Goodwill and Other Asset Impairments
Americas	$	—	$	—	$	148
Europe, Middle East and Africa		—		—		182
Total Segment Goodwill and Other Asset Impairments	$	—	$	—	$	330

(In millions)	2022		2021		2020
Rationalizations
Americas	$	32	$	38	$	94
Europe, Middle East and Africa		92		49		59
Asia Pacific		—		—		4
Total Segment Rationalizations	$	124	$	87	$	157
Corporate		5		6		2
	$	129	$	93	$	159

(In millions)	2022			2021			2020
Net (Gains) Losses on Asset Sales
Americas	$	(122	)	$	(1	)	$	—
Europe, Middle East and Africa		—			(13	)		2
Total Segment (Gains) Losses on Asset Sales	$	(122	)	$	(14	)	$	2
Corporate		—			(6	)		—
	$	(122	)	$	(20	)	$	2

(In millions)	2022		2021		2020
Asset Write-Offs and Accelerated Depreciation
Americas	$	—	$	—	$	103
Europe, Middle East and Africa		20		1		2
Total Segment Asset Write-Offs and Accelerated Depreciation	$	20	$	1	$	105
Corporate		17		—		—
	$	37	$	1	$	105

The following tables present segment capital expenditures and depreciation and amortization:

(In millions)	2022		2021		2020
Capital Expenditures
Americas	$	611	$	537	$	302
Europe, Middle East and Africa		258		270		235
Asia Pacific		144		135		91
Total Segment Capital Expenditures	$	1,013	$	942	$	628
Corporate		48		39		19
	$	1,061	$	981	$	647

(In millions)	2022		2021		2020
Depreciation and Amortization
Americas	$	561	$	486	$	490
Europe, Middle East and Africa		208		213		201
Asia Pacific		144		146		133
Total Segment Depreciation and Amortization	$	913	$	845	$	824
Corporate		51		38		35
	$	964	$	883	$	859

The following table presents segment equity in the net (income) loss of investees accounted for by the equity method:

(In millions)	2022			2021			2020
Equity in (Income) Loss
Americas	$	(14	)	$	(18	)	$	31
Europe, Middle East and Africa		1			—			—
Asia Pacific		(12	)		(4	)		—
Total Segment Equity in (Income) Loss	$	(25	)	$	(22	)	$	31

Increases in total segment equity in (income) loss for 2022 and 2021 were driven by improved profitability of our TireHub joint venture in Americas and the addition of our ACTR joint venture in Asia Pacific as a result of the acquisition of Cooper Tire.