Business Segments

12 Months Ended

Dec. 31, 2023

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, 2023, 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, and the reconciliation of segment operating income to Income (Loss) before Income Taxes:

(In millions)	2023			2022		2021
Sales
Americas	$	11,993		$	12,766	$	10,051
Europe, Middle East and Africa		5,606			5,645		5,243
Asia Pacific		2,467			2,394		2,184
Net Sales	$	20,066		$	20,805	$	17,478
Segment Operating Income
Americas	$	749		$	1,094	$	914
Europe, Middle East and Africa		17			61		239
Asia Pacific		202			121		135
Total Segment Operating Income	$	968		$	1,276	$	1,288
Less:
Goodwill impairment (Note 12)		230			—		—
Rationalizations (Note 4)		502			129		93
Interest expense (Note 5)		532			451		387
Other (income) expense (Note 6)		108			75		94
Asset write-offs and accelerated depreciation, net (Note 4)		36			37		1
Corporate incentive compensation plans		70			56		87
Retained expenses of divested operations		18			14		12
Other(1)		149			115		101
Income (Loss) before Income Taxes	$	(677	)	$	399	$	513

(1)Primarily represents unallocated corporate costs and the elimination of $27 million, $25 million and $22 million for the years ended December 31, 2023, 2022 and 2021, respectively, of royalty income attributable to the SBUs. Other in 2023 also includes $35 million of costs related to the Goodyear Forward plan, primarily related to third-party consulting fees.

The following table presents segment assets at December 31:

(In millions)	2023		2022
Assets
Americas	$	11,647	$	12,171
Europe, Middle East and Africa		4,873		5,239
Asia Pacific		2,767		2,913
Total Segment Assets		19,287		20,323
Corporate(1)		2,295		2,108
	$	21,582	$	22,431

(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)	2023		2022		2021
Net Sales
United States	$	9,807	$	10,734	$	8,480
Other international		10,259		10,071		8,998
	$	20,066	$	20,805	$	17,478
Long-Lived Assets
United States	$	3,891	$	3,804
China		713		743
Other international		3,888		3,747
	$	8,492	$	8,294

At December 31, 2023, significant concentrations of cash and cash equivalents held by our international subsidiaries included the following amounts:

•$297 million or 33% in EMEA, primarily France, England and Poland ($361 million or 29% at December 31, 2022),

•$244 million or 27% in Asia Pacific, primarily China, India and Australia ($301 million or 25% at December 31, 2022), and

•$237 million or 26% in Americas, primarily Brazil, Mexico and Argentina ($316 million or 26% at December 31, 2022).

Goodwill impairment, as described in Notes to the Consolidated Financial Statements No. 12, Goodwill and Intangible Assets; 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)	2023		2022		2021
Goodwill Impairment
Europe, Middle East and Africa		230		—		—
Total Segment Goodwill Impairment	$	230	$	—	$	—

(In millions)	2023		2022		2021
Rationalizations
Americas	$	19	$	32	$	38
Europe, Middle East and Africa		409		92		49
Asia Pacific		25		—		—
Total Segment Rationalizations	$	453	$	124	$	87
Corporate		49		5		6
	$	502	$	129	$	93

(In millions)	2023			2022			2021
Net Gains on Asset Sales
Americas	$	(104	)	$	(122	)	$	(1	)
Europe, Middle East and Africa		—			—			(13	)
Total Segment Gains on Asset Sales	$	(104	)	$	(122	)	$	(14	)
Corporate		—			—			(6	)
	$	(104	)	$	(122	)	$	(20	)

(In millions)	2023		2022		2021
Asset Write-Offs and Accelerated Depreciation, net
Americas	$	19	$	—	$	—
Europe, Middle East and Africa		17		20		1
Total Segment Asset Write-Offs and Accelerated Depreciation, net	$	36	$	20	$	1
Corporate		—		17		—
	$	36	$	37	$	1

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

(In millions)	2023		2022		2021
Capital Expenditures
Americas	$	638	$	611	$	537
Europe, Middle East and Africa		255		258		270
Asia Pacific		126		144		135
Total Segment Capital Expenditures	$	1,019	$	1,013	$	942
Corporate		31		48		39
	$	1,050	$	1,061	$	981

(In millions)	2023		2022		2021
Depreciation and Amortization
Americas	$	580	$	561	$	486
Europe, Middle East and Africa		239		208		213
Asia Pacific		141		144		146
Total Segment Depreciation and Amortization	$	960	$	913	$	845
Corporate		41		51		38
	$	1,001	$	964	$	883

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

(In millions)	2023			2022			2021
Equity in (Income) Loss
Americas	$	15		$	(14	)	$	(18	)
Europe, Middle East and Africa		(1	)		1			—
Asia Pacific		(16	)		(12	)		(4	)
Total Segment Equity in Income	$	(2	)	$	(25	)	$	(22	)

The decrease in total segment equity in income for 2023 compared to 2022 was driven by decreased profitability of our TireHub joint venture in Americas.