GOODYEAR TIRE RUBBER CO OH
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
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FY2024 · Filed Feb 14, 2025
GT$4.36-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-13.
0000950170-24-014240
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-14.
0000950170-25-020763
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 280 previous paragraphs and 280 current paragraphs.
152 unchanged; 100 reworded; 26 added; 28 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Goodyear Forward
Current report
On January 7, 2025, we entered into the Dunlop Purchase Agreement with SRI relating to the sale of the Dunlop brand in Europe, North America and Oceania for consumer, commercial and other specialty tires, together with certain associated intellectual property and other intangible assets, for a purchase price of $526 million. SRI will also pay us an up-front transition support fee of $105 million for our support in transitioning the Dunlop brand, related intellectual property and Dunlop customers to SRI. SRI will also acquire our existing Dunlop tire inventory. The Dunlop Purchase Agreement also contemplates entering into a number of ancillary agreements, including (a) a transition license agreement, pursuant to which we will continue to manufacture, sell and distribute Dunlop-branded consumer tires in Europe for an initial period from the closing of the transaction until December 31, 2025, which may be extended to December 31, 2026, and during which we will pay SRI a royalty on such Dunlop sales but will otherwise retain all profits therefrom; (b) a transition offtake agreement, pursuant to which we will sell to SRI certain Dunlop-branded consumer tire products for a period of up to five years, commencing after termination or expiration of the transition license agreement, subject to the terms and conditions set forth therein; and (c) we will license back the Dunlop brand from SRI for commercial tires in Europe on a long-term basis, subject to a royalty on sales. The transaction is subject to customary closing conditions, including the receipt of required regulatory approvals.
Current report
On February 3, 2025, we completed the sale of our OTR tire business to Yokohama pursuant to the terms of the OTR Purchase Agreement. Pursuant to the OTR Purchase Agreement, Yokohama acquired the Company’s OTR business for a purchase price of $905 million in cash, subject to certain adjustments set forth in the OTR Purchase Agreement. In conjunction with the sale of the OTR business, we entered into several ancillary agreements, including a product supply agreement, pursuant to which we will supply to Yokohama certain OTR tires for an initial period of up to 5 years, subject to the terms and conditions set forth therein, including an exit and asset relocation plan to be mutually agreed upon by the parties pursuant to which, beginning no earlier than the 2nd anniversary of closing of the transaction, the production of those OTR tires will transition to Yokohama’s facilities.
Current report
Our total segment operating income for 2024 was $1,318 million, compared to $968 million in 2023. The $350 million increase was primarily due to benefits from the Goodyear Forward plan of $480 million, lower raw material costs of $289 million, a benefit of $92 million from insurance proceeds for business interruptions and property damage resulting from storm damage events in prior years, $55 million related to the 2023 negative impact of the Tupelo storm, a benefit from insurance recoveries of $50 million related to a fire in the third quarter of 2023 that significantly damaged and caused a temporary shutdown of our tire manufacturing facility in Debica, Poland ("Debica"), partially offset by the continued impact of the fire on Debica fixed costs incurred during ramp-up of $20 million, lower transportation costs of $35 million, a favorable tax item in Brazil of $8 million and a decrease in SAG of $28 million. These decreases were partially offset by increased conversion costs of $318 million, driven by inflation, declines in price and product mix of $203 million, primarily in Americas and EMEA and lower tire volume of $185 million, primarily in Americas and EMEA. Refer to "Results of Operations — Segment Information" for additional information.
Current report
In the first quarter of 2025, we expect our unit volume will decline, driven by relatively high third-party channel inventories related to pre-buy of low-end imported consumer replacement products in the U.S. and lower consumer and commercial OE production globally. We expect our global tire unit volume in the first quarter of 2025 to be lower compared to the first quarter of 2024 by approximately 2% to 3%. We also expect unabsorbed overhead to be approximately $25 million higher in the first quarter of 2025 compared to the first quarter of 2024 due to lower production in the fourth quarter of 2024.
Current report
As we continue to make progress on our Goodyear Forward transformation plan, we expect first quarter benefits from the program of approximately $200 million and full year benefits of approximately $750 million in segment operating income in 2025. The expected impact of the sale of the OTR tire business on our segment operating income, inclusive of stranded costs, is approximately $20 million and $80 million for the first quarter and full year of 2025, respectively.
Current report
Cost of Goods Sold ("CGS") was $15,176 million in 2024, decreasing $1,381 million, or 8.3%, from $16,557 million in 2023. CGS was 80.4% of sales in 2024 compared to 82.5% of sales in 2023. CGS in 2024 decreased primarily due to lower tire volume of $715 million, savings related to the Goodyear Forward plan of $335 million, lower raw material costs of $289 million, foreign currency translation of $154 million, driven by the strengthening of the U.S. dollar, lower costs related to product mix of $146 million globally, a benefit of $92 million ($69 million after-tax and minority) from insurance proceeds for property damage and business interruptions resulting from storm damage events in Americas in prior years, a benefit of $26 million ($17 million after-tax and minority) from insurance recoveries related to the fire at our Debica, Poland tire manufacturing facility, net of fixed costs incurred during the ramp-up of the facility, and a favorable $8 million ($6 million after-tax and minority) tax item in Brazil. These decreases were partially offset by higher conversion costs of $318 million, driven by inflation and the effect of lower tire production on fixed cost absorption, an increase in accelerated depreciation and asset write-offs of $70 million, primarily related to the announced plant closures in Asia Pacific and EMEA, higher costs in other tire-related business of $64 million, driven by Fleet Solutions in EMEA and higher third-party chemical sales in Americas, and a $3 million ($3 million after-tax and minority) charge related to a flood in South Africa.
Current report
CGS and SAG in 2024 included $146 million ($126 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily related to plant closures in Asia Pacific and EMEA, closure of a development center in the U.S. and the exit of our retail operations in Australia and New Zealand.
Current report
We recorded net rationalization charges of $86 million ($72 million after-tax and minority) in 2024. Net rationalization charges include $52 million related to the proposed plan to close our tire manufacturing facilities in Fulda and Fürstenwalde, Germany, $15 million related to the workforce reorganization plan in EMEA, $15 million related to the opening of a shared service center in Costa Rica, the exit of certain Commercial Tire and Service Center locations and global SAG, $12 million related to the closure of our tire manufacturing facility in Malaysia, $11 million related to the closure of our tire manufacturing facility in Melksham, United Kingdom, $4 million related to the closure of certain retail and warehouse locations in Americas, $3 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility, $3 million related to the global rationalization and workforce reorganization plan and $3 million related to the plan to streamline our EMEA distribution network. These charges were partially offset by reversals of $45 million, primarily related to voluntary attrition in our workforce reorganization plan in EMEA.
Current report
Goodwill and Intangible Asset Impairment
Current report
Interest expense was $522 million in 2024, decreasing $10 million from $532 million in 2023. The decrease was primarily due to an increase in capitalized interest of $9 million.
Current report
For further information, refer to Note to the Consolidated Financial Statements No. 5, Other (Income) Expense.
Current report
The Organisation for Economic Co-operation and Development ("OECD") have published the Pillar Two model rules which adopt a global corporate minimum tax of 15% for multinational enterprises with average revenue in excess of €750 million. Certain jurisdictions in which we operate enacted legislation consistent with one or more of the OECD Pillar Two model rules effective in 2024. The model rules include minimum domestic top-up taxes, income inclusion rules and undertaxed profit rules, all aimed to ensure that multinational corporations pay a minimum effective corporate tax rate of 15% in each jurisdiction in which they operate. The Pillar Two model rules did not materially impact our annual effective tax rate in 2024. However, we are continuing to evaluate the Pillar Two model rules and related legislation and their potential impact on future periods.
Current report
Minority Shareholders’ Net Income (Loss)
Current report
Net sales in 2024 were $11,033 million, decreasing $960 million, or 8.0%, from $11,993 million in 2023. The decrease in net sales was primarily due to lower tire volume of $821 million and unfavorable price and product mix of $303 million. These decreases were partially offset by $110 million of sales lost during 2023 due to the Tupelo storm, increased sales in other tire-related businesses of $64 million, primarily due to retail and chemical, and a $52 million benefit related to the Goodyear Forward plan.
Current report
Operating income in 2024 was $933 million, increasing $184 million, or 24.6%, from $749 million in 2023. The increase in operating income was due to a $315 million benefit related to the Goodyear Forward plan, lower raw material costs of $174 million, a benefit of $92 million from insurance proceeds for business interruptions and property damage resulting from storm damage events in prior years, lower transportation and imported tire costs of $85 million, $55 million related to the 2023 negative impact of the Tupelo storm, lower SAG of $39 million, and increased earnings in other tire-related businesses of $38 million, primarily due to retail and chemical. These increases were partially offset by unfavorable price and product mix of $259 million, higher conversion costs of $179 million, driven by inflation and the effect of lower tire production on fixed cost absorption, and lower tire volume of $172 million. Operating income for 2024 includes incremental savings from rationalization plans of $42 million.
Current report
Operating income in 2024 was $108 million, increasing $91 million, or 535.3%, from $17 million in 2023. The increase in operating income was primarily due to lower raw material costs of $132 million and benefits related to the Goodyear Forward plan of $121 million. These improvements were partially offset by higher conversion costs of $147 million, driven by the effect of decreased tire production on fixed cost absorption and inflation, and lower tire volume of $15 million. Operating income in 2024 includes incremental SAG and CGS savings from rationalization plans of $10 million and $8 million, respectively.
Current report
Asia Pacific unit sales were flat in 2024. OE tire volume increased 2.1 million units, or 13.2%, primarily due to an increase in consumer EV fitments in China. Replacement tire volume decreased 2.1 million units, or 10.4%, due to the impact of the Australia transformation and softness in consumer replacement in most of our markets.
Current report
Net sales in 2024 were $2,420 million, decreasing $47 million, or 1.9%, from $2,467 million in 2023. The decrease in net sales was primarily driven by the negative impact of changes in foreign exchange rates of $30 million due to the strengthening of the U.S. dollar and unfavorable price and product mix of $27 million driven by the Australia transformation, partially offset by higher sales in other tire-related businesses of $3 million.
Current report
Operating income in 2024 was $277 million, increasing $75 million, or 37.1%, from $202 million in 2023. The increase in operating income was primarily due to favorable price and product mix of $51 million and a benefit related to the Goodyear Forward plan of $44 million. These increases were partially offset by higher raw material costs of $17 million and unfavorable foreign currency translation of $4 million.
Current report
On July 22, 2024, we entered into a commitment letter (the “Commitment Letter”) to provide us a 364-day senior unsecured committed credit facility in an aggregate principal amount not to exceed $500 million (the “Committed Credit Facility”). If drawn, borrowings under the Committed Credit Facility would be required to be used solely to redeem our remaining outstanding 9.5% Senior Notes due 2025 (the “9.5% Notes”). On February 3, 2025, following the closing of the sale of our OTR tire business to Yokohama, the commitments under the Commitment Letter for the Committed Credit Facility were reduced to zero and the Commitment Letter was terminated in accordance with its terms. On February 4, 2025, we called for redemption in full of the 9.5% Notes on February 19, 2025 (the “Redemption Date”) at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest to the Redemption Date.
Current report
During the third quarter of 2024, we experienced a decline in our market capitalization as a result of a decrease in our stock price. Our stock price has a history of volatility, however, given the decrease was sustained throughout the quarter, we viewed this event as a triggering event and performed a quantitative analysis of the fair value of the North America reporting unit in our Americas segment as of September 30, 2024 which resulted in an estimated fair value that exceeded its carrying value, including goodwill.
Current report
The following table highlights the sensitivities of the North America reporting unit's goodwill as of October 31, 2024:
Current report
In the third quarter of 2024, we experienced a decline in volumes primarily in our lower tier indefinite-lived intangible assets related to the acquisition of Cooper Tire as a result of increased competition from lower tier imports in the market. We viewed this event as a triggering event and performed a quantitative analysis of the fair value of our indefinite-lived intangible assets related to the acquisition of Cooper Tire as of September 30, 2024. Based on the results of the quantitative impairment assessments, the fair value of the intangible assets was less than the carrying value, resulting in a non-cash impairment charge of $125 million during the third quarter of 2024.
Current report
For further information on goodwill and intangible assets, refer to Note to the Consolidated Financial Statements No. 11, Goodwill and Intangible Assets.
Current report
we may not be able to consummate the sale of the Dunlop brand on a timely basis or at all, including failure to obtain the required regulatory approvals or to satisfy other conditions to closing;
Removed paragraphs (28)
Previous report
As part of the Goodyear Forward transformation plan, on November 15, 2023, we approved a rationalization plan in EMEA to permanently close our Fulda, Germany tire manufacturing facility (“Fulda”) and our Fürstenwalde, Germany tire manufacturing facility (“Fürstenwalde”). This plan amends and replaces the plan that was previously approved on May 31, 2023 to permanently reduce production at Fulda by approximately 50%. The proposed actions would lead to a reduction of approximately 1,750 positions at Fulda and Fürstenwalde. We expect the closure of Fulda will be substantially complete in 2025 and the closure of Fürstenwalde will be substantially complete by the end of 2027. Relevant portions of the plan remain subject to consultation with employee representative bodies.
Previous report
Additionally, as part of our transformation efforts, on September 5, 2023, we approved a rationalization and workforce reorganization plan in EMEA to improve our cost structure. The proposed actions would lead to a reduction of approximately 1,200 positions across multiple countries within EMEA while also creating approximately 500 new roles principally in our existing shared services organization in Romania, resulting in an overall net reduction of approximately 700 positions. In certain countries, relevant portions of the plan remain subject to consultation with employee representative bodies. We expect these actions will be substantially complete in 2025.
Previous report
We anticipate the closure of Fulda and Fürstenwalde and the rationalization and workforce reorganization plan will improve EMEA’s segment operating income by achieving annual run rate savings of approximately $160 million by the end of 2025 and a full run rate savings of approximately $220 million by the end of 2027.
Previous report
During 2023, our operating results reflected the impact of the ongoing effects of inflation and increases in interest rates on the global economy. While global tire industry demand remains below 2019, the weakness in the replacement market we experienced during the first half of 2023 improved during the second half of the year. Industry volumes grew in several of our markets, including the U.S., where industry volume increased during the second half of the year. We saw continued improvement in demand from our OE customers throughout 2023, including growth in China. These trends can be seen in our operating results as operating margins improved for each of our segments during the second half of 2023, exceeding the margins achieved during the second half of 2022.
Previous report
The inflationary cost pressures we experienced in the first half of 2023 eased in the second half as decreases in raw material and transportation costs offset inflation. However, cost pressures remain on wages and benefits as we continue to experience increased labor-related costs and manufacturing inefficiencies associated with the ongoing tight labor supply, particularly in the U.S. Additionally, energy costs remain elevated in EMEA, driven by the indirect impacts of the war in Ukraine.
Previous report
During the second quarter of 2023, a severe storm in the U.S. significantly damaged and caused the temporary shut-down of our tire manufacturing facility and adjacent warehouse in Tupelo, Mississippi. The damage to Tupelo was significant; however, we were able to restart production earlier than expected and returned to full production in the beginning of the third quarter. We estimate the negative impact of the Tupelo storm on sales in Americas for 2023 was $110 million. We estimate that the negative impact on our earnings for 2023 was $69 million ($56 million after-tax and minority). The negative impact on our earnings for 2023 included $55 million in Americas segment operating income and $14 million of corporate expense for an insurance deductible.
Previous report
During the third quarter of 2023, a fire significantly damaged a portion of the tire curing area and caused the temporary shutdown of our tire manufacturing facility in Debica, Poland (“Debica”). Tire production at Debica resumed in August at approximately 55% of capacity and is currently at approximately 70% of capacity. We estimate the negative impact on our earnings during 2023 was approximately $28 million ($24 million after-tax and minority), including $10 million of corporate expense for an insurance deductible and an $18 million impact on EMEA’s segment operating income, primarily comprised of fixed costs incurred during the plant shutdown and subsequent ramp-up. There was no significant impact from lost sales during 2023 as a result of leveraging existing inventory and increasing production at other facilities.
Previous report
We maintain third-party insurance coverage for property damage, repair expenses and business interruption, subject to a $15 million deductible for each of the events at Tupelo and Debica. While we expect to be reimbursed for a significant portion of our business interruption impacts for Tupelo and Debica by our third-party insurance coverage, consistent with past practice, we will record a receivable related to the business interruption once the claim is substantially complete.
Previous report
During 2023, in order to address softening industry demand and prevent the buildup of excess inventory, we reduced production at many of our tire manufacturing facilities, resulting in a reduction of 14.2 million units compared to production in 2022, primarily in Americas and EMEA. Decisions to change production levels in the future will be based on an evaluation of market demand signals and inventory and supply levels, as well as the availability of sufficient qualified labor.
Previous report
Our total segment operating income for 2023 was $968 million, compared to $1,276 million in 2022. The $308 million decrease was primarily due to increased conversion costs of $599 million driven by the effect of decreased tire production on fixed cost absorption, inflation and higher energy costs, lower tire volume of $250 million, primarily in Americas and EMEA, a $55 million negative impact due to the Tupelo storm, an increase in SAG of $30 million, unfavorable foreign currency translation of $23 million driven by the strengthening of the U.S. dollar, and an $18 million negative impact due to the Debica fire. These decreases were partially offset by global improvements in price and product mix of $579 million, lower raw material costs of $67 million, and lower research and development costs of $25 million. Refer to "Results of Operations — Segment Information" for additional information.
Previous report
In November 2023, we announced a transformation plan, Goodyear Forward, to optimize our portfolio, deliver significant margin expansion and reduce leverage to drive substantial shareholder value creation. During 2023, we began laying the foundation to drive the execution of that plan. We expect this plan to benefit segment operating income by approximately $350 million in 2024.
Previous report
In the first quarter of 2024, we expect our tire volume will be down slightly, driven by consumer and commercial replacement in Americas and EMEA. This volume decrease will be partially offset by growth in Asia Pacific replacement and OE volume, driven by the continued benefits of new OE fitment wins.
Previous report
Additionally, we expect cost pressures to persist in the first quarter of 2024. We expect the negative impact on segment operating income from non-raw material inflation and other costs will be approximately $25 million compared with the first quarter of 2023. Separate from the impact of inflation on our first quarter 2024 results, we expect savings of approximately $50 million from initiatives underway as part of our Goodyear Forward plan. We also expect the lower production levels in the fourth quarter of 2023 as a result of the fire in Debica will negatively impact our EMEA segment operating results by approximately $15 million in the first quarter of 2024.
Previous report
Cost of Goods Sold ("CGS") was $16,557 million in 2023, decreasing $396 million, or 2.3%, from $16,953 million in 2022. CGS was 82.5% of sales in 2023 compared to 81.5% of sales in 2022. CGS in 2023 decreased primarily due to lower tire volume of $803 million, lower costs in other tire-related businesses of $136 million, driven by a decrease in third-party chemical sales in Americas, foreign currency translation of $129 million, driven by the strengthening of the U.S. dollar, lower raw material costs of $67 million, primarily in Americas, a $55 million net reduction as a result of the Tupelo storm, and a $5 million ($4 million after-tax and minority) reversal of a portion of the estimated cleanup costs associated with the permanent closure of Gadsden. These decreases were partially offset by higher conversion costs of $599 million driven by the effect of decreased tire production on fixed cost absorption, inflation and higher energy costs, higher costs related to product mix of $117 million, primarily in Americas, an increase in accelerated depreciation and asset write-offs of $37 million primarily for rationalization activities, and a $7 million ($5 million after-tax and minority) estimated cleanup charge associated with a previously closed Goodyear location.
Previous report
CGS and SAG in 2022 included $9 million and $28 million, respectively, of accelerated depreciation and asset write-offs, of which $30 million ($27 million after-tax and minority) related to rationalization activities.
Previous report
Rationalizations
Previous report
We recorded net rationalization charges of $129 million ($120 million after-tax and minority) in 2022. Net rationalization charges include $37 million for the plan primarily to reduce salaried staff globally, $34 million for the plan to close Cooper Tire's Melksham, United Kingdom facility, $24 million for a plan to reduce duplicative global SAG headcount and close redundant warehouse locations in Americas as part of the integration of Cooper Tire, $16 million related to the permanent closure of our tire manufacturing facility in Gadsden, Alabama, and $14 million related to the exit of our retail operations in South Africa.
Previous report
Goodwill Impairment
Previous report
Interest expense was $532 million in 2023, increasing $81 million from $451 million in 2022. The increase was primarily due to a higher average debt balance of $8,561 million in 2023 compared to $8,266 million in 2022 and a higher average interest rate of 6.21% in 2023 compared to 5.46% in 2022.
Previous report
For further information, refer to Note to the Consolidated Financial Statements No. 6, Other (Income) Expense.
Previous report
Minority Shareholders’ Net Income
Previous report
Net sales in 2023 were $11,993 million, decreasing $773 million, or 6.1%, from $12,766 million in 2022. The decrease in net sales was primarily due to lower tire volume of $705 million, decreased sales in other tire-related businesses of $114 million, primarily due to lower third-party chemical sales, partially offset by higher aviation and retail sales, and the unfavorable impact of the Tupelo storm of $110 million. These decreases were partially offset by improvements in price and product mix of $121 million, driven by price increases, and favorable foreign currency translation of $32 million, primarily related to strengthening of the Mexican peso and the Brazilian real, partially offset by weakening in the Canadian dollar.
Previous report
Operating income in 2023 was $749 million, decreasing $345 million, or 31.5%, from $1,094 million in 2022. The decrease in operating income was due to higher conversion costs of $327 million, driven by the effect of decreased tire production on fixed cost absorption and inflation, lower tire volume of $171 million, and a $55 million negative impact as a result of the Tupelo storm. These decreases were partially offset by lower raw material costs of $154 million, higher earnings in other tire-related businesses of $28 million, primarily due to higher aviation sales, partially offset by lower third-party chemical sales, lower SAG of $11 million, and improvements in price and product mix of $6 million. SAG includes incremental savings from rationalization plans of $36 million. Operating income in 2022 includes a gain of $7 million related to insurance recoveries from a plant fire.
Previous report
Operating income in 2023 was $17 million, decreasing $44 million, or 72.1%, from $61 million in 2022. The decrease in operating income was primarily due to higher conversion costs of $261 million, driven by inflation, the effect of decreased tire production on fixed cost absorption and higher energy costs, lower tire volume of $100 million, higher SAG of $42 million, primarily due to inflation and higher consulting costs, higher transportation costs of $29 million, unfavorable foreign currency translation of $18 million, $18 million as a result of the Debica fire, and lower earnings in other tire-related businesses of $6 million, primarily due to lower Fleet Solutions earnings. These decreases were partially offset by improvements in price and product mix of $496 million, which more than offset higher raw material costs of $78 million, and lower research and development costs of $12 million. SAG for 2023 includes incremental savings from rationalization plans of $15 million.
Previous report
Asia Pacific unit sales in 2023 increased 1.7 million units, or 4.9%, to 36.1 million units. OE tire volume increased 1.9 million units, or 13.8%, primarily driven by new consumer fitments in China and India. Replacement tire volume decreased 0.2 million units, or 1.2%, primarily in our consumer business, driven by decreased demand in most of our markets, partially offset by recovery in China.
Previous report
Net sales in 2023 were $2,467 million, increasing $73 million, or 3.0%, from $2,394 million in 2022. Net sales increased due to higher tire volume of $110 million and improvements in price and product mix of $74 million, driven by price increases. These increases were partially offset by unfavorable foreign currency translation of $104 million, primarily related to the strengthening of the U.S. dollar.
Previous report
Operating income in 2023 was $202 million, increasing $81 million, or 66.9%, from $121 million in 2022. The increase in operating income was primarily due to improvements in price and product mix of $77 million and higher tire volume of $21 million, partially offset by higher raw material costs of $9 million and unfavorable foreign currency translation of $9 million related to the strengthening of the U.S. dollar.
Previous report
As previously disclosed, during the third quarter of 2023, we reduced the near-term and long-term outlook of our EMEA segment based on recent business performance and the industry outlook. As a result, we performed a quantitative analysis as of September 30, 2023 of the fair value of the EMEA reporting unit which resulted in an estimated fair value that exceeded its carrying value, including goodwill. During the fourth quarter of 2023, the industry continued to decline, which resulted in a further reduction in our near-term and long-term outlook to include the updated industry outlook and additional strategic actions and rationalizations. The forecast resulted in lower than previously projected cash flows for the EMEA reporting unit, which negatively affected the valuation compared to the previous valuation. As a result, the fair value of the EMEA reporting unit as of October 31, 2023 was less than its carrying value resulting in a non-cash impairment charge of $230 million during the fourth quarter of 2023.
Reworded paragraphs (100)
Previous wording
The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires, with one of the most recognizable brand names in the world and operations in most regions of the world. We have a broad global footprint with 55 manufacturing facilities in 22 countries, including the United States. We operate our business through three operating segments representing our regional tire businesses: Americas; Europe, Middle East and Africa ("EMEA"); and Asia Pacific.
Current wording
The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires, with one of the most recognizable brand names in the world and operations in most regions of the world. We have a broad global footprint with 53 manufacturing facilities in 20 countries, including the United States. We operate our business through three operating segments representing our regional tire businesses: Americas; EMEA; and Asia Pacific.
Previous wording
On November 15, 2023, we announced a transformation plan, Goodyear Forward, that is intended to optimize our portfolio of products, deliver segment margin expansion and reduce our leverage in order to drive sustainable, long-term shareholder value creation. Optimization of our portfolio consists of a strategic review of three major asset groups: our chemical operations which produces synthetic rubber and other chemical products from four plants in our Americas segment, the Dunlop brand for which we own rights in certain markets throughout the world, but is primarily used in our EMEA segment, and our off-the-road tire product operations. Our plans for margin expansion include brand optimization and tiering to capitalize on premium tire pricing and volume and a reduction of our overall exposure related to lower-tiered products either through margin expansion or product line rationalization. Our plans for margin expansion also include a reduction of our cost structure by $1 billion, including actions related to our manufacturing footprint, plant optimization, further improvement of our purchasing leverage, reduction of Selling Administrative and General expenses (“SAG”) and improvements in our supply chain planning and logistics. We anticipate the accumulated benefit of these actions will improve our segment operating margin to 10% by the end of 2025.
Current wording
On November 15, 2023, we announced a transformation plan, Goodyear Forward, that is intended to optimize our portfolio of products, deliver segment operating margin expansion and reduce our leverage in order to drive sustainable, long-term shareholder value creation. Optimization of our portfolio consisted of a strategic review of three major asset groups: our chemical operations which produces synthetic rubber and other chemical products in our Americas segment, the Dunlop brand for which we own rights in certain markets throughout the world, but is primarily used in our EMEA segment, and our global OTR tire business. Our plans for margin expansion include brand optimization and tiering to capitalize on premium tire pricing and volume and a reduction of our overall exposure related to lower-tiered products either through margin expansion or product line rationalization, resulting in an expected annual run-rate benefit of approximately $200 million by the end of 2025. Our plans for margin expansion also include a reduction of our cost structure by approximately $1.3 billion by the end of 2025, including actions related to our manufacturing footprint, plant optimization, further improvement of our purchasing leverage, reduction of Selling, Administrative and General expenses (“SAG”) and improvements in our supply chain planning and logistics. We anticipate the accumulated benefit of these actions will improve our segment operating margin to approximately 10% by the end of 2025. During the year ended December 31, 2024, the Goodyear Forward plan provided $480 million in benefits to segment operating income.
Previous wording
Our results for 2023 include a 6.1% decrease in tire unit shipments compared to 2022, primarily due to lower global replacement tire volume, partially offset by growth in OE, primarily in Asia Pacific and EMEA. In 2023, we realized approximately $394 million of additional costs related to inflation and other cost pressures.
Current wording
Our results for 2024 include a 3.9% decrease in tire unit shipments compared to 2023 due to lower global replacement tire volume, partially offset by growth in OE. In 2024, we experienced approximately $220 million of inflationary cost pressures.
Previous wording
Net sales were $20,066 million in 2023, compared to $20,805 million in 2022. Net sales decreased in 2023 due to lower tire volume, primarily in Americas and EMEA, partially offset by higher tire volume in Asia Pacific, unfavorable foreign currency translation, driven by the strengthening of the U.S. dollar, a decrease in sales in other tire-related businesses, primarily related to a decrease in third-party chemical sales in Americas and retread sales in EMEA, partially offset by higher global aviation sales and growth in EMEA's Fleet Solutions, and the negative impact of the Tupelo storm on sales. These decreases were partially offset by global improvements in price and product mix.
Current wording
Net sales were $18,878 million in 2024, compared to $20,066 million in 2023. Net sales decreased in 2024 due to lower tire volume in Americas and EMEA, global declines in price and product mix and the negative impact of changes in foreign exchange rates globally, driven by the strengthening of the U.S. dollar. These decreases were partially offset by the negative impact on sales in 2023 caused by a severe storm in the U.S. that significantly damaged our tire manufacturing facility and adjacent warehouse in Tupelo, Mississippi (the "Tupelo storm") and an increase in sales in other tire-related businesses, primarily due to Fleet Solutions in EMEA and higher third-party chemical sales in Americas.
Previous wording
Goodyear net loss in 2023 was $689 million, or $2.42 per share, compared to net income of $202 million, or $0.71 per share, in 2022. The change in Goodyear net income (loss) was primarily due to higher rationalization charges, lower segment operating income, a non-cash goodwill impairment charge, higher interest expense and higher other expense. These decreases were partially offset by lower U.S. and Foreign Tax Expense driven by the pre-tax loss.
Current wording
Goodyear net income in 2024 was $70 million, or $0.24 per share, compared to a net loss of $689 million, or $2.42 per share, in 2023. The change in Goodyear net income (loss) was primarily due to lower rationalization charges, higher segment operating income, lower impairment charges and lower other expense. These increases were partially offset by higher U.S. and Foreign Tax Expense.
Previous wording
At December 31, 2023, we had $902 million of Cash and Cash Equivalents as well as $4,247 million of unused availability under our various credit agreements, compared to $1,227 million and $4,035 million, respectively, at December 31, 2022. The decrease in cash and cash equivalents of $325 million was primarily due to capital expenditures of $1,050 million, net debt repayment of $343 million and loans to TireHub, LLC of $79 million, partially offset by cash provided by operating activities of $1,032 million and cash proceeds from asset sales of $115 million, primarily related to sale and leaseback transactions in Americas. Cash provided by operating activities reflects the net loss for the period of $687 million, which includes non-cash charges for depreciation and amortization of $1,001 million, non-cash rationalization charges of $502 million and a non-cash goodwill impairment charge of $230 million, partially offset by a non-cash gain on asset sales of $104 million, primarily related to the Americas sale and leaseback transactions. Operating activities also includes cash provided by working capital of $299 million, partially offset by rationalization payments of $99 million and pension contributions of $54 million. Refer to "Liquidity and Capital Resources" for additional information.
Current wording
At December 31, 2024, we had $810 million of Cash and Cash Equivalents as well as $3,555 million of unused availability under our various credit agreements, compared to $902 million and $4,247 million, respectively, at December 31, 2023. The decrease in cash and cash equivalents of $92 million was primarily due to capital expenditures of $1,188 million, partially offset by cash provided by operating activities of $698 million, net borrowings of $264 million, cash proceeds from asset sales of $115 million and insurance recoveries for damaged property, plant and equipment of $62 million. Cash provided by operating activities reflects the net income for the period of $60 million, which includes non-cash charges for depreciation and amortization of $1,049 million, a non-cash impairment charge of $125 million, non-cash rationalization charges of $86 million, a non-cash gain on asset sales of $93 million, primarily related to the sale of a distribution center in Germany, and a non-cash gain on insurance recoveries of $75 million. Operating activities also include rationalization payments of $198 million, cash used for working capital of $82 million and pension contributions and direct payments of $69 million. Net cash provided by financing activities was $225 million, primarily due to net borrowings of $264 million. Refer to "Liquidity and Capital Resources" for additional information.
Previous wording
We expect our raw material costs to be lower by approximately $245 million in the first quarter of 2024 compared to the first quarter of 2023. We anticipate price and product mix, when netted with the lower raw material costs, will be a benefit of approximately $115 million in the first quarter of 2024. Price and product mix are expected to reflect lower selling prices to customers with contractual raw material index adjustments and the continuing negative impact of lower commercial tire volume. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and our raw material costs could change based on future cost fluctuations and changes in foreign exchange rates. We continue to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials to minimize the impact of higher raw material costs.
Current wording
We expect approximately $175 million of raw material headwinds in the first quarter of 2025 compared to the first quarter of 2024. These headwinds are expected to be partially offset by approximately $65 million of favorable price and product mix driven by previously implemented pricing actions and customer contracts indexed to changes in raw materials. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and our raw material costs could change based on future cost fluctuations and changes in foreign exchange rates. We continue to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials to minimize the impact of higher raw material costs.
Previous wording
We continue to focus on actions to offset costs other than raw materials through cost savings initiatives, including initiatives related to the Goodyear Forward plan, rationalization actions, and improvements in price and product mix. For the full year of 2024, we anticipate incurring approximately $100 million of advisory, legal and consulting fees and other costs associated with asset sales in connection with our Goodyear Forward plan.
Current wording
We expect non-raw material inflation and other costs, net of other expected cost improvements, to be approximately $75 million higher in the first quarter of 2025 when compared with the first quarter of 2024. We continue to focus on actions to offset costs other than raw materials through cost savings initiatives, including initiatives related to the Goodyear Forward plan, rationalization actions and improvements in price and product mix.
Previous wording
For the full year of 2024, we expect working capital to be flat as compared to 2023. We anticipate our capital expenditures will be $1.2 billion to $1.3 billion, excluding repairs related to the Tupelo tornado and the Debica fire, which we expect to be funded by insurance claim recoveries. We anticipate our cash flows will include rationalization payments of approximately $300 million, as we continue to implement elements of our Goodyear Forward plan and improve our cost structure.
Current wording
For the full year of 2025, we expect working capital to be a $100 million to $150 million source of operating cash flows. We anticipate our capital expenditures to be approximately $950 million. We anticipate our cash flows will include rationalization payments of approximately $400 million, as we continue to implement elements of our Goodyear Forward plan to improve our cost structure.
Previous wording
Goodyear net loss in 2023 was $689 million, or $2.42 per share, compared to net income of $202 million, or $0.71 per share, in 2022. The change in Goodyear net income (loss) was primarily due to higher rationalization charges, lower segment operating income, a non-cash goodwill impairment charge, higher interest expense and higher other expense. These decreases were partially offset by lower U.S. and Foreign Tax Expense driven by the pre-tax loss.
Current wording
Goodyear net income in 2024 was $70 million, or $0.24 per share, compared to a net loss of $689 million, or $2.42 per share, in 2023. The change in Goodyear net income (loss) was primarily due to lower rationalization charges, higher segment operating income, lower impairment charges and lower other expense. These increases were partially offset by higher U.S. and Foreign Tax Expense.
Previous wording
Net sales in 2023 of $20,066 million decreased $739 million, or 3.6%, compared to $20,805 million in 2022, primarily due to lower tire volume of $1,053 million, representing lower tire volume in Americas and EMEA, partially offset by higher tire volume in Asia Pacific, unfavorable foreign currency translation of $169 million, driven by the strengthening of the U.S. dollar, a decrease in sales in other tire-related businesses of $110 million, primarily due to a decrease in third-party chemical sales in Americas and lower retread sales in EMEA, partially offset by higher global aviation sales and growth in EMEA's Fleet Solutions, and the unfavorable impact of the Tupelo storm of $110 million. These decreases were partially offset by global improvements in price and product mix of $696 million. Goodyear worldwide tire unit net sales were $17,288 million and $17,886 million in 2023 and 2022, respectively. Consumer and commercial net sales were $12,894 million and $3,731 million in 2023, respectively. Consumer and commercial net sales were $13,163 million and $4,205 million in 2022, respectively.
Current wording
Net sales in 2024 of $18,878 million decreased $1,188 million, or 5.9%, compared to $20,066 million in 2023, due to lower tire volume of $900 million, primarily in Americas and EMEA, global declines in price and product mix of $349 million and the negative impact of changes in foreign exchange rates globally of $192 million, driven by the strengthening of the U.S. dollar, partially offset by the unfavorable impact of the Tupelo storm on sales in 2023 of $110 million and an increase in sales in other tire-related businesses of $91 million, primarily due to Fleet Solutions in EMEA and higher third-party chemical sales in Americas. Goodyear worldwide tire unit net sales were $15,993 million and $17,288 million in 2024 and 2023, respectively. Consumer and commercial net sales were $12,303 million and $3,247 million in 2024, respectively. Consumer and commercial net sales were $12,894 million and $3,731 million in 2023, respectively.
Previous wording
The decrease in worldwide tire unit sales of 11.2 million units, or 6.1%, compared to 2022, included a decrease of 13.7 million replacement tire units, or 9.5%, reflecting decreases in each region. OE tire units increased by 2.5 million units, or 6.3%, reflecting share gains from new OE fitments in Asia Pacific and EMEA and continued recovery of OE vehicle production in 2023. Consumer and commercial unit sales in 2023 were 159.4 million and 12.1 million, respectively. Consumer and commercial unit sales in 2022 were 169.0 million and 13.6 million, respectively.
Current wording
The decrease in worldwide tire unit sales of 6.7 million units, or 3.9%, compared to 2023, included a decrease of 9.5 million replacement tire units, or 7.3%, reflecting decreases in each region. OE tire units increased by 2.8 million units, or 6.3%, reflecting an increase in EV fitments in Asia Pacific. Consumer and commercial unit sales in 2024 were 154.0 million and 10.9 million, respectively. Consumer and commercial unit sales in 2023 were 159.4 million and 12.1 million, respectively.
Previous wording
CGS in 2023 included pension expense of $15 million compared to $22 million in 2022. CGS in 2023 also included the favorable impact of a successful legal claim of $3 million ($3 million after-tax and minority) related to a 2005 warehouse fire in Spain. CGS in 2022 also included a gain of $7 million ($6 million after-tax and minority) in Americas related to insurance recoveries.
Current wording
CGS in 2024 and 2023 included pension expense of $15 million. CGS in 2023 also included the favorable impact of a successful legal claim of $3 million ($3 million after-tax and minority) related to a 2005 warehouse fire in Spain.
Previous wording
SAG was $2,814 million in 2023, increasing $16 million, or 0.6%, from $2,798 million in 2022. SAG was 14.0% of sales in 2023 compared to 13.4% of sales in 2022. SAG increased primarily due to the impact of inflation on costs and $35 million ($26 million after-tax and minority) of costs related to the Goodyear Forward plan, primarily consisting of advisory, legal and consulting fees incurred to support development and execution of the plan, including costs associated with planned asset sales. These increases were partially offset by lower advertising costs of $28 million, lower accelerated depreciation and asset write-off charges of $28 million, foreign currency translation of $17 million, primarily in EMEA and Asia Pacific, driven by the strengthening of the U.S. dollar, and recoveries of previously written-off accounts receivable and other assets related to our exited business in Russia of $10 million. SAG in 2023 included pension expense of $11 million compared to $15 million in 2022. SAG in 2023 included incremental savings from rationalization plans of $50 million compared to $12 million in 2022.
Current wording
SAG was $2,782 million in 2024, decreasing $32 million, or 1.1%, from $2,814 million in 2023. SAG was 14.7% of sales in 2024 compared to 14.0% of sales in 2023. SAG decreased primarily due to lower wages and benefits of $92 million driven by Goodyear Forward savings and lower incentive compensation, lower advertising costs of $26 million and lower foreign currency translation of $22 million. These decreases were partially offset by higher asset write-offs, accelerated depreciation and accelerated lease costs of $40 million. SAG in 2024 also included costs related to the Goodyear Forward plan of $105 million ($80 million after-tax and minority) compared to $35 million ($26 million after-tax and minority) in 2023, primarily consisting of advisory, legal and consulting fees incurred to support development and execution of the plan, including costs associated with planned asset sales.
Previous wording
CGS and SAG in 2023 included $46 million ($42 million after-tax and minority) of accelerated depreciation and asset write-offs and $10 million ($10 million after-tax and minority) of recoveries of previously written-off accounts receivable and other assets related to our exited business in Russia, respectively, which related to rationalization activities.
Current wording
CGS and SAG in 2023 included $46 million ($42 million after-tax and minority) of accelerated depreciation and asset write-offs and $10 million ($10 million after-tax and minority) of recoveries of previously written-off accounts receivable and other assets related to our exited business in Russia, which related to rationalization activities.
Previous wording
Upon completion of new plans initiated in 2023, we estimate that annual segment operating income will improve by approximately $320 million (approximately $200 million SAG and approximately $120 million CGS). The savings realized in 2023 from rationalization plans totaled approximately $50 million (primarily SAG).
Current wording
Upon completion of new plans initiated in 2024, we estimate that annual segment operating income will improve by approximately $70 million (approximately $40 million SAG and approximately $30 million CGS). The savings realized in 2024 from rationalization plans totaled approximately $60 million (primarily SAG).
Previous wording
For further information, refer to Note to the Consolidated Financial Statements No. 4, Costs Associated with Rationalization Programs.
Current wording
For further information, refer to Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization Programs.
Previous wording
During 2023, we recorded a non-cash impairment charge of $230 million ($216 million after-tax and minority) to write off all of the goodwill of our EMEA reporting unit. For further information, refer to "Critical Accounting Policies - Goodwill and Intangible Assets" and Notes to the Consolidated Financial Statements No. 12, Goodwill and Intangible Assets, in this Form 10-K.
Current wording
During 2024, we recorded a non-cash impairment charge of $125 million ($94 million after-tax and minority) primarily related to our lower tier indefinite-lived intangible assets related to the acquisition of Cooper Tire as a result of increased competition from lower tier imports in the market. During 2023, we recorded a non-cash impairment charge of $230 million ($216 million after-tax and minority) to write off all of the goodwill of our EMEA reporting unit. For further information, refer to "Critical Accounting Policies - Goodwill and Intangible Assets" and Notes to the Consolidated Financial Statements No. 11, Goodwill and Intangible Assets, in this Form 10-K.
Previous wording
Other (Income) Expense was $108 million and $75 million of expense in 2023 and 2022, respectively. The $33 million increase in expense was primarily due to a $75 million net increase in foreign currency exchange losses, primarily due to the weakening of the Argentine peso, partially offset by an increase in interest income of $50 million, primarily in Argentina, and a $19 million increase in fees related to accounts receivable factoring programs driven by higher interest rates. Additionally, the change in Other (Income) Expense reflects $31 million ($24 million after-tax and minority) of expense in 2023 for non-indemnified costs for product liability claims related to products manufactured by a formerly consolidated joint venture entity and net gains on asset and other sales in 2023 of $94 million ($69 million after-tax and minority), primarily related to sale and leaseback transactions in Americas, compared to a gain of $115 million ($87 million after-tax and minority) in 2022, primarily related to a sale and leaseback transaction in Americas. These increases were partially offset by a net decrease in non-service related pension and other postretirement benefits cost of $30 million primarily due to lower pension settlement charges of $40 million ($30 million after-tax and minority) in 2023 compared to pension settlement charges of $124 million ($93 million after-tax and minority) in 2022, partially offset by an increase in net periodic cost due to higher interest rates, and $5 million ($5 million after-tax and minority) of income for the write-off of accumulated foreign currency translation related to our exited business in Russia. Other (Income) Expense in 2023 includes $11 million ($8 million after-tax and minority) of income related to a favorable court decision setting aside a previous unfavorable verdict on intellectual property-related legal claims. The impact of that verdict and other fees in 2022 related to these claims was $15 million of expense ($11 after-tax and minority).
Current wording
Other (Income) Expense was $32 million and $108 million of expense in 2024 and 2023, respectively. The $76 million decrease in expense was primarily due to a $78 million net decrease in foreign currency exchange losses driven by fluctuations in the Argentine peso and the Turkish lira, a net decrease in non-service related pension and other postretirement benefits cost of $49 million primarily due to settlement credits of $3 million ($2 million after-tax and minority) in 2024 compared to pension settlement charges of $40 million ($30 million after-tax and minority) in 2023. Additionally, the change in Other (Income) Expense reflects net gains on asset and other sales of $85 million ($60 million after-tax and minority), primarily related to the sale of distribution centers in EMEA and Americas, compared to a net gain on asset and other sales of $94 million ($69 million after-tax and minority) in 2023, primarily related to a sale and leaseback transaction in Americas. Other (Income) Expense in 2024 had lower interest income of $30 million compared to 2023 and lower royalty income of $9 million compared to 2023.
Previous wording
Income tax expense in 2022 was $190 million on income before income taxes of $399 million. In 2022, income tax expense includes net discrete tax expense totaling $23 million ($23 million after minority interest), including a charge of $14 million to write off deferred tax assets related to tax loss carryforwards in the U.K. and a charge of $11 million to establish a full valuation allowance on our net deferred tax assets in Russia, partially offset by a net benefit of $2 million for various other items.
Current wording
Income tax expense in 2024 was $95 million on income before income taxes of $155 million. In 2024, income tax expense includes a net discrete tax benefit totaling $2 million ($2 million after minority interest).
Previous wording
At December 31, 2023 and December 31, 2022, we had approximately $1.2 billion and $1.1 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $22 million and $26 million in each period, respectively, primarily for state tax loss carryforwards with limited lives. As of December 31, 2023, approximately $1.0 billion of these U.S. net deferred tax assets have unlimited lives and approximately $200 million have limited lives, including $22 million of foreign tax credits, and the majority do not start to expire until 2031. As of December 31, 2022, approximately $700 million of these U.S. net deferred tax assets had unlimited lives and approximately $400 million had limited lives, including $230 million of foreign tax credits, and had expiration dates between 2023 and 2042. In the U.S., as of December 31, 2023, we emerged from a three-year cumulative loss which was driven by business disruptions created by the COVID-19 pandemic. Our U.S. cumulative income for the three-years ended December 31, 2023 is primarily a result of gains from other comprehensive income rather than consistently profitable U.S. operating results. Our 2023 U.S. operating results in the first six months of the year were negatively impacted by lower sales volumes due to commercial replacement tire channel destocking, reduced consumer industry demand and the Tupelo storm. However, our second half of 2023 showed improvement and profitability in our U.S. operating results.
Current wording
At December 31, 2024 and December 31, 2023, we had approximately $1.3 billion and $1.2 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $26 million and $22 million, respectively, in each period, primarily for state tax loss carryforwards with limited lives. As of December 31, 2024, approximately $1.1 billion of these U.S. net deferred tax assets had unlimited lives and approximately $200 million had limited lives, including $24 million of foreign tax credits, and the majority do not start to expire until 2030. As of December 31, 2023, approximately $1.0 billion of these U.S. net deferred tax assets had unlimited lives and approximately $200 million had limited lives, including $22 million of foreign tax credits, and the majority do not start to expire until 2030. In the U.S., we have a cumulative loss for the three-year period ended December 31, 2024 primarily driven by non-recurring items such as rationalization charges, pension curtailments and settlements, one-time costs associated with the Goodyear Forward plan, and intangible asset impairments.
Previous wording
In assessing our ability to utilize our net deferred tax assets, we primarily considered objectively verifiable information, including the improvement in our U.S. operating results during the second half of 2023 as a result of improved tire volume and lower raw material and transportation costs compared to the first half of 2023. In addition, we consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets as well as the impact of tax planning strategies. These forecasts include the impact of recent trends and various macroeconomic factors such as the impact of raw material, transportation, labor and energy costs on our profitability. Our tax planning strategies include accelerating income on cross border transactions, including sales of inventory or raw materials to our subsidiaries, reducing U.S. interest expense by, for example, reducing intercompany loans through repatriating current year earnings of foreign subsidiaries, repatriation of certain foreign royalty income, and other financing transactions, all of which would increase our domestic profitability.
Current wording
In assessing our ability to utilize our net deferred tax assets, we primarily considered objectively verifiable information, including the improvement of our U.S. operating results during 2024 as a result of lower raw material and transportation costs and benefits from the Goodyear Forward plan compared to 2023 as well as non-deductible interest and future royalty income from foreign subsidiaries. In addition, we considered our current forecasts of future profitability in assessing our ability to realize our deferred tax assets as well as the impact of tax planning strategies. These forecasts include the impact of recent trends and various macroeconomic factors such as the impact of raw material, transportation, labor and energy costs on our profitability. Our tax planning strategies include accelerating income on cross border transactions, including sales of inventory or raw materials to our subsidiaries, reducing U.S. interest expense by, for example, reducing intercompany loans through repatriating current year earnings of foreign subsidiaries, repatriation of certain foreign royalty income, and other financing transactions, all of which would increase our domestic profitability.
Previous wording
We believe our improvement in U.S. operating results during the second half of 2023 and forecasts of future profitability provide us sufficient positive evidence to conclude that it is more likely than not that, at December 31, 2023, our U.S. net deferred tax assets will be fully utilized. However, macroeconomic factors such as raw material, transportation, labor and energy costs possess a high degree of volatility and can significantly impact our profitability. In addition, certain tax provisions, such as the annual interest expense limitation under Section 163(j) of the Internal Revenue Code of 1986, if amended, could impact our analysis of the realizability of our U.S. deferred tax assets. If our U.S. operating results significantly decline in the future, we may need to record a valuation allowance which could adversely impact our operating results. As such, we will closely monitor our U.S. operations as well as any tax law changes to assess the realizability of our U.S. deferred tax assets.
Current wording
We believe our improvement in U.S. operating results for the year ended December 31, 2024 compared to the year ended December 31, 2023, as well as forecasts of future profitability, provide us sufficient positive evidence to conclude that it is more likely than not that, at December 31, 2024, our U.S. net deferred tax assets will be fully utilized. However, macroeconomic factors such as raw material, transportation, potential tariff, labor and energy costs possess a high degree of volatility and can significantly impact our profitability. In addition, certain tax provisions, such as the annual interest expense limitation under Section 163(j) of the Internal Revenue Code of 1986, if amended, could impact our analysis of the realizability of our U.S. deferred tax assets. If our U.S. operating results significantly decline in the future, we may need to record a valuation allowance which could adversely impact our operating results. As such, we will closely monitor our U.S. operations as well as any tax law changes to assess the realizability of our U.S. deferred tax assets.
Previous wording
At December 31, 2023 and December 31, 2022, we also had approximately $1.5 billion and $1.2 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.2 billion and $1.0 billion, respectively. Our losses in various foreign taxing jurisdictions in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of these net foreign deferred tax assets. Most notably, in Luxembourg, we maintain a valuation allowance of approximately $1.0 billion on all of our net deferred tax assets. Each reporting period, we assess available positive and negative evidence and estimate if sufficient future taxable income will be generated to utilize these existing deferred tax assets. We do not believe that sufficient positive evidence required to release valuation allowances on our foreign deferred tax assets having a significant impact on our financial position or results of operations will exist within the next twelve months.
Current wording
At December 31, 2024 and December 31, 2023, we also had approximately $1.5 billion of foreign net deferred tax assets and related valuation allowances of approximately $1.2 billion. Our losses in various foreign taxing jurisdictions in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of these net foreign deferred tax assets. Most notably, in Luxembourg, we maintain a valuation allowance of approximately $1.0 billion on all of our net deferred tax assets. Each reporting period, we assess available positive and negative evidence and estimate if sufficient future taxable income will be generated to utilize these existing deferred tax assets. We do not believe that sufficient positive evidence required to release valuation allowances on our foreign deferred tax assets having a significant impact on our financial position or results of operations will exist within the next twelve months.
Previous wording
For further information regarding income taxes and the realizability of our deferred tax assets, refer to "Critical Accounting Policies" and Note to the Consolidated Financial Statements No. 7, Income Taxes.
Current wording
For further information regarding income taxes and the realizability of our deferred tax assets, refer to "Critical Accounting Policies" and Note to the Consolidated Financial Statements No. 6, Income Taxes.
Previous wording
Minority shareholders’ net income was $2 million in 2023, compared to $7 million in 2022.
Current wording
Minority shareholders’ net loss was $10 million in 2024, primarily due to the closure of our Malaysia tire manufacturing facility, compared to net income of $2 million in 2023.
Previous wording
Total segment operating income in 2023 was $968 million, a decrease of $308 million, or 24.1%, from $1,276 million in 2022. Total segment operating margin (segment operating income divided by segment sales) in 2023 was 4.8% compared to 6.1% in 2022.
Current wording
Total segment operating income in 2024 was $1,318 million, an increase of $350 million, or 36.2%, from $968 million in 2023. Total segment operating margin (segment operating income divided by segment sales) in 2024 was 7.0% compared to 4.8% in 2023.
Previous wording
Management believes that total segment operating income is useful because it represents the aggregate value of income created by our SBUs and excludes items not directly related to the SBUs for performance evaluation purposes. Total segment operating income is the sum of the individual SBUs’ segment operating income. Refer to Note to the Consolidated Financial Statements No. 9, Business Segments, for further information and for a reconciliation of total segment operating income to Income (Loss) before Income Taxes.
Current wording
Management believes that total segment operating income is useful because it represents the aggregate value of income created by our SBUs and excludes items not directly related to the SBUs for performance evaluation purposes. Total segment operating income is the sum of the individual SBUs’ segment operating income. Refer to Note to the Consolidated Financial Statements No. 8, Business Segments, for further information and for a reconciliation of total segment operating income to Income (Loss) before Income Taxes.
Previous wording
Americas unit sales in 2023 decreased 7.7 million units, or 8.0%, to 87.3 million units. Replacement tire volume decreased 7.3 million units, or 9.1%, primarily due to a decrease in our consumer business, driven by increased competitiveness in the U.S. market, the impact of the Tupelo storm, and lower share in Mexico and Brazil as a result of increased imports. OE tire volume decreased 0.4 million units, or 2.3%, primarily due to our commercial business, driven by reduced industry demand in the U.S.
Current wording
Americas unit sales in 2024 decreased 5.7 million units, or 6.6%, to 81.6 million units. Replacement tire volume decreased 6.6 million units, or 9.0%, primarily due to a decrease in our consumer business, driven by increased competitiveness in the U.S. from the lower tier market and the transitory impact from distribution changes in Latin America. OE tire volume increased 0.9 million units, or 5.9%, primarily due to our consumer business in the U.S. and Brazil.
Previous wording
Operating income in 2023 excluded net gains on asset sales of $104 million, primarily related to sale and leaseback transactions, net rationalization charges of $19 million, and accelerated depreciation and asset write-offs of $19 million. Operating income in 2022 excluded net gains on asset sales of $122 million, primarily related to a sale and leaseback transaction and a sale and exit of certain retail locations, and net rationalization charges of $32 million.
Current wording
Operating income in 2024 excluded an intangible asset impairment of $125 million, net rationalization charges of $23 million, asset write-offs, accelerated depreciation and accelerated lease costs of $14 million, and net gains on asset sales of $13 million. Operating income in 2023 excluded net gains on asset sales of $104 million, primarily related to sale and leaseback transactions, net rationalization charges of $19 million, and accelerated depreciation and asset write-offs of $19 million.
Previous wording
Americas' results are highly dependent upon the United States, which accounted for 83% of Americas' net sales in 2023 and 84% in 2022. Results of operations in the United States are expected to continue to have a significant impact on Americas' future performance.
Current wording
Americas results are highly dependent upon the United States, which accounted for 84% of Americas net sales in 2024 and 83% in 2023. Results of operations in the United States are expected to continue to have a significant impact on Americas future performance.
Previous wording
Europe, Middle East and Africa unit sales in 2023 decreased 5.2 million units, or 9.5%, to 49.9 million units. Replacement tire volume decreased 6.2 million units, or 14.4%, primarily in our consumer business, reflecting the impacts of continued industry declines. OE tire volume increased 1.0 million units, or 7.9%, reflecting stabilization of OE production.
Current wording
Europe, Middle East and Africa unit sales in 2024 decreased 1.0 million units, or 2.0%, to 48.9 million units. Replacement tire volume decreased 0.8 million units, or 2.1%, primarily in our consumer business, reflecting the impacts of competitiveness from the lower tier market, and lower tire volume, particularly in Turkey. OE tire volume decreased 0.2 million units, or 1.6%, primarily in our commercial business, driven by lower vehicle production.
Previous wording
Net sales in 2023 were $5,606 million, decreasing $39 million, or 0.7%, from $5,645 million in 2022. The decrease in net sales was driven by lower tire volume of $458 million and unfavorable foreign currency translation of $97 million, driven by a weaker Turkish lira and South African rand, partially offset by a stronger euro and Polish zloty. These decreases were partially offset by improvements in price and product mix of $501 million, driven by price increases, and higher sales in other tire-related businesses of $14 million, primarily due to growth in Fleet Solutions, partially offset by lower retread and retail sales.
Current wording
Net sales in 2024 were $5,425 million, decreasing $181 million, or 3.2%, from $5,606 million in 2023. The decrease in net sales was primarily driven by the negative impact of changes in foreign exchange rates of $101 million, driven by a weaker Turkish lira, partially offset by a stronger euro, Polish zloty and British pound, lower tire volume of $86 million, and unfavorable price and product mix of $19 million. These decreases were partially offset by higher sales in other tire-related businesses of $24 million, primarily due to growth in Fleet Solutions.
Previous wording
Operating income in 2023 excluded a non-cash goodwill impairment charge of $230 million, net rationalization charges of $409 million, accelerated depreciation of $27 million and recoveries of previously written-off accounts receivable and other assets of $10 million in Russia. Operating income in 2022 excluded net rationalization charges of $92 million and accelerated depreciation and asset write-offs of $20 million.
Current wording
Operating income in 2024 excluded a $79 million gain on asset sales, accelerated depreciation and accelerated lease charges of $68 million, and net rationalization charges of $36 million. Operating income in 2023 excluded net rationalization charges of $409 million, a non-cash goodwill impairment charge of $230 million, accelerated depreciation of $27 million and recoveries of previously written-off accounts receivable and other assets of $10 million in Russia.
Previous wording
EMEA’s results are highly dependent upon Germany, which accounted for 15% of EMEA’s net sales in both 2023 and 2022. Results of operations in Germany are expected to continue to have a significant impact on EMEA’s future performance.
Current wording
EMEA’s results are highly dependent upon Germany, which accounted for 17% and 15% of EMEA’s net sales in both 2024 and 2023, respectively. Results of operations in Germany are expected to continue to have a significant impact on EMEA’s future performance.
Previous wording
Operating income in 2023 excluded net rationalization charges of $25 million.
Current wording
Operating income in 2024 excluded asset write-offs, accelerated depreciation and accelerated lease charges of $44 million, net rationalization charges of $13 million, and net gains on asset sales of $1 million. Operating income in 2023 excluded net rationalization charges of $25 million.
Previous wording
Asia Pacific’s results are highly dependent upon China and Australia. China accounted for 33% and 29% of Asia Pacific’s net sales in 2023 and 2022, respectively. Australia accounted for 21% and 24% of Asia Pacific’s net sales in 2023 and 2022, respectively. Results of operations in China and Australia are expected to continue to have a significant impact on Asia Pacific's future performance.
Current wording
Asia Pacific’s results are highly dependent upon China, Australia and India. China accounted for 38% and 33% of Asia Pacific’s net sales in 2024 and 2023, respectively. India accounted for 17% of Asia Pacific’s net sales for both 2024 and 2023. Australia accounted for 17% and 21% of Asia Pacific’s net sales in 2024 and 2023, respectively. Results of operations in China and India are expected to have a significant impact on Asia Pacific's future performance.
Previous wording
At December 31, 2023, we had $902 million of Cash and Cash Equivalents, compared to $1,227 million at December 31, 2022. The decrease in cash and cash equivalents of $325 million was primarily due to capital expenditures of $1,050 million, net debt repayment of $343 million and loans to TireHub, LLC of $79 million, partially offset by cash provided by operating activities of $1,032 million and cash proceeds from asset sales of $115 million, primarily related to the sale and leaseback transactions in Americas. Cash provided by operating activities reflects the net loss for the period of $687 million, which includes non-cash charges for depreciation and amortization of $1,001 million, non-cash rationalization charges of $502 million, a non-cash goodwill impairment charge of $230 million and a non-cash gain on asset sales of $104 million, primarily related to the Americas sale and leaseback transactions. Operating activities also include cash provided by working capital of $299 million, partially offset by rationalization payments of $99 million and pension contributions of $54 million.
Current wording
At December 31, 2024, we had $810 million of Cash and Cash Equivalents, compared to $902 million at December 31, 2023. The decrease in cash and cash equivalents of $92 million was primarily due to capital expenditures of $1,188 million, partially offset by cash provided by operating activities of $698 million, net borrowings of $264 million, cash proceeds from asset sales of $115 million and insurance recoveries for damaged property, plant and equipment of $62 million. Cash provided by operating activities reflects net income for the period of $60 million, which includes non-cash charges for depreciation and amortization of $1,049 million, a non-cash impairment charge of $125 million, non-cash rationalization charges of $86 million, a non-cash gain on asset sales of $93 million, primarily related to the sale of a distribution center in Germany, and a non-cash gain on insurance recoveries of $75 million. Operating activities also include rationalization payments of $198 million, cash used for working capital of $82 million and pension contributions and direct payments of $69 million.
Previous wording
At December 31, 2023 and 2022, we had $4,247 million and $4,035 million, respectively, of unused availability under our various credit agreements. The table below provides unused availability by our significant credit facilities as of December 31:
Current wording
At December 31, 2024 and 2023, we had $3,555 million and $4,247 million, respectively, of unused availability under our various credit agreements. The table below provides unused availability by our significant credit facilities as of December 31:
Previous wording
We expect our 2024 cash flow needs to include capital expenditures of $1.2 billion to $1.3 billion. We also expect interest expense to be $520 million to $540 million; rationalization payments to be approximately $300 million; income tax payments to be approximately $200 million, excluding one-time items; and contributions to our funded pension plans to be $25 million to $50 million. We expect working capital to be flat as compared to 2023.
Current wording
We expect our 2025 cash flow needs to include capital expenditures of approximately $950 million. We also expect interest expense to be $450 million to $475 million; rationalization payments to be approximately $400 million; income tax payments to be approximately $200 million, excluding one-time items; and contributions to our funded pension plans to be $25 million to $50 million. We expect working capital to be a source of cash of $100 million to $150 million as compared to 2024.
Showing the first 40 of 100 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
SAG in 2024 and 2023 included pension expense of $11 million. SAG in 2024 included incremental savings from rationalization plans of $46 million compared to $50 million in 2023.
Current report — wording carried from elsewhere
Other (Income) Expense in 2024 also includes transaction costs of $19 million ($14 million after-tax and minority) related to the anticipated sale of the OTR business and a favorable $2 million ($1 million after-tax and minority) tax item in Brazil. Other (Income) Expense in 2023 included $31 million ($24 million after-tax and minority) of expense in 2023 for non-indemnified costs for product liability claims related to products manufactured by a formerly consolidated joint venture entity, $11 million ($8 million after-tax and minority) of income related to a favorable court decision setting aside a previous unfavorable verdict on intellectual property-related legal claims and $5 million ($5 million after-tax and minority) of income for the write-off of accumulated foreign currency translation related to our exited business in Russia.