GOODYEAR TIRE & RUBBER CO /OH/

Previous wording

The Goodyear Tire & Rubber Company (the "Company," "Goodyear," "we," "us" or "our") 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 54 manufacturing facilities in 21 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 (the "Company," "Goodyear," "we," "us" or "our") 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; Europe, Middle East and Africa (“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 operating 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 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 ("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. Our plans for margin expansion also include a reduction of our cost structure by approximately $1.2 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 approximately 10% by the end of 2025. During the three and nine months ended September 30, 2024, the Goodyear Forward plan provided $123 million and $285 million, respectively, in benefits to segment operating income.

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 off-the-road ("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 three months ended March 31, 2025, the Goodyear Forward plan provided $200 million in benefits to segment operating income.

Previous wording

Our results for the third quarter of 2024 include a 6.2% decrease in tire unit shipments compared to 2023 due to lower global replacement tire volume, partially offset by growth in OE. In the third quarter of 2024, we experienced approximately $53 million of inflationary cost pressures.

Current wording

Our results for the first quarter of 2025 include a 4.8% decrease in tire unit shipments compared to 2024 due to lower global tire volume. In the first quarter of 2025, we experienced approximately $55 million of inflationary cost pressures.

Previous wording

Net sales in the first nine months of 2024 were $13,931 million, compared to $14,950 million in the first nine months of 2023. Net sales decreased in 2024 primarily due to lower tire volume in Americas and EMEA, partially offset by higher tire volume in Asia Pacific, 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 sales lost during the first nine months of 2023 due to the Tupelo storm and higher sales in other tire-related businesses, primarily due to Fleet Solutions in EMEA and higher third-party chemical sales in Americas.

Current wording

Net sales in the first three months of 2025 were $4,253 million, compared to $4,537 million in the first three months of 2024. Net sales decreased in 2025 primarily due to lower global tire volume, the impact of changes in foreign exchange rates globally, driven by the strengthening of the U.S. dollar, and the impact of the sale of the OTR tire business, primarily in Asia Pacific. These decreases were partially offset by favorable price and product mix and higher sales in other tire-related businesses, primarily due to higher third-party chemical sales in Americas.

Previous wording

At September 30, 2024, we had $905 million of cash and cash equivalents as well as $2,508 million of unused availability under our various credit agreements, compared to $902 million and $4,247 million, respectively, at December 31, 2023. The increase in cash and cash equivalents of $3 million was primarily due to net borrowings of $1,366 million, proceeds from asset dispositions and sale and leaseback transactions of $126 million, primarily from the sale of a distribution center in Germany and the sale and leaseback of a warehouse in Americas, and insurance recoveries of $48 million for the replacement of equipment damaged in the Debica fire and Tupelo storm, partially offset by capital expenditures of $912 million, net cash used for operating activities of $591 million, and loans to TireHub LLC ("TireHub") of $28 million. Net cash used for operating activities reflects cash used for working capital of $1,124 million, rationalization payments of $149 million, and pension contributions of $45 million, as well as the Company's net loss for the period of $12 million, which includes non-cash charges for depreciation and amortization of $800 million, an intangible asset impairment of $125 million, net rationalization charges of $52 million, a non-cash gain on asset sales of $95 million, and a gain on insurance recoveries for damaged property, plant and equipment of $61 million. Refer to "Liquidity and Capital Resources" for additional information.

Current wording

At March 31, 2025, we had $902 million of cash and cash equivalents as well as $2,623 million of unused availability under our various credit agreements, compared to $810 million and $3,555 million, respectively, at December 31, 2024. The increase in cash and cash equivalents of $92 million was primarily due to cash provided by the sale of the OTR tire business of $720 million and net borrowings of $198 million, partially offset by net cash used for operating activities of $538 million and capital expenditures of $259 million. Net cash used for operating activities reflects cash used for working capital of $750 million, rationalization payments of $65 million, and pension contributions and direct payments of $41 million, partially offset by proceeds from the sale of our OTR tire business of $185 million for deferred income related to the trademark license and product supply agreements, as well as the Company's net income for the period of $118 million, which includes non-cash charges for depreciation and amortization of $270 million and a non-cash gain on asset sales of $262 million. Refer to "Liquidity and Capital Resources" for additional information.

Previous wording

In the fourth quarter of 2024, we expect our unit volume will continue to be affected by weak underlying industry trends, including high distribution channel inventories of low-end imported products in the U.S. and Europe. We expect our global tire unit volume in the fourth quarter of 2024 to be lower compared to the fourth quarter of 2023 by approximately 4%. We also expect unabsorbed overhead to be approximately $40 million higher in the fourth quarter of 2024 compared to the fourth quarter of 2023 due to lower production in the third quarter of 2024.

Current wording

In the second quarter of 2025, we expect our global tire unit volume to decline approximately 2% compared to the second quarter of 2024 driven by elevated wholesale channel inventories in the United States and lower volume in Asia Pacific. We also expect unabsorbed overhead to be approximately $20 million higher in the second quarter of 2025 compared to the second quarter of 2024 due to lower production in the first quarter of 2025.

Previous wording

As we continue to make progress on our Goodyear Forward transformation plan, we expect fourth quarter benefits from the program of approximately $165 million in segment operating income, and full year benefits of approximately $450 million.

Current wording

We expect to continue progress on our Goodyear Forward transformation plan in 2025, with second quarter benefits from the program of approximately $190 million and full year benefits of approximately $750 million in segment operating income. The expected impact of the sale of the OTR tire business on our segment operating income is approximately $23 million in the second quarter.

Previous wording

We expect approximately $100 million of raw material headwinds in the fourth quarter of 2024 compared to the fourth quarter of 2023. We also expect price and product mix to be a headwind of approximately $15 million driven by higher OE sales volume in the fourth quarter of 2024 compared to the fourth quarter of 2023. 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 our raw material costs to increase approximately $180 million in the second quarter of 2025 compared to the second quarter of 2024, driven by natural rubber and foreign currency costs. These raw material cost increases are expected to be partially offset by approximately $135 million of price and product mix improvements, 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 materials 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 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 expect non-raw material inflation and other costs, net of other expected cost improvements, to be approximately $35 million higher in the fourth quarter of 2024 when compared with the fourth quarter of 2023. 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.

Current wording

We expect non-raw material inflation and other costs to be approximately $120 million higher in the second quarter of 2025 compared with the second quarter of 2024. These costs include the impact of inflation, tariffs, increased transportation costs and other manufacturing costs associated with announced rationalization plans. At the current tariff rates, we expect non-raw material and other costs to be approximately $175 million in the third and fourth quarters of 2025 as compared to the same quarters 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 a $150 million to $200 million use of operating cash flows. We anticipate our capital expenditures to be approximately $1,200 million, excluding approximately $50 million of capital expenditures covered by insurance. We anticipate our cash flows will include rationalization payments of approximately $225 million, as we continue to implement elements of our Goodyear Forward plan to improve our cost structure.

Current wording

For the full year of 2025, we expect working capital to be a source of operating cash flows of approximately $50 million. 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

Refer to "Item 1A. Risk Factors" in the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 and in the 2023 Form 10-K for a discussion of the factors that may impact our business, results of operations, financial condition or liquidity and "Forward-Looking Information — Safe Harbor Statement" in this Quarterly Report on Form 10-Q for a discussion of our use of forward-looking statements.

Current wording

Refer to "Item 1A. Risk Factors" in the 2024 Form 10-K for a discussion of the factors that may impact our business, results of operations, financial condition or liquidity and "Forward-Looking Information — Safe Harbor Statement" in this Quarterly Report on Form 10-Q for a discussion of our use of forward-looking statements.

Previous wording

Worldwide tire unit sales in the first nine months of 2024 were 123.0 million units, decreasing 4.9 million units, or 3.8%, from 127.9 million units in the first nine months of 2023. Replacement tire volume decreased globally by 7.4 million units, or 7.7%. OE tire volume increased globally by 2.5 million units, or 8.0%.

Current wording

Worldwide tire unit sales in the first three months of 2025 were 38.5 million units, decreasing 1.9 million units, or 4.8%, from 40.4 million units in the first three months of 2024. Replacement tire volume decreased globally by 1.8 million units, or 6.3%. OE tire volume decreased globally by 0.1 million units, or 1.1%.

Previous wording

CGS in the third quarter of 2024 and 2023 included pension expense of $4 million and $3 million, respectively. CGS in the third quarter of 2024 included $3 million of incremental savings from rationalization plans. CGS was 80.5% of sales in the third quarter of 2024, compared to 81.1% in the third quarter of 2023.

Current wording

CGS in the first three months of 2025 and 2024 included pension expense of $2 million and $3 million, respectively. CGS in the first three months of 2025 included $9 million of incremental savings from rationalization plans. CGS was 82.6% of sales in the first three months of 2025, compared to 81.9% in the first three months of 2024.

Previous wording

SAG in the first nine months of 2024 was $2,090 million, increasing $45 million, or 2.2%, from $2,045 million in the first nine months of 2023. SAG increased primarily due to an increase in costs associated with the Goodyear Forward plan of $81 million ($61 million after-tax and minority), primarily related to third-party advisory, legal and consulting fees and costs associated with planned asset sales, an increase in accelerated lease costs and asset write-offs of $36 million, and inflation of $30 million. These increases were partially offset by savings related to the Goodyear Forward plan of $57 million, foreign currency translation of $21 million, and lower advertising costs of $15 million.

Current wording

SAG in the first three months of 2025 was $650 million, decreasing $46 million, or 6.6%, from $696 million in the first three months of 2024. SAG decreased primarily due to lower wages and benefits of $11 million, lower warehouse and retail expenses of $11 million, driven by Goodyear Forward plan actions, and a $9 million benefit as a result of the sale of the OTR tire business, partially offset by $11 million of other costs, primarily related to inflation. SAG in the first three months of 2025 also included costs related to the Goodyear Forward plan of $2 million ($2 million after-tax and minority) compared to $28 million ($21 million after-tax and minority) in the first three months of 2024, primarily related to third-party advisory, legal and consulting fees and costs associated with planned asset sales.

Previous wording

SAG in the third quarter of 2024 and 2023 included pension expense of $3 million and $4 million, respectively. SAG in the third quarter of 2024 included $7 million of incremental savings from rationalization plans, compared to $12 million in 2023. SAG was 13.7% of sales in the third quarter of 2024, compared to 13.1% in the third quarter of 2023.

Current wording

SAG in the first three months of 2025 and 2024 included pension expense of $3 million and $4 million, respectively. SAG in the first three months of 2025 included $3 million of incremental savings from rationalization plans, compared to $14 million in 2024. SAG was 15.3% of sales in both the first three months of 2025 and 2024.

Previous wording

We recorded net rationalization charges of $52 million ($40 million after-tax and minority) in the first nine months of 2024 and $302 million ($262 million after-tax and minority) in the first nine months of 2023. Net rationalization charges in the first nine months of 2024 primarily related to the closures of our Malaysia, Melksham, Fulda and Fürstenwalde tire manufacturing facilities, as well as the closure of a development center and warehouse in the U.S., and the plan to open a new shared services center in Costa Rica, partially offset by reversals related to our rationalization and workforce reorganization plan in EMEA due to voluntary attrition. Net rationalization charges in the first nine months of 2023 primarily related to the rationalization and workforce reorganization plan in EMEA, the plan to reduce production capacity at Fulda, the plan to improve profitability in our Australia and New Zealand operations, and the plan to streamline our EMEA distribution network. For further information, refer to Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization Programs.

Current wording

We recorded net rationalization charges of $81 million ($64 million after-tax and minority) in the first three months of 2025 and $22 million ($17 million after-tax and minority) in the first three months of 2024. Net rationalization charges in the first three months of 2025 primarily related to the elimination of commercial tire production at Danville, the closures of our Fulda and Fürstenwalde, Germany tire manufacturing facilities, and the plan to reduce SAG headcount in Americas and Corporate. Net rationalization charges in the first three months of 2024 primarily related to the closures of our Malaysia tire manufacturing facility and Cooper Tire's Melksham, United Kingdom tire manufacturing facility ("Melksham"). For further information, refer to Note to the Consolidated Financial Statements No. 4, Costs Associated with Rationalization Programs.

Previous wording

Interest expense in the first nine months of 2024 was $391 million, decreasing $12 million, or 3.0%, from $403 million in the first nine months of 2023. The average interest rate was 6.24% in the first nine months of 2024 compared to 6.18% in the first nine months of 2023. The average debt balance was $8,355 million in the first nine months of 2024 compared to $8,700 million in the first nine months of 2023.

Current wording

Interest expense in the first three months of 2025 was $115 million, decreasing $11 million, or 8.7%, from $126 million in the first three months of 2024. The average interest rate was 5.82% in the first three months of 2025 compared to 6.34% in the first three months of 2024. The average debt balance was $7,910 million in the first three months of 2025 compared to $7,945 million in the first three months of 2024.

Previous wording

In the first nine months of 2023, we recorded income tax expense of $22 million on a loss before income taxes of $369 million. Income tax expense for the nine months ended September 30, 2023 was favorably impacted by a net discrete tax benefit of $5 million ($6 million after minority interest).

Current wording

In the first three months of 2024, we recorded income tax expense of $6 million on a loss before income taxes of $52 million. Income tax expense for the three months ended March 31, 2024 was favorably impacted by a net discrete tax benefit of $1 million ($1 million after minority interest).

Previous wording

We record taxes based on overall estimated annual effective tax rates. The difference between our effective tax rate and the U.S. statutory rate of 21% for both the three months ended September 30, 2024 and 2023 primarily relates to losses in foreign jurisdictions in which no tax benefits are recorded and the discrete items noted above.

Current wording

We record taxes based on overall estimated annual effective tax rates. The difference between our effective tax rate and the U.S. statutory rate of 21% for the three months ended March 31, 2025 is favorably impacted by gains recognized as a result of the sale of our OTR tire business in foreign jurisdictions where no taxes are recorded, net of losses in foreign jurisdictions in which no tax benefits are recorded. The difference between our effective tax rate and the U.S. statutory rate of 21% for the three months ended March 31, 2024 primarily relates to losses in foreign jurisdictions in which no tax benefits are recorded and the discrete items noted above.

Previous wording

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. We do not expect the Pillar Two model rules to 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 wording

The Organisation for Economic Co-operation and Development ("OECD") has 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. We do not expect the Pillar Two model rules to materially impact our annual effective tax rate in 2025. However, we are continuing to evaluate the Pillar Two model rules and related legislation and their potential impact on future periods.

Previous wording

At September 30, 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 $29 million and $22 million, respectively, in each period, primarily for state tax loss carryforwards with limited lives. As of September 30, 2024, approximately $1.1 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. 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., 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 September 30, 2024 is primarily a result of gains from other comprehensive income rather than consistently profitable U.S. operating results. Our U.S. operating results for the first nine months of 2024 have shown improvement when compared to the first nine months of 2023.

Current wording

At March 31, 2025 and December 31, 2024, we had approximately $1.3 billion of U.S. federal, state and local net deferred tax assets, inclusive of valuation allowances totaling $36 million and $26 million, respectively, primarily for state tax loss carryforwards with limited lives. As of March 31, 2025 and 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. In the U.S., we have a cumulative loss for the three-year period ended March 31, 2025 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 consider objectively verifiable evidence, including the improvement of our U.S. operating results during the first nine months of 2024 as a result of lower raw material and transportation costs and benefits from the Goodyear Forward plan compared to the first nine months 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. income before income taxes during the first quarter of 2025 as a result of benefits from the Goodyear Forward plan compared to the first quarter of 2024, 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, tariff, 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 for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, as well as forecasts of future profitability, provide us sufficient positive evidence to conclude that it is more likely than not that, at September 30, 2024, 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. income before income taxes for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as well as forecasts of future profitability, provide us sufficient positive evidence to conclude that it is more likely than not that, at March 31, 2025, our U.S. net deferred tax assets will be fully utilized. However, macroeconomic factors such as raw material, transportation, 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 September 30, 2024 and December 31, 2023, we also had approximately $1.6 billion and $1.5 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.3 billion and $1.2 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 $1.1 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 March 31, 2025 and December 31, 2024, 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, including our foreign tax credits, refer to Note to the Consolidated Financial Statements No. 5, Income Taxes.

Current wording

For further information regarding income taxes and the realizability of our deferred tax assets, including our foreign tax credits, refer to Note to the Consolidated Financial Statements No. 6, Income Taxes.

Previous wording

There was no minority shareholders’ net income in the third quarter of 2024, compared to $5 million in the third quarter of 2023.

Current wording

Minority shareholders’ net income in the first three months of 2025 was $3 million, compared to net loss of $1 million in the first three months of 2024.

Previous wording

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-off 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 (credits), asset sales and certain other items.

Current wording

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-off 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 impairment charges, and certain other items.

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. 7, 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 the first nine months of 2024 decreased 4.6 million units, or 7.2%, to 59.6 million units. Replacement tire volume decreased 5.2 million units, or 9.8%, primarily 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 0.6 million units, or 5.2%, primarily in our consumer business in Brazil and the U.S.

Current wording

Americas unit sales in the first quarter of 2025 decreased 0.6 million units, or 3.1%, to 18.4 million units. Replacement tire volume decreased 0.5 million units, or 3.1%, 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 of distribution changes in Latin America. OE tire volume decreased 0.1 million units, or 3.2%, primarily in the U.S.

Previous wording

Net sales in the third quarter of 2024 were $2,858 million, decreasing $262 million, or 8.4%, from $3,120 million in the third quarter of 2023. The decrease in net sales was primarily due to lower tire volume of $264 million, unfavorable foreign currency translation of $46 million, primarily related to the weakening of the Brazilian real and Mexican peso, and unfavorable price and product mix of $35 million. These decreases were partially offset by increased sales in other tire-related businesses of $37 million, primarily due to higher third-party chemical and retail sales, $33 million of sales lost during the third quarter of 2023 due to the Tupelo storm, and a $13 million benefit related to the Goodyear Forward plan.

Current wording

Net sales in the first quarter of 2025 were $2,502 million, decreasing $86 million, or 3.3%, from $2,588 million in the first quarter of 2024. The decrease in net sales was primarily due to lower tire volume of $65 million and the negative impact of changes in foreign exchange rates of $60 million, primarily related to the weakening of the Brazilian real and Mexican peso. These decreases were partially offset by increased sales in other tire-related businesses of $30 million, primarily due to increased chemical sales, and a $13 million benefit related to the Goodyear Forward plan.

Previous wording

Operating income in the first nine months of 2024 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $37 million, net rationalization charges of $14 million, and net gains on asset sales of $1 million. Operating income in the first nine months of 2023 excluded net rationalization charges of $23 million.

Current wording

Operating income in the first quarter of 2025 excluded net rationalization charges of $62 million, asset write-offs, accelerated depreciation and accelerated lease costs of $28 million, and net gains on asset sales of $1 million. Operating income in the first quarter of 2024 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $8 million and net rationalization charges of $5 million.

Previous wording

EMEA unit sales in the third quarter of 2024 decreased 0.3 million units, or 2.9%, to 12.2 million units. Replacement tire volume decreased 0.1 million units, or 2.1%, mainly driven by our consumer business, reflecting lower tire volume in Eastern Europe, particularly Turkey. OE tire volume decreased 0.2 million units, or 5.6%, primarily in our consumer business, driven by lower vehicle production.

Current wording

EMEA unit sales in the first quarter of 2025 decreased 0.2 million units, or 2.0%, to 12.3 million units. Replacement tire volume decreased 0.3 million units, or 3.9%, primarily in our consumer business, reflecting increased competition. OE tire volume increased 0.1 million units, or 3.0%, primarily in our consumer business, reflecting share gains driven by new fitments.

Previous wording

Operating income in the third quarter of 2024 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $7 million, net rationalization charges of $1 million, and net gains on asset sales of $1 million. Operating income in the third quarter of 2023 excluded net rationalization charges of $20 million.

Current wording

Operating income in the first quarter of 2025 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $2 million and net rationalization charges of $1 million. Operating income in the first quarter of 2024 excluded net rationalization charges of $11 million and accelerated depreciation and accelerated lease costs of $7 million.

Previous wording

At September 30, 2024, we had $905 million in cash and cash equivalents, compared to $902 million at December 31, 2023. For the nine months ended September 30, 2024, net cash used for operating activities was $591 million, reflecting cash used for working capital of $1,124 million and rationalization payments of $149 million, as well as the Company's net loss for the period of $12 million, which included non-cash charges for depreciation and amortization of $800 million, an intangible asset impairment of $125 million, net rationalization charges of $52 million, a non-cash gain on asset sales of $95 million, and a gain on insurance recoveries for damaged property, plant and equipment of $61 million. Net cash used for investing activities was $759 million, primarily representing capital expenditures of $912 million and loans to TireHub of $28 million, partially offset by proceeds from asset sales of $126 million, primarily related to the sale of a distribution center in Germany and the sale and leaseback of a warehouse in Americas, and insurance recoveries of $48 million for replacement of equipment damaged in the Debica fire and building damage in the Tupelo storm. Net cash provided by financing activities was $1,315 million, primarily due to net borrowings of $1,366 million.

Current wording

At March 31, 2025, we had $902 million in cash and cash equivalents, compared to $810 million at December 31, 2024. For the three months ended March 31, 2025, net cash used for operating activities was $538 million, reflecting cash used for working capital of $750 million, rationalization payments of $65 million and pension contributions and direct payments of $41 million, partially offset by proceeds from the sale of our OTR tire business of $185 million for deferred amounts related to the trademark license and product supply agreements, as well as the Company's net income for the period of $118 million, which included non-cash charges for depreciation and amortization of $270 million and a non-cash gain on asset sales of $262 million. Net cash provided by investing activities was $432 million, primarily representing proceeds from the sale of our OTR tire business of $720 million, partially offset by capital expenditures of $259 million. Net cash provided by financing activities was $211 million, primarily due to net borrowings of $198 million.

Previous wording

At September 30, 2024, we had $2,508 million of unused availability under our various credit agreements, compared to $4,247 million at December 31, 2023. The table below presents unused availability under our credit facilities at those dates:

Current wording

At March 31, 2025, we had $2,623 million of unused availability under our various credit agreements, compared to $3,555 million at December 31, 2024. The table below presents unused availability under our credit facilities at those dates:

Previous wording

We expect our 2024 full-year cash flow needs to include capital expenditures of approximately $1,200 million, excluding approximately $50 million of capital expenditures covered by insurance. We also expect interest expense to be approximately $525 million; rationalization payments to be approximately $225 million; income tax payments to be approximately $175 million, excluding one-time items; and contributions to our funded pension plans to be $25 million to $35 million. We expect working capital to be a $150 million to $200 million use of operating cash flows.

Current wording

We expect our 2025 full-year 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 operating cash flows of approximately $50 million.

Previous wording

Our ability to service debt and operational requirements is also dependent, in part, on the ability of our subsidiaries to make distributions of cash to various other entities in our consolidated group, whether in the form of dividends, loans or otherwise. In certain countries where we operate, such as China, South Africa, Serbia and Argentina, transfers of funds into or out of such countries by way of dividends, loans, advances or payments to third-party or affiliated suppliers are generally or periodically subject to certain requirements, such as obtaining approval from the foreign government and/or currency exchange board before net assets can be transferred out of the country. In addition, certain of our credit agreements and other debt instruments limit the ability of foreign subsidiaries to make distributions of cash. Thus, we would have to repay and/or amend these credit agreements and other debt instruments in order to use this cash to service our consolidated debt. Because of the inherent uncertainty of satisfactorily meeting these requirements or limitations, we do not consider the net assets of our subsidiaries, including our Chinese, South African, Serbian and Argentinian subsidiaries, which are subject to such requirements or limitations to be integral to our liquidity or our ability to service our debt and operational requirements. At September 30, 2024, approximately $828 million of net assets, including approximately $172 million of cash and cash equivalents, were subject to such requirements. The requirements we must comply with to transfer funds out of China, South Africa, Serbia and Argentina have not adversely impacted our ability to make transfers out of those countries.

Current wording

Our ability to service debt and operational requirements is also dependent, in part, on the ability of our subsidiaries to make distributions of cash to various other entities in our consolidated group, whether in the form of dividends, loans or otherwise. In certain countries where we operate, such as China, South Africa, Serbia and Argentina, transfers of funds into or out of such countries by way of dividends, loans, advances or payments to third-party or affiliated suppliers are generally or periodically subject to certain requirements, such as obtaining approval from the foreign government and/or currency exchange board before net assets can be transferred out of the country. In addition, certain of our credit agreements and other debt instruments limit the ability of foreign subsidiaries to make distributions of cash. Thus, we would have to repay and/or amend these credit agreements and other debt instruments in order to use this cash to service our consolidated debt. Because of the inherent uncertainty of satisfactorily meeting these requirements or limitations, we do not consider the net assets of our subsidiaries, including our Chinese, South African, Serbian and Argentinian subsidiaries, which are subject to such requirements or limitations to be integral to our liquidity or our ability to service our debt and operational requirements. At March 31, 2025, approximately $869 million of net assets, including approximately $182 million of cash and cash equivalents, were subject to such requirements. The requirements we must comply with to transfer funds out of China, South Africa, Serbia and Argentina have not adversely impacted our ability to make transfers out of those countries.

Previous wording

Net cash used for operating activities was $591 million in the first nine months of 2024, compared to net cash used for operating activities of $204 million in the first nine months of 2023. The $387 million increase in net cash used for operating activities was primarily due to an increase in cash used for working capital of $313 million, year-over-year changes in balance sheet accounts for Other Current Liabilities and Other Assets and Liabilities totaling $291 million, $81 million of costs related to the Goodyear Forward plan, and higher rationalization payments of $77 million, partially offset by higher earnings in our SBUs of $348 million.

Current wording

Net cash used for operating activities was $538 million in the first three months of 2025, compared to net cash used for operating activities of $451 million in the first three months of 2024. The $87 million increase in net cash used for operating activities was primarily due to an increase in cash used for working capital of $211 million and lower earnings in our SBUs of $52 million, partially offset by proceeds from the sale of our OTR tire business of $185 million for deferred amounts related to the trademark license and product supply agreements.

Previous wording

The increase in cash used for working capital reflects an increase in cash used for Inventory of $849 million, partially offset by a decrease in cash used for Accounts Payable — Trade of $378 million and Accounts Receivable of $158 million. These changes were driven by lower sales volume in the first nine months 2024 compared to the first nine months of 2023.

Current wording

The increase in cash used for working capital reflects an increase in cash used for Inventory of $198 million and Accounts Receivable of $106 million, partially offset by a decrease in cash used for Accounts Payable — Trade of $93 million. These changes were driven by lower sales volume and timing of accounts receivable collection in the first three months of 2025 compared to the first three months of 2024.

Previous wording

In aggregate, we had total credit arrangements of $11,496 million available at September 30, 2024, of which $2,508 million were unused, compared to $11,743 million available at December 31, 2023, of which $4,247 million were unused. At September 30, 2024, we had long term credit arrangements totaling $10,580 million, of which $2,217 million were unused, compared to $10,983 million and $3,867 million, respectively, at December 31, 2023. At September 30, 2024, we had short term committed and uncommitted credit arrangements totaling $916 million, of which $291 million were unused, compared to $760 million and $380 million, respectively, at December 31, 2023. The continued availability of the short term uncommitted arrangements is at the discretion of the relevant lenders and may be terminated at any time.

Current wording

In aggregate, we had total credit arrangements of $10,537 million available at March 31, 2025, of which $2,623 million were unused, compared to $11,223 million available at December 31, 2024, of which $3,555 million were unused. At March 31, 2025, we had long term credit arrangements totaling $9,842 million, of which $2,382 million were unused, compared to $10,352 million and $3,263 million, respectively, at December 31, 2024. At March 31, 2025, we had short term committed and uncommitted credit arrangements totaling $695 million, of which $241 million were unused, compared to $871 million and $292 million, respectively, at December 31, 2024. The continued availability of the short term uncommitted arrangements is at the discretion of the relevant lenders and may be terminated at any time.