GOODYEAR TIRE & RUBBER CO /OH/

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 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.

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. During the six months ended June 30, 2025, the Goodyear Forward plan provided $395 million in benefits to segment operating income.

Previous wording

On January 7, 2025, we entered into a Purchase Agreement, dated as of January 7, 2025 (the "Dunlop Purchase Agreement"), with Sumitomo Rubber Industries, Ltd. ("SRI") relating to the sale of our rights to 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 from the closing of the transaction until December 31, 2025, 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; 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. On May 7, 2025, we completed the sale of the Dunlop brand and related transactions and received gross cash proceeds of $735 million.

Current wording

On May 7, 2025, we completed the sale of our rights to 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 to Sumitomo Rubber Industries, Ltd. ("SRI") pursuant to the terms of the Purchase Agreement, dated as of January 7, 2025 (as amended, the "Dunlop Purchase Agreement"). SRI also paid 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 also acquired our existing Dunlop tire inventory for approximately $104 million. We also entered 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 from the closing of the transaction until December 31, 2025, and during which we will pay SRI a royalty on such Dunlop sales; (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; 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.

Previous 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.

Current wording

Our results for the second quarter of 2025 include a 5.3% decrease in tire unit shipments compared to 2024 due to lower global tire volume. In the second quarter of 2025, we experienced approximately $55 million of inflationary cost pressures.

Previous wording

Total segment operating income for the first three months of 2025 was $195 million, compared to $247 million in the first three months of 2024. The $52 million decrease was primarily due to higher raw material costs of $181 million, higher SAG of $43 million when excluding Goodyear Forward savings, lower tire volume of $33 million, other cost increases of $30 million, primarily due to a benefit received in 2024 related to a reduction in U.S. duty rates on various commercial tires from China and higher transportation costs in 2025, increased conversion costs of $18 million driven by the effect of lower tire production on fixed cost absorption, and the impact of the sale of the OTR tire business of $12 million. These decreases were partially offset by benefits from the Goodyear Forward plan of $200 million and global improvements in price and product mix of $68 million. Refer to "Results of Operations — Segment Information" for additional information.

Current wording

Total segment operating income for the second quarter of 2025 was $159 million, compared to $334 million in the second quarter of 2024. The $175 million decrease was primarily due to higher raw material costs of $174 million, increased conversion costs of $90 million, driven by the effect of lower tire production on fixed cost absorption and inflation, a net benefit from insurance recoveries in 2024 of $63 million, higher SAG of $54 million when excluding Goodyear Forward savings, lower tire volume of $37 million, and the impact of the sale of the OTR tire business of $23 million. These decreases were partially offset by benefits from the Goodyear Forward plan of $195 million and benefits from price and product mix of $91 million. Refer to "Results of Operations — Segment Information" for additional information.

Previous 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.

Current wording

Net sales in the first six months of 2025 were $8,718 million, compared to $9,107 million in the first six months of 2024. Net sales decreased in 2025 primarily due to lower global tire volume, the impacts of our divestitures, primarily from the sale of the OTR tire business, and the negative impact of changes in foreign exchange rates globally. These decreases were partially offset by favorable price and product mix, higher sales in other tire-related businesses, primarily due to growth in Fleet Solutions in EMEA and higher retread sales in EMEA and Americas, and benefits from the Goodyear Forward plan.

Previous wording

In the first three months of 2025, Goodyear net income was $115 million, or $0.40 per share, compared to Goodyear net loss of $57 million, or $0.20 per share, in the first three months of 2024. The change in Goodyear net income was primarily due to a gain on the sale of the OTR tire business, partially offset by higher rationalization charges, lower segment operating income and higher U.S. and Foreign Tax Expense.

Current wording

In the first six months of 2025, Goodyear net income was $369 million, or $1.28 per share, compared to Goodyear net income of $10 million, or $0.04 per share, in the first six months of 2024. The change in Goodyear net income was primarily due to gains on the sales of the OTR tire business and the Dunlop brand and lower interest expense, partially offset by higher rationalization charges and lower segment operating income.

Previous wording

On February 19, 2025, we redeemed our remaining $500 million 9.5% senior notes due 2025 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest.

Current wording

On June 30, 2025, we redeemed $400 million and, on July 3, 2025, we redeemed the remaining $500 million of our 5% senior notes due 2026 at redemption prices equal to 100% of the principal amount redeemed plus accrued and unpaid interest, using the net proceeds from the 6.625% senior notes due 2030, together with cash and cash equivalents.

Previous 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.

Current wording

At June 30, 2025, we had $785 million of cash and cash equivalents as well as $3,158 million of unused availability under our various credit agreements, compared to $810 million and $3,555 million, respectively, at December 31, 2024. The decrease in cash and cash equivalents of $25 million was primarily due to cash used for operating activities of $718 million, capital expenditures of $466 million and net debt repayments of $112 million, partially offset by cash provided by the sales of the OTR tire business and the Dunlop brand, as well as other asset dispositions, of $1,328 million. Net cash used for operating activities reflects cash used for working capital of $1,069 million, rationalization payments of $204 million, and pension contributions and direct payments of $53 million, partially offset by deferred income related to divestitures of $376 million, as well as the Company's net income for the period of $399 million, which includes non-cash gains on asset sales of $701 million and non-cash charges for depreciation and amortization of $544 million. Refer to "Liquidity and Capital Resources" for additional information.

Previous 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.

Current wording

In the third quarter of 2025, we expect our global tire unit volume to decline approximately 5% compared to the third quarter of 2024 driven by global OE volume reductions and lower consumer replacement volume. We also expect unabsorbed overhead to be approximately $50 million higher in the third quarter of 2025 compared to the third quarter of 2024 due to lower production in the second quarter of 2025.

Previous 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.

Current wording

We expect to continue progress on our Goodyear Forward transformation plan in 2025, with third quarter of 2025 benefits from the program of approximately $180 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 $10 million in the third quarter of 2025.

Previous 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.

Current wording

We expect our raw material costs to increase approximately $50 million in the third quarter of 2025 compared to the third quarter of 2024, driven by natural rubber. These raw material cost increases are expected to be offset by approximately $100 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 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.

Current wording

We expect non-raw material inflation and other costs to be approximately $180 million higher in the third quarter of 2025 compared to the third quarter of 2024. These costs include the impact of inflation, tariffs, increased transportation costs and other manufacturing costs including costs associated with announced rationalization plans. 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 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.

Current wording

For the full year of 2025, we expect working capital to be neither a source nor use of cash. We anticipate our capital expenditures to be approximately $900 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

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.

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 June 30, 2025 is favorably impacted by gains recognized as a result of the sale of the Dunlop brand, which included certain associated intellectual property and other intangible assets, in jurisdictions where no taxes are recorded, net of losses in foreign jurisdictions in which no tax benefits are recorded, and the discrete items noted above. The difference between our effective tax rate and the U.S. statutory rate of 21% for the three months ended June 30, 2024 primarily relates to losses in foreign jurisdictions in which no tax benefits are recorded.

Previous 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%.

Current wording

Worldwide tire unit sales in the first six months of 2025 were 76.4 million units, decreasing 4.1 million units, or 5.0%, from 80.5 million units in the first six months of 2024. Replacement tire volume decreased globally by 3.6 million units, or 6.2%. OE tire volume decreased by 0.5 million units, or 2.3%, driven by Asia Pacific.

Previous 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.

Current wording

CGS in the first six months of 2025 and 2024 included pension expense of $6 million and $7 million, respectively. CGS in the first six months of 2025 included $8 million of incremental savings from rationalization plans. CGS was 82.8% of sales in the first six months of 2025, compared to 80.7% in the first six months of 2024.

Previous 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.

Current wording

SAG in the first six months of 2025 was $1,342 million, decreasing $85 million, or 6.0%, from $1,427 million in the first six months of 2024. SAG decreased primarily due to savings related to the Goodyear Forward plan of $67 million and benefits related to divestitures, primarily the sale of the OTR tire business, of $30 million. These decreases were partially offset by an increase in other costs of $81 million, primarily related to inflation and non-recurring insurance. SAG in the first six months of 2025 also included costs related to the Goodyear Forward plan of $5 million ($4 million after-tax and minority) compared to $67 million ($51 million after-tax and minority) in the first six months of 2024, primarily related to third-party advisory, legal and consulting fees and costs associated with planned asset sales.

Previous 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.

Current wording

We recorded net rationalization charges of $140 million ($119 million after-tax and minority) in the first six months of 2025 and $41 million ($31 million after-tax and minority) in the first six months of 2024. Net rationalization charges in the first six months of 2025 primarily related to the proposed plan to close our manufacturing facility in Kariega, South Africa in EMEA, the elimination of commercial tire production at Danville, the closures of Fulda and Fürstenwalde, and the plan to reduce SAG headcount in Americas and Corporate. Net rationalization charges in the first six months of 2024 primarily related to the closure of our tire manufacturing facility in Malaysia, the plan to open a new shared services center in Costa Rica, and the closures of Fulda, Fürstenwalde and Melksham, partially offset by reversals related to our rationalization and workforce reorganization plan in EMEA due to voluntary attrition. For further information, refer to Note to the Consolidated Financial Statements No. 4, Costs Associated with Rationalization Programs.

Previous wording

CGS and SAG in the first three months of 2025 included $46 million ($39 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily related to the closures of our Fulda and Fürstenwalde, Germany tire manufacturing facilities and the elimination of commercial tire production at Danville. CGS and SAG in the first three months of 2024 included $51 million ($42 million after-tax and minority) of asset write offs, accelerated depreciation and accelerated lease charges related to the closure of a development center in the U.S. and announced plant and facility closures in Americas and EMEA.

Current wording

CGS and SAG in the first six months of 2025 included $87 million ($77 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily related to the closures of Fulda and Fürstenwalde and the elimination of commercial tire production at Danville. CGS and SAG in the first six months of 2024 included $94 million ($76 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.

Previous 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.

Current wording

Interest expense in the first six months of 2025 was $227 million, decreasing $29 million, or 11.3%, from $256 million in the first six months of 2024. The average interest rate was 5.73% in the first six months of 2025 compared to 6.28% in the first six months of 2024. The average debt balance was $7,923 million in the first six months of 2025 compared to $8,158 million in the first six months of 2024.

Previous wording

Other Expense in the first three months of 2025 was $25 million compared to $28 million in the first three months of 2024. The decrease in Other Expense was primarily due to a pension settlement charge of $4 million ($3 million after-tax and minority) in the first three months of 2025 compared to a pension settlement credit of $5 million ($4 million after-tax and minority) in the first three months of 2024 and net foreign currency exchange gains of $4 million in the first three months of 2025 compared to net foreign currency exchange losses of $1 million in the first three months of 2024. The first three months of 2025 include transaction and other costs of $5 million ($3 million after-tax and minority) related to the sale of the Dunlop brand. The first three months of 2024 included an $8 million ($5 million after-tax and minority) loss related to the sale of receivables in Argentina and a favorable $2 million ($1 million after-tax and minority) tax item in Brazil.

Current wording

Other (Income) Expense in the first six months of 2025 was $56 million of expense, compared to $59 million of expense in the first six months of 2024. The change in Other (Income) Expense was primarily due to a pension settlement charge of $4 million ($3 million after-tax and minority) in the first six months of 2025 compared to a pension settlement credit of $5 million ($4 million after-tax and minority) in the first six months of 2024, a decrease in interest income of $9 million, and an increase in net foreign currency exchange losses of $2 million, partially offset by an increase in royalty and other income of $15 million. The first six months of 2025 include transaction costs of $6 million ($4 million after-tax and minority), primarily related to the anticipated sale of the Chemical Business. The first six months of 2024 included an $8 million ($6 million after-tax and minority) loss related to the sale of receivables in Argentina and a favorable $2 million ($1 million after-tax and minority) tax item in Brazil.

Previous 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).

Current wording

In the first six months of 2024, we recorded income tax expense of $66 million on income before income taxes of $69 million. Income tax expense for the six months ended June 30, 2024 includes a net discrete tax benefit of $1 million ($1 million after minority interest).

Previous 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.

Current wording

At June 30, 2025 and December 31, 2024, we had approximately $1.4 billion and $1.3 billion, respectively, 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 June 30, 2025, approximately $1.2 billion of these U.S. net deferred tax assets had unlimited lives and approximately $200 million had limited lives, and the majority do not start to expire until 2030. 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. In the U.S., we have a cumulative loss for the three-year period ended June 30, 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 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.

Current wording

In assessing our ability to utilize our net deferred tax assets, we primarily considered objectively verifiable information, including the reduction in interest expense from debt repayment as a result of the sales of the OTR tire business and the Dunlop brand, which included certain associated intellectual property and other intangible assets, 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, repaying U.S. third-party debt and 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. 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.

Current wording

We believe our forecasts of future profitability, including a reduction in interest expense from debt repayment as a result of the sales of the OTR tire business and the Dunlop brand, which included certain associated intellectual property and other intangible assets, provide us sufficient positive evidence to conclude that it is more likely than not that, at June 30, 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. Our U.S. operating results for the quarter ended June 30, 2025 declined relative to prior periods. If our U.S. operating results continue to 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 and any tax law changes to assess the realizability of our U.S. deferred tax assets.

Previous 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.

Current wording

At June 30, 2025 and December 31, 2024, we also had approximately $1.5 billion of foreign net deferred tax assets and related valuation allowances of approximately $1.3 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 $1.0 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

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.

Current wording

Minority shareholders’ net income in the first six months of 2025 was $30 million, primarily related to the sale of property in Asia Pacific, compared to a net loss of $7 million in the first six months of 2024.

Previous 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.

Current wording

Operating income in the second quarter of 2025 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $14 million and net rationalization charges of $10 million. Operating income in the second quarter of 2024 excluded net gains on asset sales of $14 million, net rationalization charges of $11 million, and asset write-offs, accelerated depreciation and accelerated lease costs of $2 million.

Previous 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.

Current wording

Americas unit sales in the first six months of 2025 decreased 1.1 million units, or 2.9%, to 37.5 million units. Replacement tire volume decreased 0.8 million units, or 2.5%, primarily due to a decrease in our consumer business, driven by increased competitiveness in the U.S. from the lower tier market. OE tire volume decreased 0.3 million units, or 4.2%, primarily due to weakness in the OE industry in North America.

Previous wording

Operating income in the first quarter of 2025 was $155 million, decreasing $24 million, or 13.4%, from $179 million in the first quarter of 2024. The decrease in operating income was due to higher raw material costs of $106 million, higher SAG of $19 million, lower tire volume of $15 million, a $14 million benefit received in 2024 related to a reduction in U.S. duty rates on various commercial tires from China, higher conversion costs of $8 million, driven by the effect of lower tire production on fixed cost absorption and inflation, and unfavorable foreign currency translation of $7 million, primarily related to the weakening of the Brazilian real and Mexican peso. These decreases were partially offset by a $138 million benefit related to the Goodyear Forward plan and favorable price and product mix of $8 million. Operating income for 2025 includes incremental savings from rationalization plans of $8 million.

Current wording

Operating income in the first six months of 2025 was $296 million, decreasing $124 million, or 29.5%, from $420 million in the first six months of 2024. The decrease in operating income was due to higher raw material costs of $214 million, higher conversion costs of $90 million, driven by the effect of lower tire production on fixed cost absorption and inflation, higher SAG of $64 million, higher transportation and imported tire costs of $37 million, lower tire volume of $28 million, a $20 million benefit received in 2024 related to insurance proceeds for property damage and business interruptions resulting from storm damage events in prior years, a $14 million benefit received in 2024 related to a reduction in U.S. duty rates on various commercial tires from China, and the negative impact of changes in foreign exchange rates of $12 million, primarily related to the weakening of the Brazilian real and Mexican peso. These decreases were partially offset by a $287 million benefit related to the Goodyear Forward plan, favorable price and product mix of $51 million, and increased earnings in other tire-related businesses of $18 million, primarily due to higher retail earnings. Operating income for 2025 includes incremental savings from rationalization plans of $15 million.

Previous 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.

Current wording

Operating income in the first six months of 2025 excluded net rationalization charges of $72 million, asset write-offs, accelerated depreciation and accelerated lease costs of $42 million, and net gains on asset sales of $1 million. Operating income in the first six months of 2024 excluded net rationalization charges of $15 million, net gains on asset sales of $14 million, and asset write-offs, accelerated depreciation and accelerated lease costs of $10 million.

Previous 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.

Current wording

EMEA unit sales in the second quarter of 2025 decreased 0.3 million units, or 2.0%, to 11.3 million units. Replacement tire volume decreased 0.6 million units, or 7.3%, mainly driven by our consumer business, reflecting market softness and increased competition from the lower tier market. OE tire volume increased 0.3 million units, or 10.9%, primarily in our consumer business, reflecting share gains driven by new fitments.

Previous wording

Operating income in the first quarter of 2025 excluded accelerated depreciation of $16 million, net rationalization charges of $12 million and a $1 million gain on asset sales. Operating income in the first quarter of 2024 excluded accelerated depreciation of $16 million, net rationalization charges of $6 million and a $2 million loss on asset sales.

Current wording

Operating loss in the second quarter of 2025 excluded net rationalization charges of $43 million, asset write-offs, accelerated depreciation and accelerated lease costs of $26 million and a $1 million net loss on asset sales. Operating income in the second quarter of 2024 excluded an $82 million net gain on asset sales, asset write-offs, accelerated depreciation and accelerated lease costs of $17 million, and net rationalization charges of $3 million.

Previous wording

Asia Pacific unit sales in the first quarter of 2025 decreased 1.1 million units, or 12.4%, to 7.8 million units. Replacement tire volume decreased 1.0 million units, or 21.3%, driven by actions taken to reduce lower margin business and softness in consumer replacement. OE tire volume decreased 0.1 million units, or 2.4%, primarily in China.

Current wording

Asia Pacific unit sales in the first six months of 2025 decreased 2.5 million units, or 14.0%, to 15.3 million units. Replacement tire volume decreased 1.9 million units, or 19.8%, driven by actions taken to reduce lower margin business and softness in consumer replacement. OE tire volume decreased 0.6 million units, or 7.9%, primarily in China.

Previous 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.

Current wording

At June 30, 2025, we had $785 million in cash and cash equivalents, compared to $810 million at December 31, 2024. For the six months ended June 30, 2025, net cash used for operating activities was $718 million, reflecting cash used for working capital of $1,069 million, rationalization payments of $204 million and pension contributions and direct payments of $53 million, partially offset by deferred income related to divestitures of $376 million, as well as the Company's net income for the period of $399 million, which included non-cash charges for depreciation and amortization of $544 million and a non-cash gain on asset sales of $701 million. Net cash provided by investing activities was $837 million, primarily representing proceeds from the sales of the OTR tire business and the Dunlop brand, as well as other asset dispositions, of $1,328 million, partially offset by capital expenditures of $466 million. Net cash used for financing activities was $107 million, primarily due to net debt repayments of $112 million.

Previous 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:

Current wording

At June 30, 2025, we had $3,158 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 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.

Current wording

We expect our 2025 full-year cash flow needs to include capital expenditures of approximately $900 million. We also expect interest expense to be approximately $450 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 neither a source nor use of cash in 2025.

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 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.

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 June 30, 2025, approximately $888 million of net assets, including approximately $173 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 $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.

Current wording

Net cash used for operating activities was $718 million in the first six months of 2025, compared to net cash used for operating activities of $518 million in the first six months of 2024. The $200 million increase in net cash used for operating activities was primarily due to an increase in cash used for working capital of $300 million, lower earnings in our SBUs of $220 million and increased rationalization payments of $99 million, partially offset by deferred income related to divestitures of $376 million.

Previous 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.

Current wording

The increase in cash used for working capital reflects an increase in cash used for Accounts Receivable of $144 million, Inventory of $115 million and Accounts Payable — Trade of $41 million. These changes were driven by lower sales volume and the timing of accounts receivable collections in the first six months of 2025 compared to the first six months of 2024.